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The 1% has so much money they literally don't know what to do with it

Fri, 06/07/2019 - 5:49pm

  • The top 1% of earners are holding record amounts of money: $303.9 billion to be exact.
  • Despite growing income inequality, the richest households collectively have more than ever before.
  • The top 1% had only $15 billion just before the financial crisis, a fraction of what they hold a decade later.
  • Large companies are overwhelmingly and uniformly choosing not to reinvest much of it into their businesses; instead, they're hoarding it in cash and buying back stock.
  • Visit Business Insider's homepage for more stories.

A truly bizarre trend is having an impact on the economy — wealthy people and corporations have so much money they literally don't know what to do with it.

Why it matters: At a time when growing income inequality is fueling voter discontent and underpinning an array of social movements, the top 1% of earners and big companies are holding record levels of unused cash.

The big picture: US companies raked in a record $2.3 trillion in corporate profits last year, while the country's total wealth increased by $6 trillion to $98.2 trillion (40% of which went to those with wealth over $100,000).

So, where is all the money going? The IMF notes large companies around the world are overwhelmingly and uniformly choosing not to reinvest much of it into their businesses. They're hoarding it in cash and buying back stock.

"There are only 2 things that money can do — sit on a balance sheet unused, where it's just earned income earning an interest rate of zero," ICI chief economist Sean Collins points out. "Or it makes sense to release it to share buybacks or dividends."

  • Companies could pay their workers more, but "that would be terrible for the stock market," says Neil Shearing, chief economist at Capital Economics — half-jokingly.
  • Companies made a record $1.1 trillion in stock buybacks in 2018 and are on track to surpass that number this year. But they still have record cash holdings of close to $3 trillion.

Wealthy households and individuals are pouring money into asset managers, betting on companies that lose $1 billion a year, bonds from little-known Middle Eastern republics, and giving hot Silicon Valley start-ups more venture capital than they can handle.

But even that hasn't been enough to account for all the new money. The top 1% of US households are holding a record $303.9 billion of cash, a quantum leap from the under $15 billion they held just before the financial crisis.

How we got here:

  • The Fed's quantitative easing program pushed the cost of borrowing money to next to nothing for nearly a decade, allowing companies to splurge on debt for mergers and acquisitions and to boost revenue.
  • At the same time, globalization allowed them to reduce labor costs, meaning that gains effectively were returned as profit and used by public companies to boost stock prices.

Between the lines: These factors, combined with legislative policies that have consistently favored business owners over workers, eroded unions and reduced employees ability to demand higher wages.

  • The Tax Cut and Jobs Act  i.e., the Trump tax cut exacerbated these issues, slashing the share of US taxes that companies paid to its lowest level in at least half a century and provided companies even more capital for buybacks, dividends and executive compensation.
  • "Perhaps the fallacy of the tax plan to begin with was companies were not starved for capital coming into this," Mark Hackett, chief of investment research at Nationwide, tells Axios. "They were starved for growth opportunities."

The end result is money that would previously have been split between businesses, workers and the government for projects like schools, health care and infrastructure is instead sitting in corporate accounts earning little to no return.

Go deeper: How depreciating money could save the global economy

SEE ALSO: 20% of New York drivers for apps like Uber have had to rely on food stamps

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Uber shares slip after the company's operating and marketing chiefs step down (UBER)

Fri, 06/07/2019 - 5:12pm

  • Uber shares slipped late Friday after the company confirmed two executives were leaving. 
  • The company's chief marketing and operating executives are stepping down, CEO Dara Khosrowshahi told employees in an email.
  • Watch Uber trade live.

Uber shares slid by as much as 1.4% late Friday after the company confirmed two executives were leaving the company.

Barney Harford, Uber's chief operating officer, and Rebecca Messina, the chief marketing officer, are both stepping down, CEO Dara Khosrowshahi told employees in an email Friday.

Two longtime Uber executives are being promoted to fill the roles. Andrew Macdonald will lead operations, and Jill Hazelbaker, who currently runs policy and communications, will also lead the marketing department, according to a company filing. Khosrowshahi said the shakeup allows him to have a more direct hand in daily operations.

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In a filing with the Securities and Exchange Commission Uber also said Jason Droege, the head of Uber Eats, would begin reporting directly to Khosrowshahi. Macdonald will report to the CEO as well. Both will serve as co-managers of its Core Platform business segment.

The two departures come about one month after Uber's brutal initial public offering that saw the largest first-day dollar loss in a US-listed IPO on record. Shares have fallen by nearly 2% since pricing at $45. The stock closed out the Friday session at $44.16.

You can read the email Uber CEO Dara Khosrowshahi sent to emails detailing the moves here.

Graham Rapier contributed to this report.

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2 of Uber's top executives have left the company (UBER)

Fri, 06/07/2019 - 5:02pm

Uber's chief marketing and operations executives are out, the company confirmed on Friday. 

Barney Harford, Uber's chief operating officer since January 2018, and Rebecca Messina, chief marketing officer since October 2018, are both leaving. Bloomberg News first reported the departures.

CEO Dara Khosrowshahi announced their departures in an email to Uber staff Friday afternoon, a copy of which was provided to Business Insider by the company. He said the shakeup allows him to have a more direct hand in daily operations. 

"Barney and I have agreed that the COO role no longer makes sense, and he's decided to leave Uber," Khosrowshahi said. Barney is a talented businessperson, and I can't thank him enough for all of his contributions in helping get us to and through the IPO."

Read more: Goldman Sachs says Uber's business model is one of its biggest risks

In a regulatory filing with the Securities and Exchange Commission, the company said Harford would stay on until July to help with the transition. 

In 2018, Harford came under fire for his comments about an advertisement that features a mixed-race couple. The New York Times reported in July of that year that Harford voiced concern about "how common" the pairing was in markets where the ad was set to air. He also confused two of the black women in the ad because of similar hairstyles, the paper reported.

Harford later apologized for those comments, saying in a memo obtained by Business Insider that he was "embarrassed" about the insensitive comments. 

Thank you @dkhos for the opportunity over the last couple of years, and thank you to the broader team @Uber for being such an incredible & inspirational team to work with. It has been an honor. pic.twitter.com/tYkhyt8Eye

— Barney Harford (@barneyh) June 7, 2019

Messina is leaving the company without any major scandals. In an interview with Business Insider in September 2018, the Coca-Cola veteran said she was looking forward to assisting Uber in distancing itself from a scandal-ridden past.

I certainly think that we're on the brink of becoming one of the greatest icons in the 21st century," she said at the time. 

Here's the full text of Khosrowshahi's email, as provided by Uber: 

Over the years, I've learned that at every critical milestone, it's important to step back and think about how best to organize for the future. Given that we're a month past the IPO, now is one of those times, and I've been discussing this topic a lot with Barney and the leadership team.

We've made so much progress over the last two years, and Uber is in a far better spot both internally and externally. I now have the ability to be even more involved in the day-to-day operations of our biggest businesses, the core platform of Rides and Eats, and have decided they should report directly to me. This will allow me to be more hands on and help our leaders problem-solve in real time, while also ensuring that we make our platform vision a reality.

Given this, Barney and I have agreed that the COO role no longer makes sense, and he's decided to leave Uber. Barney is a talented businessperson, and I can't thank him enough for all of his contributions in helping get us to and through the IPO. Under his leadership, we've increased our focus on engagement with the launch of our rider and driver loyalty programs; improved the customer experience by eliminating tens of millions of defects through ContactLess100; and strengthened the critical partnership between our product/tech and business teams. On a personal level, I've appreciated his strategic mind, analytical chops, and unflagging passion and efforts for our mission. Barney will be around until July 1 to help me with the transition.

With this change to the COO role, I have decided to make a few additional changes:

Mac, one of our most tenured and talented leaders, will take on the Global Rides business, reporting to me. Reporting to Mac will be Pierre, Troy (CommOps), Gus (Safety & Insurance), Ronnie (U4B) and Mike (Product Ops). Pierre will now head up International Rides, adding LatAm to his scope in addition to EMEA and APAC, with George Gordon reporting to him. Sarfraz Maredia—who will take on US & Canada Rides—will continue reporting to Mac, and Brooks Entwistle will take on interim leadership of the Rides Business Development team under Mac.

Jason and the Eats team will now also report directly to me. And Zhenya Lindgardt, who recently joined Uber from Boston Consulting Group, will report to me and take on a new Platform Strategy & Customer Engagement role, focused on making sure we optimize our platform to realize its full growth potential and drive customer engagement across all our products.

Finally, it's increasingly clear that it's crucial for us to have a consistent, unified narrative to consumers, partners, the press, and policymakers. So I've decided to combine our Marketing, Communications, and Policy teams into one, led by Jill. Given this, Rebecca and I have agreed it makes sense for her to move on. In Rebecca's time here, she stood up our first global marketing organization and helped showcase the best aspects of our brand during our IPO. I'm so grateful for her energy and enthusiasm over the past 9 months, and I wish her all the best.

Given that Marketing is so important to our business, and our brand continues to be challenged, I have also decided to unify all marketers across Performance, Product, Rides, Eats, Safety, ATG, Freight, Nemo, and Employer Brand globally under Jill. Since joining Uber nearly four years ago, Jill has been instrumental in addressing some of our toughest challenges as a company. She's an excellent team builder and always committed to doing what's best for Uber. In order for Jill to dedicate more of her time to Marketing, she has asked two proven leaders to step up: Matt will lead Global Communications and Justin will lead Global Policy, both reporting to Jill.

There's never really a right time to announce departures or changes like this, but with the IPO behind us, I felt this was a good moment to simplify our org and set us up for the future.

As always, I'll be at the All Hands on Tuesday (from our DC office) to answer your questions. Until then, I ask that you support the leaders who have stepped up for the company, and keep your foot on the gas!

Uber on,

Dara

SEE ALSO: A Florida family says an Uber driver violated company policy and drove their daughter to a parking garage where she jumped to her death

Join the conversation about this story »

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Stocks just posted their best week of 2019 after the bleak jobs report fueled hopes for a Fed rate cut

Fri, 06/07/2019 - 4:21pm

What trade war?

Stocks in the US jumped Friday, shrugging off concerns about an economic slowdown and placing major indices on track for their best week of the year. Investors interpreted a weaker-than-expected employment report as a sign the Federal Reserve would consider slashing its benchmark interest rate — a move that would at once signal the economy's historic expansion is losing steam but also benefit corporations by lowering their borrowing costs. 

The S&P 500 and Dow Jones Industrial Average each rose by 1%, and the Nasdaq Composite rose by 1.7% on Friday. The S&P, up 4.4% this week, and the Dow, up 4.7%, were tracking for their best weeks since November. Meanwhile the Nasdaq finished up 3.9% for its best week since December. 

Read more: US economy adds far fewer jobs than expected in May

"The market reaction to the weak US employment report for May suggests that investors are putting a lot of faith in the Fed and its ability to keep the economy strong," Andrew Hunter, a senior US economist at Capital Economics, told investors in a Friday memo.

To be fair, the market came off a pretty dismal month, so investors also swooped in to buy the proverbial dip. May was the market's first month of losses since December as President Donald Trump's trade disputes with key international trading partners knocked global equity prices around.

Some market participants doubt that US stocks can keep rallying on the prospect of a rate cut alone. They include Capital Economics' Hunter, who said investors are discounting signs that economic growth is slowing.

"We think that their hopes are misplaced, which is the key reason we expect the S&P 500 to fall sharply before the year is out," he said in a note on Friday.

The Trump administration's trade disputes with Mexico and China, the biggest trade partners to the US, remain a huge wildcard for investors of all stripes. And it's the very reason Federal Reserve Chairman Jerome Powell signaled earlier this week that an interest rate was not off the table for the central bank — a revelation that boosted stocks.

Read more: Fed's Powell signals he's open to a rate cut as Trump's trade wars escalate

Billionaire investor Stanley Druckenmiller, the founder of Duquesne Capital, suggested Friday in an interview on CNBC prior to the employment report's release that the Federal Reserve would factor a weak headline jobs number into its near-term outlook.

"I don't use the job numbers to predict the economy," he said. "It's just unbelievable the obsession with a lagging indicator. I use them for entry and exit points to fade. But I think if the job number is weak given everything else they're saying, the Fed will be on a clearer easing path by July."

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A Florida family says an Uber driver violated company policy and drove their daughter to a parking garage where she jumped to her death (UBER)

Fri, 06/07/2019 - 3:53pm

  • A family in Florida says their daughter used the Uber app to take a ride to a parking garage in Orlando where she jumped to her death.
  • Uber prohibits unaccompanied minors, but drivers say kids under 18 are a massive problem on the platform.
  • Many Uber drivers have told Business Insider that minors are a major problem on the platform, and that some drivers will take the rides even though they're against company policy.
  • The National Suicide Prevention Lifeline (1-800-273-8255) provides 24/7, free, confidential support for people in distress, as well as best practices for professionals and resources to aid in prevention and crisis situations.
  • Visit Business Insider's homepage for more stories

Uber expressly prohibits drivers from picking up unaccompanied minors.

If a Florida driver had followed those rules in January a 12-year-old girl would still be alive, her family says.

The Orlando Sentinel reported Thursday that the family of Benita "BB" Diamond is blaming Uber for their daughter's death earlier this year. They say the girl used her mother's phone to download the ride-hailing app, in which she used a prepaid gift card to request a ride 20 miles to downtown Orlando around 7 a.m. one morning.

After climbing to the top of the City Commons Parking Garage, she jumped to her death, her family says.

"I have her ashes in my necklace pendant here and that's all I have left of her unfortunately," the girl's mother, Lisha Chen, said at a press conference on Thursday. Video of the statement was published by the local news channel WESH.

An Uber spokesperson told Business Insider that the company was not aware of the issue until this week, despite the incident occurring six months ago, but is investigating in order to take appropriate action.

"If Uber had followed their policy, that would have been the one red flag that we would have caught," her father said at the press conference.

Unaccompanied minors, while prohibited from using the app, are a massive problem on Uber's platform, many drivers have told Business Insider. The company says that if a driver reports an underaged rider, the company will investigate the account holder and possibly ban them from the app.

"I'm increasingly getting pinged by parents to pick up their high school and junior high kids, which is against the rules," Jamie, a driver in Phoenix who asked that his last name not be published for privacy reasons, told Business Insider. "Most people do not know that you have to be 18 to ride in an Uber alone. When I turn the student down and tell them I can't take them, they just keep trying until they find a driver who does not care."

Benita's family has hired a law firm and is considering legal action against Uber.

"If she'd been asked, where's your mom and dad? We believe she would've been here," attorney Laura Douglas said at the press conference.

If you or someone you know is struggling with depression or has had thoughts of harming themselves or taking their own life, get help. The National Suicide Prevention Lifeline (1-800-273-8255) provides 24/7, free, confidential support for people in distress, as well as best practices for professionals and resources to aid in prevention and crisis situations.

SEE ALSO: Uber and Lyft drivers reveal the most annoying things that passengers do during rides

Join the conversation about this story »

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I paid off $68,000 of student loan debt, and 2 easy side hustles made all the difference

Fri, 06/07/2019 - 3:51pm

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, but our reporting and recommendations are always independent and objective.

  • Melanie Lockert graduated from school with $68,000 of student loan debt remaining.
  • She cut her spending as much as she could, but realized she needed to earn more if she was going to make a dent in her debt.
  • She found side jobs working as a brand ambassador and as an event assistant to supplement her income, and found they were well-paying gigs that weren't very hard.
  • Credible can help compare offers to consolidate and refinance your student loan debt »

In 2012, I was living in Portland, Oregon, wondering how I was going to pay my remaining $68,000 in student loan debt.

I had graduated with my MA in Performance Studies from NYU the year prior but struggled to find full-time work. I was making $10 to $12 with temp work. I shared a studio with my boyfriend at the time, didn't have a car, and didn't have health insurance (pre-Affordable Care Act).

I cut back in every way I could and hit my limit. I knew that my only shot at paying off my debt was earning more. So I focused on side hustling.

While I did a lot of side hustles over the years, I did two main side hustles that helped me pay off debt.

Becoming a brand ambassador

Right before I left New York City at the end of 2011, I got my first gig as a brand ambassador. I found it on Craigslist under the Gigs section. There was an ad that said there was an opportunity to earn $20 per hour to hand out flyers for a pet adoption event for a major pet retailer in Central Park. They paid within two weeks. I was lucky to get the gig after playing up the volunteer experience I had with events.

I got it, showed up, and made some of the easiest money of my life. I got paid $20 per hour to hang out in Central Park and hand out flyers about a pet adoption event. After that, I got a gig as a Columbia Sportswear brand ambassador during the holiday season in Bryant Park. I got $500 worth of free clothes and helped people try on jackets and sing karaoke in a freezer, as a way to prove how warm the clothes were. This was another easy and fun gig. So when I moved to Portland, I continued my search for brand ambassador gigs.

Being a brand ambassador meant being "the face" of the company in public. Typically, as a brand ambassador you work public events like sporting events, concerts, or in public places with lots of people, like parks.

Credible can help compare offers to consolidate and refinance your debt »

I realized that brand ambassador gigs varied between $17-25 per hour, depending on the gig. Many of the gigs were between four and eight hours, for one to two days.

All I needed was the ability to talk to people, show up on time, and wear a branded t-shirt. Being a brand ambassador was great because I simply signed up with marketing agencies, got emails for gigs, and applied for the ones I could do.

There was a flexible schedule that could work around my 9 to 5 and paid more than what I was earning during the day.

Working as an event assistant

After working for a couple of years as a brand ambassador, in 2014 I found a TaskRabbit gig to help out at an event at a Jewish Congregation. I am not Jewish, which worked in my favor as there were no conflicts for me to work the holidays. I did the first gig, helping prepare and set food, move chairs, clean up, etc.

They liked me and offered me a part-time job. This was also nights and weekends and a job I could do around my 9 to 5. I would work one to three times per month for about five hours at a time.

As an events assistant, I helped with set up, food prep, cleaning, and breakdown. Not exactly glamourous stuff, but this job helped me experience a new culture and new traditions.

It only paid $12 per hour but every event, I got a feast of leftover food and wine. The extras would easily last me a week, which would help my grocery budget.

I kept my side hustles for years

I continued these side hustles until I paid off my debt in December 2015. It took me nearly five years to pay off the rest of the $68,000, and while it was stressful working full-time and spending nights and weekends doing these side hustles, for an extrovert like me, it also gave me energy.

In the beginning, I made $10 to $12 per hour and these side hustles helped me survive and continue to pay off debt. In mid-2013, I got a job as an events and communications coordinator at a nonprofit making $31,000. Having that job as well as these two side hustles helped me pay off debt faster. During that time, I kept my expenses the same and focused solely on earning more.

I found that frugality was a great beginning strategy in my debt payoff journey, but earning more really helped me get where I needed to go.

Need help with your student loan debt? Credible can help compare offers to consolidate and refinance your debt »

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'Dark Phoenix' had a weak start at the box office and could have the worst US opening of any X-Men movie

Fri, 06/07/2019 - 2:34pm

  • "Dark Phoenix" took in $5 million at its Thursday night previews.
  • The movie is projected to earn between $45 million and $55 million its opening weekend.
  • It's possible the movie could be the first X-Men title to not have a $50 million domestic opening.
  • The movie has stiff competition with it going up against "Secret Life of Pets 2," which is projected to have a $60 million opening.
  • Visit Business Insider's homepage for more stories.

 

"Dark Phoenix," the latest X-Men movie and the final installment before Disney takes over the franchise after acquiring Fox, is off to a rough start.

The movie took in $5 million in its Thursday previews, which puts it in the range of a projected $45-million-to-$55-million total for the weekend. That would be one of the lowest openings for the franchise, maybe even marking the first "X-Men" movie to open under $50 million. The worst to date was 2013's "The Wolverine" with a $53.1 million domestic opening.

"Dark Phoenix" also has some stiff competition in the form of Universal's "The Secret Life of Pets 2." The movie had a preview total of $2.3 million, but business will certainly pick up for the movie over the weekend as most kids go to see it.

Read more: "Dark Phoenix" is the worst-reviewed "X-Men" movie of all time, but the international box office could save it

The weekend will be a close race for first place, and "Pets" may have the upper hand as its studio is releasing it on over 4,500 screens (with a projected $60 million opening) compared to the 3,700 for "Dark Phoenix." That doesn't even include the fact that movies like "Aladdin" and "Godzilla: King of the Monsters" are still in theaters. And it also doesn't help that "Phoenix" is sporting the lowest Rotten Tomatoes score ever for an X-Men movie with 22% currently

One thing is certain: "Dark Phoenix" will not have the box-office success of the last entry, "X-Men Apocalypse." The movie had a $65.7 million opening and went on to earn over $543 million worldwide, helped greatly by a $388-million-plus international box-office gross (despite it having a "rotten" Rotten Tomatoes score of 47%).

And "Dark Phoenix" may not have as strong an international kick-off as previous movies in the franchise either. Early reports have the movie opening lower internationally than the $100 million earned by "Apocalypse" its opening weekend.

SEE ALSO: Why the latest X-Men movie, "Dark Phoenix," was doomed from the start

Join the conversation about this story »

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How to use Zelle, the lightning-fast payments app that's beloved by both users and banks

Fri, 06/07/2019 - 2:03pm

  • Payments app Zelle processes more payments than apps like Venmo
  • Several of the largest banks banded together to launch Zelle two years ago. It's different from other payment apps because you don't have to wait to receive the money in your bank account. 
  • Banks say they are benefiting from Zelle alongside consumers — Bank of America's CEO said at a recent conference that the service is saving the bank money it would have spent processing paper checks. 
  • Here's what Zelle's all about, and how to use it.  
  • Visit Business Insider's homepage for more stories.

The payments app Zelle quickly became popular among users. These days, the banks are loving it, too.  

Zelle is a service that lets you digitally transfer money to someone else — no cash, checks, or wire transfers required. The service launched two year ago when JPMorgan, Bank of America, Wells Fargo, US Bancorp, Capital One, BB&T, and PNC joined together to launch Zelle.

Zelle is similar to the super-popular payments app Venmo. Both Venmo and Zelle let you send money to friends instantly, but there are some key differences between the two services: Money sent through Venmo can be transferred instantly with Venmo's "instant transfer" feature, but Venmo charges a fee of 1% of the transfer amount if you go that route. Money sent through Zelle is transferred to your bank account automatically, free of charge.

This feature may have contributed to why Zelle has become so popular. According to eMarketer data, after only a year on the market, Zelle was poised to overtake Venmo as the most-used peer-to-peer payment app in the US. In the first quarter of 2019, Zelle processed $39 billion in payments, whereas Venmo processed $21 billion in payments during the same quarter. 

And now, banks are starting to reap the rewards of Zelle and technologies like it. Bank of America CEO Brian Moynihan, for example, said at a recent conference that Zelle handled $44 billion in Bank of America customer transactions last year, which reduced the number of paper checks — saving the company the money it normally spends on processing those checks. 

So what makes Zelle different from other payment apps, and how do you use it? Here's everything you need to know. 

This is an update to a story originally published in 2018.

SEE ALSO: What it's like to use Wyze Cam, the $20 home security camera trying to take on Amazon and Nest

To get started with Zelle, download the mobile app. You'll be prompted to search for your bank right off the bat.

Once you locate your bank, you'll need to give Zelle permission to link your bank account to the app.

Next, you'll need to log into your bank account online. This is followed by several steps to verify your identity.

Zelle is very clear about what it will be accessing in your bank account. As with any app, it's a good idea to read the fine print before clicking "I agree."

Once you're in, you'll see this screen. This is the home screen for the Zelle app, and you can probably already tell that it's pretty different from Venmo or other payment apps. There's no social feed, just three options: send, request, or split.

If you click on "Send" or "Request," you'll be prompted to choose from one of your phone's contacts. Once you've selected someone, it'll ask you for a dollar amount. You can also add a note explaining what the money is for.

Zelle has a $500 per week limit on how much money you can send, but if your bank offers Zelle, it may have different limits. 



You can also split money using Zelle. This could be helpful if you made a group purchase — all you have to do is enter the dollar amount and select each person from your contacts list. Then, Zelle will calculate the cost per person.

Zelle keeps track of your activity within the service — it even tracked money I had sent from within my banking app (more on that in a minute).

If your bank offers Zelle like mine does, it may be built directly into the bank's app. If I want to use the service, I can do so without having the separate Zelle app on my phone.

However, if you find yourself using the service a lot, you may like having the separate Zelle app, as it's a bit easier than logging into your bank account each time you want to send or request money.

But the best part about Zelle is that the money shows up in your bank account immediately. You don't have to wait several days for it to arrive. Plus, there's no fee for using the service.

Zelle is free to download for iOS and Android users. 



A transportation investor overseeing a $200 million portfolio reveals the biggest opportunities coming to the industry (LYFT)

Fri, 06/07/2019 - 1:35pm

  • Autotech Ventures was an early Lyft investor, and the firm has already doubled its money on the stake.
  • Alexei Andreev, a managing partner at the Menlo Park firm, explained his strategy for investing in seemingly disparate parts of the transportation industry.
  • He expects every element of transportation as we know it — from buying vehicles, to how we use, park, service, and eventually sell them — is ripe for disruption.

Uber and Lyft have been making headlines for the better part of a year, fueled in no small part by the two ride-hailing companies' massive initial public offerings.

But beyond the Wall Street hubbub, hundreds if not thousands of smaller startups are trying to tackle many of the same problems. After all, so much of a commute is connected. The car that drove you to work either has to park or go give more rides.

That's the thesis behind Autotech Ventures' portfolio. The Menlo Park, California-based venture capital firm just closed its second fund, and is managing about $200 million with investments in everything from ride-hailing, to parking apps, artificial intelligence, and insurance.

Alexei Andreev, a managing director of the firm, says there's more connecting those seemingly disparate investments than one might think.

"We believe the entire transportation stack — starting from how people choose vehicles, how they purchase vehicles, how they finance the purchase, how they insure the vehicles, how they put vehicles in fleets, how they manage those fleets, how vehicles are built, how vehicles are used to move cargo and passengers along the road, repair, service, and eventually how vehicles are disposed of — is undergoing a rapid transformation."

Not only are technological innovations like data-connectivity, sensors, and artificial intelligence set to make commutes "smarter" and potentially faster, the entire way people think about cars has begun to change.

"You have clear demographic changes, with people living in densely populated areas where personal car ownership doesn't make sense," Andreev continued.

He's far from the first investor to notice that society may be past "peak car." Analysts at Nomura Instinet expect global auto demand to sink 3% in 2019. The industry is cyclical, yes, but with oil at five-month low prices and a glut of used cars building up, "the peak in auto sales is clear," Bank of America said recently.

Then there's Uber and Lyft's massive IPOs this year. Each company cited a wane in personal vehicle ownership in their offering prospectuses, helping boost the massive addressable markets each company touted to investors.

Read more: Goldman Sachs says Uber's business model is one of its biggest risks

Choosing Lyft over Uber

Lyft vs Uber was a fight running through the mind of many investors in recent years. Despite the massive disparities in size, Autotech eventually chose Lyft. Andreev said that was partly due to Lyft's singular focus on ride-hailing as opposed to Uber's far-flung bets on flying cars, food delivery, and more. There was a more personal element at stake.

"First, we definitely knew Lyft better through John Zimmer, we had barbecues many times together and felt really good about it," Andreev said. "He graduated from the hospitality department at Cornell so he's very focused on customer experience. At the end of the day, you have to make sure your customers are happy and keep them coming back to you after having a positive experience."

Zimmer even lived with Andreev's co-founder, Quin Garcia, when he moved to San Francisco from the East Coast, so the personal connection cannot be overstated.

So far, Lyft has been a good investment for Autotech. The firm invested $120 million from the its first fund in early 2016. Depending on what Andreev decides to do with the shares after the 180-day lockup period, it could be the firm's first true exit from an investment, with a hefty profit to boot.

Read more: Uber and Lyft drivers reveal the wildest things they have seen while driving passengers

Lyft fits into a larger theme beyond ride-hailing, too

Consensus among many investors, researchers, and executives is that the societal transition to self-driving cars will be a slow one. Even slower, perhaps, than some initial estimates of a fully autonomous future.

Vehicle ownership, is also sure to be sticky in parts of the country where it's virtually impossible to live without a personal vehicle. For many businesses, too, they're a necessity of the trade.

"My wife, for example, uses our vehicle as an extended purse," Andreev said. "You need to carry your strollers, diaper bags, soccer balls, et cetera. I just cannot envision if you're going through this period of your life how you can get rid of your personal vehicle. Maybe some families will downsize from two to one, but these corner cases do exist."

Given that most cars sit idle for the majority of any given week or day, Autotech is investing in other ventures that can increase utilization, too.

Andreev noted that people are moving into online everything, like buying vehicles and booking hotels and such. Referring to his firm's participation in the parking app SpotHero's $31 million funding round in 2017, he said "it became clear to us that we wanted to invest in the company which can be the booking.com of parking."

"If you live in Silicon Valley and have to go to San Francisco," he said, "Over time you're saving 30% or 40% on parking while also removing your headache. It's a real painkiller by increasing that efficiency."

By the same token, Autotech has invested in a handful of startups aiming to increase utilization of assets. There's Outdoorsy, an online marketplace for recreational vehicles; Volta, a free electric-vehicle charging network supported by advertising revenues; Rollick, a platform for motorcycle sales; and more than a dozen more in the firm's current portfolio.

"My personal philosophy is if you have enough moats, you can build a lot of sustainable value," Andreev said. "I'm very sensitive to defensibility for particular opportunities that can come through either technology or a unique idea, algorithm, or other competitive advantage."

SEE ALSO: The CEO of a pogo-stick rental service knows you won't actually hop to work. Here's what's really going on at the viral Swedish startup.

Join the conversation about this story »

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Why everybody gets duped by hot health and science startups

Fri, 06/07/2019 - 1:15pm

  • Health and science startups seem uniquely positioned to fool investors and the public.
  • Theranos is a well-known example of a risky healthcare investment gone wrong, but a handful of other new health and science ventures have raised questions too.
  • Investors, psychologists, and researchers told Business Insider that this was happening for several reasons, including the amount of capital flooding the space as well as naivete and inexperience.
  • Primarily, the Silicon Valley tech ethos of "move fast and break things" is not being counterbalanced by the healthcare principal of "do no harm," the experts said.
  • Visit Business Insider's homepage for more stories.

Healthcare investing isn't for the faint of heart.

Where a traditional Silicon Valley tech startup might dare to disrupt how people share photos or hail a ride, health and science startups often involve putting vulnerable people's lives on the line.

Theranos is a well-known example of a risky healthcare investment gone wrong. Investors sank hundreds of millions of dollars in a blood-testing company with little to no published science, and when it was gradually revealed that the advanced technology required for the company's ideas did not yet exist, Theranos toppled.

John Ioannidis,  a professor of medicine at Stanford who was an early Theranos whistleblower, told Business Insider that the company was not an anomaly.

Ioannidis authored a recent study that found more than half of well-funded healthcare startups were failing to publish any research, a practice considered key to ensuring that the science behind a new company is solid and that it won't harm patients.

Ioannidis, along with investors, psychologists, and other researchers, told Business Insider that these problems were cropping up for several reasons, including the sheer amount of capital flooding the biotech startup space as well as scientific naivete and inexperience on the part of investors and the public. Primarily, the Silicon Valley tech ethos of "move fast and break things" is not being counterbalanced by the healthcare principal of "do no harm," the experts said.

"Most investors have very little ability to assess the validity of the promises and claims being made," Ioannidis told Business Insider. "They just go blindly, and some of them are lucky."

"Many of them are not," he added.

Nevertheless, biotech and healthcare startups have scored an unprecedented amount of money from investors in recent years. Last year saw more than $20.3 billion go to healthcare startups, according to data from the professional-services giant PwC. That's nearly three times the amount those startups took in in 2012.

'Move fast and break things' versus 'Do no harm'

A decade ago, Facebook's cofounder and CEO, Mark Zuckerberg, told Business Insider's Henry Blodget that Zuckerberg's prime directive to Facebook employees was to "move fast and break things."

It has become the unofficial motto of Silicon Valley.

Healthcare and biotech investors say it shouldn't apply to startups in their field, however.

Sometimes, founders can come to the healthcare space with the desire to disrupt things — to break away from the chains of regulation and give patients what they believe they need, Racquel Bracken, a vice president at the venture firm Venrock, told Business Insider.

Read more: As Silicon Valley tech giants like Facebook and Juul push into healthcare, they see revolution. Outside experts see red flags.

But while this attitude can work well in traditional tech fields like ride-sharing or social media, it becomes dangerous once you're dealing with something like a new treatment for a disease.

"In particular in Silicon Valley there's this ethos of 'move fast and break things' from the tech world," Bracken said. "That gets applied a lot with entrepreneurs who maybe don't have a healthy sense of respect around why healthcare is such a highly regulated industry."

Science is complicated, and vulnerable patients with life-threatening conditions may be more susceptible to hype.

That means regulatory agencies like the Food and Drug Administration play a key role in protecting people. She said startup founders seeking to steamroll those regulations did not have patients' best interests in mind.

"You have a huge responsibility when what you're doing is going to affect how someone's disease is treated," Bracken said. "The FDA exists for good reason."

'Even exceptional people can be duped and drawn in by brand'

From a psychological perspective, health and science startups may present the perfect storm to trick investors into believing in unfounded claims, some researchers told Business Insider.

Gordon Pennycook, an assistant professor at the University of Regina in Canada, has studied why so many of us can fall for seemingly impressive yet untrue statements. He and his team have found that randomly generated strings of words, formatted like aphorisms, are enough to consistently prompt feelings of profundity in experiment participants.

So why do we fall for what his team has called "pseudo-profound bullshit"? Why does neurobabble make arguments more impressive?

The reason people tend to fall for falsehoods, he said, is that they don't want to spend too much time challenging others' claims. In other words, it's easier to believe people than to challenge them. Since the brain has a finite amount of energy, people sometimes try to shorten the time they spend on critical thinking, Pennycook said.

Investors "don't have infinite cognitive resources," he added.

Read more: Silicon Valley startup uBiome raised $105 million on the promise of exploring a 'forgotten organ.' After an FBI raid, ex-employees say it cut corners in its quest for growth.

Health and science startup founders can also mask their complex ideas with jargon that entices investors to spend money without encouraging them to think too hard about their claims.

Julie Grant, a partner with the venture firm Canaan, said charismatic founders could also be highly persuasive. This can be especially true when their idea promises to shake up an ingrained part of the healthcare system or even save lives, like in the case of Theranos and its founder, Elizabeth Holmes.

"Even exceptional people can be duped and drawn in by brand," Grant told Business Insider last year.

While convincing leaders might appear to lend credibility to an idea, one magnetic founder is not enough to legitimize a health startup that risks people's lives, Benjamin Tseng, a principal at the venture firm 1955 Capital, told Business Insider last year.

"You can't just count on a charismatic CEO who will cobble together some people and say, 'OK this is going to work,'" Tseng said.

Unfortunately, the likelihood to fall for rubbish health products may have increased recently, according to Kit Yarrow, a professor emerita at Golden Gate University. People have what she called an "unquenchable thirst" for information about their bodies, minds, and relationships — and a recent report from Deloitte suggests they're spending more money on it now than ever.

Because the possibility of profit in the healthcare industry is high, some investors may also be less likely to think critically about a product's complicated science, Yarrow said.

"Venture capital has a model that fits really well with some industries. It fits great with retail," Yarrow said. "I don't know if it's that good of a fit for something that has a health component to it."

Ioannidis, too, said some investors get duped by health startups because investors often lack credentialed advisers who can warn them against bold, expansive claims.

"Health and biology are not tech problems," Ioannidis said. "They are more complex and involve steps proving safety, efficacy, and no harm."

SEE ALSO: More than half of billion-dollar health startups are failing to publish influential science — and some experts say that raises the risk of another $9 billion flop like Theranos

DON'T MISS: As Silicon Valley tech giants like Facebook and Juul push into healthcare, they see revolution. Outside experts see red flags.

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How to get a debit card so you can withdraw cash from an ATM

Fri, 06/07/2019 - 12:36pm

  • A debit card withdraws money directly from your checking account, either to make a payment or to convert into cash.
  • Once you have a checking account, getting a debit card is as simple as asking for one.
  • To use a debit card, you'll need a checking account and a PIN number.
  • Visit Business Insider's homepage for more stories.

A debit card withdraws money directly from your checking account, either to make a payment or to convert into cash.

Because a debit card is connected to your checking account, the money is immediately deducted as you spend, and you don't build balances that incur interest charges like you would on a credit card.

However, you also don't earn rewards like you would with a credit card, you don't get the time to pay off your balance like you would with a credit card, and you don't build credit like you would with a credit card. Using a debit card to make a payment is almost exactly like using cash, just with an electronic transaction and record of your purchase. 

Most checking accounts automatically come with debit cards, so you can withdraw cash from an ATM. Here's how to get one:

How to get a debit card 1. Open a checking account

Checking accounts can be easily opened at a bank or credit union, although some may have a minimum open balance requirement — the amount of money you must store there in order to keep the account open without paying fees to the bank. Be prepared to put money in the account immediately.

Some checking accounts might also have activity requirements, which dictate how often you must be depositing money or using the account in order to avoid paying fees. Also, you'll probably want to choose a bank or credit union with a wide network of ATMs in your area, which you should be able to use to withdraw cash without paying fees.

You will need to complete paperwork and some type of application to open a checking account. Typically, several forms of valid identification are needed, which could include a combination of driver's license, passport and/or Social Security card. People under are 18 may need an adult to co-sign on the account.

2. Ask for your debit card

When you are opening your checking account, tell the banking representative you would like a debit card to be linked to your account. It may take a week for the card to arrive in the mail. In some cases, you may be given a temporary card to use until the official one is generated.

3. Activate your debit card

When you receive your debit card, it will need to be activated, which is as simple as visiting a website or calling the bank's dedicated phone number. When you get your card in the mail, it will comes with directions on how exactly to activate it. It must be activated before it can be used.

If activating the debit card online, be sure to use a secure internet connection. Don't activate your debit card on a public Wi-Fi connection like in a coffee shop.

4. Create a PIN (Personal Identification Number)

A PIN is simple a password you use to verify transactions through your debit card.

Although your debit card may arrive with a pre-set PIN, you can select your own PIN, and you can generally change it during the activation process. Like any other password, your PIN should be kept private; it provides access to important services like the ability to withdraw cash, change personal information, and more. Unlike most passwords, a PIN is numeric only — there are no letters or special characters in a PIN.

Because PINs protect sensitive information (and your cash), you'll want to choose a PIN that is not predictable should your debit card be lost. The Balance has some good guidelines to remember when choosing a PIN.

Don't use:

  • Simple number sequences like 1234 or 0000 (including repetition: 1122 or 2233)
  • Dates, such as your birth year or spouse's birthday
  • Any part of your Social Security Number
  • Any part of your address or phone number
5. Figure out where you should use your debit card

While you can generally use a debit card at any ATM, you'll usually have to pay a fee for the privilege of using one that isn't affiliated with the bank or credit union that issued the debit card. 

This is more of an issue with traditional banks; some new online banks reimburse you for debit card fees up to a certain amount. If your bank does that, it will tell you upfront.

Ideally, you'll want to choose an ATM that does not charge a fee (which is why you took this into consideration in Step 1). Even $1 or $2 at a time adds up. Plus, why should you have to pay to access your money?

If there is a fee, make sure to check your statement to ensure the fee was charged correctly. Also, be aware that this fee is deducted from your checking account balance — you can't opt out of paying the fee.

6. Act quickly if your debit card is lost or stolen

Because your debit card pulls funds directly from your checking account, it's important to take swift action if your card is lost or stolen. The quicker you can have your bank or credit union cancel the card, the less opportunity someone has to use your card to make purchases or withdraw cash.

"Pick up the phone," says Joshua Hastings, founder of Money Life Wax. "Call your financial institution to notify them it has been lost or stolen. Your financial institution will cancel your existing card and replace it; this typically takes 10-14 business days."

You'll also want to monitor your checking account closely to make sure no one is using your card who shouldn't be.

Join the conversation about this story »

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Barnes & Nobles has been acquired by Paul Singer's giant hedge fund after years of decline (BKS)

Fri, 06/07/2019 - 12:22pm

  • Elliott Management is acquiring Barnes & Noble for about $683 million including debt, the companies said Friday.
  • While the bookseller has lost half its market value in the past five years, its shares soared Thursday after The Wall Street Journal reported the deal was in the works.
  • Watch Barnes & Noble trade live.

Elliott Management, the hedge fund led by the investor Paul Singer, is acquiring the beleaguered bookseller Barnes & Noble for about $683 million including debt, the companies announced Friday.

Elliott is acquiring the bookseller in an all-cash transaction that's expected to close in the third quarter. Shares of Barnes & Noble jumped early Friday on the announcement, a move that followed a 30% surge Thursday after The Wall Street Journal reported the deal was imminent.

Barnes & Noble would not mark Elliott's first bookstore deal. Elliott acquired Waterstones, the largest retail bookseller in the United Kingdom, one year ago. That chain's chief executive, James Daunt, will also assume the role of Barnes & Noble CEO once the deal is complete.

Elliott's investment in the bookseller, which has lost about half of its market value in five years, highlights the challenges brick-and-mortar retailers are facing in the age of online shopping and the rise of Amazon.

Read more: We shopped at Barnes & Noble and saw a key shortcoming that's hurting the chain in its battle against Amazon

Once a $2.4 billion company by market capitalization around its peak in 2006, Barnes & Noble has seen its market value shrink to just over $436 million. Its shares traded just under $6 apiece as of Thursday's close.

Last year, the New York-based company was mired in legal drama involving Demos Parneros, the bookseller's former chief executive. Parneros sued Barnes & Noble in August, saying the company falsely accused him of violating its sexual-harassment policy before terminating him without severance.

At the time, Barnes & Noble said the lawsuit was "an attempt to extort money from the company by a CEO who was terminated for sexual harassment, bullying behavior, and other violations of company policies."

In its Friday statement, Elliott said the fund was betting on the "experience" of bookstores.

"Our investment in Barnes & Noble, following our investment last year in Waterstones, demonstrates our conviction that readers continue to value the experience of a great bookstore," Paul Best, a portfolio manager who is head of European private equity at Elliott, said in a release.

Barnes & Noble is scheduled to report its fiscal 2019 fourth-quarter and year-end earnings results on June 19.

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These are the 10 best-performing stocks of this century

Fri, 06/07/2019 - 11:41am

Stocks can soar and plunge on a daily basis, but over time, the companies that consistently and responsibly grow their operations and show clear signs of progress tend to be rewarded by investors.

The 10 best-performing stocks in the S&P 500 index since 2000 are listed below, starting with number 10.

SEE ALSO: This century's best-performing US stock sells energy drinks, not iPhones (MNST)

10. Ross Stores

Return: 4,161%

Ross Stores is the largest off-price retailer in the US, offering discounts of 20% to 60% on name-brand apparel, footwear, and other items compared to department and specialty stores. The company opened its first Ross Dress for Less in 1982 and now runs more than 1,700 stores across 38 states, the District of Columbia, and Guam.

Ross Stores has grown its revenue from $2.7 billion in the year to February 2001 to $15 billion last fiscal year, and net income from about $152 million to $1.6 billion over the same period.



9. Apple

Return: 4,900%

Apple is one of the most valuable companies in the world with a market capitalization of more than $800 billion. Its founders, Steve Jobs and Steve Wozniak, together with current CEO Tim Cook, have revolutionized computing, communication, entertainment and other industries with products such as the iPod, iPad, iPhone, and Macintosh, and services such as the App Store, Apple Pay, and iTunes. 

The tech titan sold close to 218 million iPhones last fiscal year. It has grown its net sales from just under $8 billion in the year to September 2000 to $266 billion last fiscal year, and net income from $786 million to $59.5 billion over the same period.

 

 



8. Mastercard

Return: 5,495%

Mastercard, founded in 1966, is one of the world's largest payment-services companies. It issues credit and debit cards under the Mastercard, Maestro, and Cirrus brands. It has more than 800 million cards in circulation, and recorded $5.9 trillion in gross dollar volumes in 2018, according to its annual report.

The group has grown its revenue from about $1.4 billion in 2000 to $15 billion last year, and its net income from $118 million to $5.9 billion over the same period.



7. Idexx Laboratories

Return: 6,082%

Idexx Laboratories provides veterinary diagnostics, practice-management software, and biological testing in more than 175 countries. Its products and services are used to treat small pets, livestock, and poultry, to test water quality and dairy products, and to analyse human patients' electrolytes and blood gases.

Idexx has grown revenues from $367 million in 2000 to $2.2 billion in 2018, and net income more than tenfold to $377 million over the same period.



6. Ansys

Return: 6,657%

Ansys provides engineering-simulation software and services to customers including General Electric, Samsung, Ford, and Philips. Its offerings are used by engineers, designers, researchers, and students across industries including aerospace and defense, automotive, energy, consumer products, healthcare, and sports.

Ansys has grown its revenues from about $74 million in 2000 to $1.3 billion in revenue last year, and net income from $16 million to $419 million over the same period.



5. Intuitive Surgical

Return: 7,961%

Intuitive Surgical specialises in minimally invasive, robotic-assisted platforms, and services. More than 44,000 surgeons are trained to use its da Vinci surgical system, which has been deployed in more than 5 million procedures, including 1 million last year. The company has installed nearly 5,000 Da Vinci systems in hospitals worldwide, according to its latest annual report.

Intuitive has grown its sales from about $27 million in 2000 to $3.7 billion last year, and swung from a net loss of around $19 million to $1.1 billion in net income over the same period. 



4. Equinix

Return: 8,502%

Equinix connects more than 9,800 companies to their customers and partners through its data centers and interconnection platform. Netflix, AT&T, Ford, and PayPal use its hub to access services such as cloud storage from Amazon, Google, and Microsoft.

Equinix has grown from revenues of $13 million in 2000 to $5.1 billion last year, and transformed a net loss of $120 million into net income of $365 million over the same period.



3. Tractor Supply

Return: 10,240%

Tractor Supply is the largest retailer of farm-and-ranch supplies and equipment in America. Founded in 1938, it boasted 1,940 stores across 49 states at the end of 2018, according to its annual report. Livestock and pet products accounted for 47% of its net sales, while hardware, tools, and truck products made up 22%. Seasonal, gift, and toy products generated 19%, and clothing and footwear and agriculture products made up the balance.

Tractor Supply has grown its net sales more than tenfold in less than 20 years, from $759 million in 2000 to to $7.9 billion in 2018. It also boosted its net income from $16 million to about $532 million over the same period.

 



2. Netflix

Return: 30,359%

Netflix boasted more than 139 million subscribers in over 190 countries at the end of 2018. The on-demand video-streaming platform has drawn and kept subscribers by spending billions on the rights to TV series such as "Friends" and "The Office" and producing original shows such as "Stranger Things," "The Crown," and "13 Reasons Why."

Netflix has grown its sales from about $36 million in 2000 to $15.8 billion last year, and swung from a net loss of $57 million to net income of $1.2 billion over the same period.



1. Monster Beverage

Return: 70,511%

Monster Beverage has vastly outperformed all other S&P 500 stocks since 2000. It sells a range of drinks under brands such as Monster Energy, NOS, and Full Throttle. Its share price has surged from below $0.10 in January 2003 to more than $63, lifting its market value from less than $1 million to almost $35 billion.

The group has grown its net sales from about $80 million in 2000 to $3.8 billion in 2018, and net income from $4 million to $993 million over the same period.



The CEO of Zoom lays out its next big priority after its first earnings report as a public company blows away Wall Street expectations (ZM)

Thu, 06/06/2019 - 7:16pm

  • The video-conferencing startup Zoom reported its first earnings as a public company on Thursday, and it generated revenues of $122 million this past quarter — up 103% from this time last year.
  • Its report handily beat Wall Street expectations, and its stock soared more than 10% after the bell.
  • To keep growing, Zoom is betting on its new product, Zoom Phone, and expanding international sales.
  • Visit Business Insider's homepage for more stories.

Zoom reported its first-ever earnings as a public company on Thursday, and its stock skyrocketed more than 10% after reporting revenues that smashed Wall Street's expectations.

Zoom generated revenues of $122 million, up 103% from this time during the previous year. Those figures handily beat Wall Street estimates. 

Zoom now has more than 58,000 customers, 86% more than this time last year, and 405 of them paid $100,000 in the past 12 months, the company said in its earnings report.

"If you look at the video collaboration and phone system, it's also a huge opportunity," Zoom CEO and founder Eric Yuan said on the earnings call. "As long as we don't lose focus, it will keep us busy for the next several years."

Here's what Zoom reported:

  • Revenue: $122 million. Analysts were expecting $111.73 million.
  • Earnings per share (adjusted): $0.03. 
  • Revenue (next quarter): $129 million to $130 million. Analysts had predicted $123.25 million.
  • EPS (next quarter): $0.01 to $0.02. 

Zoom sees promise for its new product, Zoom Phone, although it said it's still too early to see results. Zoom Phone is a new cloud-computing service from the company that can replace old-fashioned corporate telephone systems. It integrates with the company's core video-chat apps so that customers can take voice and video calls from any device.

"When you see the phone system and look at the enterprise today, many people are still using old-fashioned on-prem phone systems," Yuan said on the earnings call. "Zoom can truly help with that."

Read more: Video-conferencing company Zoom soared 81% in its first day of public trading — now its CEO and CFO are focusing on these 3 goals

Kelly Steckelberg, Zoom's chief financial officer, said on the call that the company is now especially focused on international sales, and half of its new sales hires are international. She also said Zoom will keep its options open when it comes to possible acquisitions in the future.

"While we haven't been acquisitive historically, we will keep looking for companies that can elevate our company in terms of technology and personnel," Steckelberg said on the earnings call.

Zoom went public on April 18, and it soared 81% in its trading debut.

Got a tip? Contact this reporter via email at rmchan@businessinsider.com, Telegram at @rosaliechan, or Twitter DM at @rosaliechan17. (PR pitches by email only, please.) Other types of secure messaging available upon request. You can also contact Business Insider securely via SecureDrop.

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I drove a $126,000 BMW M850i convertible to find out if the powerful drop-top is worth the price — here's the verdict

Thu, 06/06/2019 - 7:09pm

  • The BMW M850i convertible is a stylish throwback with a powerful engine that nonetheless comes packed with high-tech features.
  • The convertible isn't cheap.
  • But the hefty price tag is certainly worth it if you've reached a certain stature in life and want to reward yourself.
  • Visit Business Insider's homepage for more stories.

In a world that seems to want nothing but suburban utes and upscale pickups, cars like the BMW M850i convertible are romantic anachronisms. What's the point of a top-down, grand-touring, two-door convertible with a 523-horsepower engine in a realm of bubbly crossovers with turbocharged four-bangers and trucks with room in the back for lumber and logs?

The rationale behind the revived BMW 8-Series is that there must be some people out there in Carlandia who value a long drive at high speed while dressed to the nines. They're probably older folks who spend more than $300 on sunglasses and favor equally pricey Italian sportswear. Their luggage matches. They fly first-class.

And the last time they had a BMW 850 to spend money on, it was the 1990s. Sure, they've had the 6 Series. But decades ago, the old 8's massive V12 motor meant that while the junior talent agents and guys who were trying to make partner while driving the 3 Series, there was something special for those who had hit the upper rungs of life's ladder.

The V12 option is gone, and in its place is a superior (if less cool to speak of aloud) V8 that rocks a pair of turbochargers. Simply put, the new M850i isn't screwing around with its raison d'être: to propel affluent adults toward the horizon at impressive velocities.

BMW recently loaned us a 2019 M850i xDrive convertible with all-wheel drive, stickering at $126,000. (There's also a coupé that starts at about $112,000.) I drove this first ragtop of the year around New York City and the New Jersey suburbs. I rolled large — very large. Here's what I thought.

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The 2019 BMW M850i xDrive convertible arrived in a sharp "Sonic Speed Blue" paint job.

The BMW 8 Series has been missing in action since the late 1990s. But boy, that old car was a thing of beauty! Back then, you could choose between a V8 or a V12.

The M850i looks ... OK with the top up, but the coupé looks better.

I immediately dropped the lid, an automated operation that takes about 15 seconds, with the soft top stowing in a compartment behind the back seat.

You really want to engage in some open-air motoring with the car. And fortunately, spring warmth and sunshine arrived on cue in the Northeast.

The signature BMW kidney grille is blacked out and narrow, stretching from headlight to headlight.

The M850i's proportions are good, not great. I'd prefer some extra hood.

The sleek headlights are adaptive LEDs, meaning the high beams can be adjusted to traffic by dimming and the headlights can adjust in their pods.

My test car came with 20-inch wheels, sporty rubber, M Sport brakes, and an adaptive M Sport suspension.

Trunk space is usually a compromise with convertibles ...

... and the M850i is no exception. There's barely enough room for a small gym bag and a squash racket.

The M850i badging is modest. This isn't a full-on BMW M car — a proper M8 will arrive later. But the M850i does get some M Sport goodies, such as the aforementioned brakes and an M Sport differential.

Let's pop the hood and check out that mighty powerplant!

The twin-turbocharged V8 is a 4.4-liter mill than makes 523 horsepower with 553 pound-feet of juicy torque. The power is sent to the all-wheel-drive system via an eight-speed automatic with manual mode. Fuel economy is surprising: 17 mpg city/26 highway/20 combined.

Time to slip inside! The M850i's interior isn't as posh as what you'd find in a Mercedes or an Aston Martin, but it's nevertheless quite well-appointed and tectonically purposeful. The front seats and armrests are heated and cooled — and there's a neck warmer available for $400.

The back seat is ... well, it's snug, with room for two adults as long as they don't mind developing a close relationship with their knees.

Nobody is going to argue with the sunshine pouring in, however.

I always find BMW steering wheels too thick. But the feel of the M850i's leather-wrapped wheel is excellent, and the buttons and knobs allow for hands-free operation of vehicle systems and the infotainment. The instrument cluster is all digital.

The wheel is also heated, and there's a nod to the M Sport features.

The BMW M850i has a "display key" with a small touchscreen to set climate controls remotely and assess the vehicle's status.

The display key is recharged using the car's wireless pad.

The center console houses the glistening crystal shifter (too much bling for me), the iDrive infotainment controls, and the drive-mode selector.

The M850i's infotainment system, iDrive, runs on a 10.25-inch screen. It's effective, but it's also rich with branching submenus.

GPS navigation was faultless in my testing.

Owners get a one-year subscription to SiriusXM satellite radio. There are also USB/AUX ports for devices, as well as Bluetooth pairing.

The system also showcases the drive modes. I rather enjoyed adaptive, which adjusts to driving needs and the driver's style ...

... but many owners will favor sport and sport-plus to get the full effect of that roaring, barking, rumbling V8 as you work it up and down the gears and the torque band. The M850i can hit 60 mph in 3.5 seconds, on its way to a top speed of 155 mph.

The Harman Kardon surround-sound audio system is brilliant. BMW has really found a superb partner here.

So what's the verdict?

I like two-doors with monumental engines: the Ferrari 812 Superfast, the Mercedes-AMG GT, the Aston Martin DB11. When you're talking about GT cars, you've got me at G.

This is, of course, age talking. I'm not a youngster, so taking a sports car hard into a corner appeals to me less than it once did. Going fast in a straight line is fine. If I'm surrounded by luxury, so much the better.

The M850i is what we might once have called a "fine automobile." You certainly feel fine in it, sort of like Goldilocks: It's not too stiff, but it's a Bimmer, so it's not too soft either. The car is cut from lightweight aluminum, but it manages to soak up the bumps relatively well. (It tips the scales at about 4,500 pounds, so it's not a featherweight.)

The V8 serves up 70 fewer ponies than what I savored in the M5 last year, but that's to be expected with the sub-M Sport M850i. To be honest, I don't need 600 horsepower to have fun — 500 and change is good by me.

The 850i I tested was also equipped with about $2,000 worth of driver-assist and semi-self-driving tech, which I had previously explored on a BMW X7 SUV. I avoided the parking assistant and the traffic-jam assist (the former is iffy, while in the case of the latter, I didn't find myself in any jams). The surround-view 3D camera is cool, however, providing a bird's-eye view of the vehicle when maneuvering.

If you're one of the few and the proud and the brave who might be in the market for a real GT car, the BMW M850i should OF COURSE be on your shopping list. To answer the question of whether it's worth $126,395 ... if you have to ask, you're kind of missing the point.



Beyond Meat soars 20% after crushing expectations for its first earnings report as a public company (BYND)

Thu, 06/06/2019 - 6:32pm

  • Beyond Meat reported first-quarter earnings that beat analysts' expectations after the closing bell on Thursday.
  • It was the company's first earnings release after its initial public offering in May. 
  • Analysts from JPMorgan and Jefferies maintained their price targets of $97 and $85, respectively, ahead of the report. 
  • Shares of Beyond have gained more than 300% since the May IPO. 
  • Watch Beyond Meat trade live.

Beyond Meat, the best-performing US initial public offering of the year, reported first-quarter earnings on Thursday that beat analyst expectations for the company's first release since its May IPO. Its shares surged by as much as 20% in after-hours trading on the news. 

Here is what the company reported versus what analysts surveyed by Bloomberg had expected:

  • Earnings per share: loss of $0.14 per share reported (loss of $0.15 expected)
  • Revenue: $40.2 million reported ($39 million expected)

"Our team continued to scale our business in both retail and foodservice as we benefited from broad-based growth in the first quarter," Ethan Brown, Beyond Meat's CEO, said in a press release.

Looking ahead, Brown said, the company believes it is in the early stages of the growth it's capable of achieving and is focused on efforts to increase brand awareness, expand distribution channels, launch new products, and invest in infrastructure to serve the demand for plant-based meat. 

Before the market open on Thursday, Beyond sat above $100 per share, a 301% increase from its IPO price of $25 and 118% above $46, where it started trading in May. The earnings report sent the stock on an upward tear, trading up more than 340% above its IPO price. 

The company also provided a full-year outlook for 2019. It expects revenues to exceed $210 million, an increase of 140% from 2018. 

The company has broad-based momentum in its business, and the market expects that a partnership with McDonald's will come through, a team of Jefferies equity analysts led by Kevin Grundy wrote in a note to clients. They maintained their "hold" rating and a price target of $85 on the stock ahead of earnings.

While this is the first company report investors have seen from Beyond as a public company, the company has not been without prior tests. Shares sank as much as 7% Monday on the news that Nestle, a major competitor, would release its own veggie burger in the US. Earlier on Thursday, shares of the company fell more than 2% following a report that some grocery stores aren't sure its products belong in the meat aisle.

There have also been questions about how Beyond will meet demand amid the massive popularity of plant-based burgers. According to The Wall Street Journal, Beyond and its rival Impossible Foods are struggling as fast-food joints such as Burger King, KFC, Del Taco, and Tim Hortons add vegan options to their menus. This isn't the first time that a shortage has plagued the company.

There is huge potential for growth if Beyond can meet demand. Its share price could see an additional 30% bump if it strikes a deal with McDonald's, according to Jefferies. 

In addition, plant-based meat sales could exceed $100 billion in the next 15 years, Ken Goldman and James Allen of JPMorgan wrote in a May 28 note to clients. That means Beyond would grow its revenue to $15 billion in the next 15 years, they added. 

"We do not believe this opportunity is fully priced in, despite the rally post-IPO," Goldman and Allen wrote. The analysts initiated coverage of the stock with an "overweight" rating and a $97 price target.

Shares of Beyond Meat are up more than 336% year-to-date. 

Join the conversation about this story »

NOW WATCH: Nxivm founder Keith Raniere began his trial. Here's what happened inside the alleged sex-slave ring that recruited actresses and two billionaire heiresses.

Jeff Bezos says the true secret to business success is to focus on the things that won't change, not the things that will

Thu, 06/06/2019 - 4:15pm

  • Amazon founder and CEO Jeff Bezos is constantly asked to predict what the future will be like in 10 years.
  • And he's game to try, even though he's the first to admit that he doesn't know.
  • However, he said that's really the reverse way to come at business strategy.
  • The best question to ask? What won't change in 10 years, he said on stage at Amazon's Re:Mars conference about artificial intelligence, robotics, and space.

LAS VEGAS — Amazon CEO Jeff Bezos is constantly asked to predict what the future will be like in 10 years — and he's game to shrug and try — but he said that's exactly the wrong way to go about business strategy.

"It's interesting, I do get asked quite frequently what's going to change in the next 10 years. One thing I rarely get asked is probably even more important — and I encourage you to think about this — is the question: What's not going to change in the next 10 years," he said on stage at Amazon's inaugural Re:Mars artificial-intelligence and robotics conference on Thursday.

"The answer to that question can allow you to organize your activities. You can work on those things with the confidence to know that all the energy you put into them today is still going to be paying you dividends 10 years from now," he said.

Read more: Amazon consumer CEO Jeff Wilke says that he's okay with government scrutiny but that the company shouldn't be broken up

For Amazon's e-commerce business, for instance, he knows that in the next decade people will still want low prices, fast shipping, and a large selection.

"It's impossible to imagine people saying to me, 'Jeff, I love Amazon. I just wish you delivered a little more slowly. Or, I love Amazon, I just wish your prices were a little higher,'" he said.

Bezos said that when a business leader can identify those big ideas that are stable — and are usually customer needs — it changes how the leader organizes their business, what they fund, what risks they take, and so one. The focus becomes, "What can we do to offer lower prices? To deliver faster? and so on," Bezos said.

In contrast, he said that when a leader bases their strategy on things that will change, like who the competitors are and what their activities are, "you are going to have to be changing your strategy all the time."

And, he added that when it comes to knowing what won't change, "you won't have to do a lot of research on that. As soon as you think about it that way, these things are so big, so fundamental; you can just write the answers down."

SEE ALSO: Robert Downey Jr. has vowed to use robotics and AI to significantly clean up the Earth in the next decade

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NOW WATCH: This London handbag company has recycled 175 tons of fire hoses into fashion accessories

I have 20 credit cards but I only carry 3 in my wallet. Here's how I choose which ones I can't go without.

Thu, 06/06/2019 - 4:03pm

Business Insider may receive a commission from The Points Guy Affiliate Network if you apply for a credit card, but our reporting and recommendations are always independent and objective.

As a credit card rewards reporter — and enthusiast — I've had, and still have, a lot of different credit cards. I've assessed even more, looking at the rewards they offer, what they can be used for, and the various benefits.

Despite the fact that I've had more than 20 different credit cards, there are only three that I keep in my wallet right now — and a few others which I occasionally add, depending on whether I need them or not.

While these cards have a combined annual fee of more than $1,250 — which might seem absurd — they offer tangible, real-value benefits that I take advantage of to virtually offset those fees. Just by subtracting the value I get from various statement credits, for purchases I would be making anyway, the effective total fee drops down to just $230 — less, if I can take advantage of some of the credits twice during a cardmember year.

Keep reading to see my everyday cards, and the two I carry when I need them.

These cards are always in my wallet: Chase Sapphire Reserve

The Chase Sapphire Reserve has a permanent spot in my wallet, and is one of my two daily drivers.

I value Chase Ultimate Rewards points rather highly, since they're arguably easier to use than any other high-value rewards currency. Plus, you can pool them with other household members, so my wife and I can combine our points when it's time for a redemption.

The Sapphire Reserve earns 3x points per dollar spent on all travel and dining purchases — a big portion of my spending — and 1x point on everything else. That means I get 3x points on lunch, coffee, drinks at bars, dinners out (or take-out), taxis, train rides, and bigger travel expenses like flights or hotels.

An extra incentive for using the Sapphire Reserve on travel purchases — especially flights — is that it offers trip delay coverage. If my flight or Amtrak ride is ever delayed six or more hours — or overnight — I'm covered for up to $500 in expenses, like meals, taxis, hotels, or even necessities like toiletries, a change of clothes, charging cables, or more.

It has no foreign transaction fees, and earns points on bonus categories whether you're in the US or abroad, so it's also my go-to when I'm traveling.

The Sapphire Reserve has a $450 annual fee, but you get $300 in statement credits to cover travel purchases each year. The credits are automatically applied — you don't earn points on that $300, of course — and bring the effective annual fee down to just $150. The rewards and benefits cover the rest.

Click here to learn more about the Chase Sapphire Reserve from Business Insider's partner, The Points Guy.

Chase Freedom Unlimited

The Freedom Unlimited is my other daily driver. While it's marketed as a cash-back card that earns a flat rate of 1.5% on everything, it's actually a points card — it earns 1.5x points per dollar spent, and you can redeem each point for 1¢ in cash back. However, if you pair it with a premium card like the Sapphire Reserve, you can pool the points, and use any of the Sapphire Reserve's wider range of redemption options.

Instead of a traditional sign-up bonus, the Freedom Unlimited offers double its normal earning rate — so 3% back, or 3x points per dollar — on up to $20,000 of spending your first year. That means up to an additional $300, or 30,000 points.

The Freedom Unlimited has no annual fee, making it an easy choice.

Click here to learn more about the Chase Freedom Unlimited from Business Insider's partner, The Points Guy.

American Express® Gold Card

The AmEx Gold earns 4x points per dollar at restaurants worldwide, and 4x on up to $25,000 each year at US supermarkets (and 1x after that), 3x on flights booked directly with the airline, and 1x point on everything else.

There's some overlap with the Sapphire Reserve  — read our comparison of the two cards here — so I switch off each month on which card I use for my dining purchases. I also value AmEx Membership Rewards points, and like to diversify my points stash, so for me, it makes sense to alternate between the Chase card and the AmEx.

The AmEx Gold Card offers up to $100 in credits each calendar year on airline fees, and up to $120 in annual 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, as well as Boxed.com.

Those two credits — which I maximize each year — bring the card's $250 annual fee down to an effective $30.

Click here to learn more about the AmEx Gold Card from Business Insider's partner, The Points Guy.

I only carry these cards when I need them: Platinum Card® from American Express

I'm a fairly frequent flyer, which means that having the AmEx Platinum Card is essential. The card offers access to more than 1,200 airport lounges around the world, and has extensive access to lounges within the US.

The card has the highest annual fee on this list — $550 — but, like other cards, statement credits cover most of it, while other benefits make up the rest — in my first year with the card, I got more than $2,000 in demonstrable value.

Up to $200 each calendar year in airline fee credits, up to $200 in Uber credits each year, and up to $100 in annual shopping credits — all of which I make sure to use — brings the effective annual fee down to $50. Just a few coffees and breakfasts in airport lounges covers the rest.

But there's more. The card offers benefits at hotels, complimentary Gold status at Marriott and Hilton, and more which add direct, tangible value. If you're an active servicemember, you can get all of these benefits without paying any annual fee.

The reason the card isn't a mainstay in my wallet — while it's benefits-rich, it's somewhat rewards-poor. The only rewards bonus category is flights booked directly with the airline or through AmEx Travel, and Fine Hotels and Resorts stays paid for through AmEx Travel. It earns 5x points on each of those.

I use the card to pay for flights when I either don't feel worried about extensive delays, or I'm planning on getting third-party travel insurance that happens to include trip delay coverage. Otherwise, I pay with the Sapphire Reserve, and only put the Platinum Card in my wallet when I have a flight coming up and need the card to access a lounge.

Click here to learn more about the AmEx Platinum Card from Business Insider's partner, The Points Guy.

Chase Freedom

The Chase Freedom works just like its sibling, the Freedom Unlimited, in that it's marketed as cash-back but actually earns points that can be pooled with a Sapphire Reserve. However, its earning structure is different.

Each quarter you activate, the Freedom earns 5% back — or 5x points — on spending within a few different rotating categories, on up to $1,500 of purchases. It earns 1% back — or 1x point per dollar — on everything else. 

Some quarters, when the categories are useful to me — like Q2 2019, when the bonus categories include grocery stores — I keep the card in my wallet. Otherwise, I leave it in my dresser and just keep the Freedom Unlimited with me.

Because the card has no annual fee, there's no reason for me not to keep it handy in case the categories work out.

Click here to learn more about the Chase Freedom from Business Insider's partner, The Points Guy.

SEE ALSO: The best credit card rewards, bonuses, and benefits of 2019

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We spoke with some of the investors getting richer off Google Cloud's $2.6 billion acquisition of data-analytics company Looker (GOOG, GOOGL)

Thu, 06/06/2019 - 3:10pm

Google Cloud announced Thursday that it would acquire the data-analytics company Looker for $2.6 billion, $1 billion more than its latest valuation, just six months ago.

The deal is Google's largest since it purchased Nest, the smart-home-device maker, for $3.2 billion in January 2014.

Looker, which allows companies to analyze and define data across multiple teams, was most recently valued at $1.6 billion in December after it raised $103 million in Series E funding, according to PitchBook data.

In total, since its founding in 2012, the startup had raised a little over $280 million from Kleiner Perkins, Meritech Capital Partners, Redpoint Ventures, Sapphire Ventures, First Round Capital, Goldman Sachs, CapitalG (formerly Google Capital), and IVP, among others. Today, many of these investors are seeing a payday.

"I fell out of my chair when I saw the tech because it's just so hard to build," Tomasz Tunguz, a Redpoint Ventures partner and former Looker board member, told Business Insider.

"It was the dog days of August, and I was asking my network of friends in the startup ecosystem about it, and they all said it completely changed how they ran their business," Tunguz said.

Read more: Design startup Canva is now a $2.5 billion company, thanks to the first-ever investment from legendary VC Mary Meeker's new fund

Redpoint Ventures led Looker's $16 million Series A in August 2013 with $15 million in funding. The round came with a pre-money valuation of $64 million. It's reasonable to assume that with such a hefty stake early on, Redpoint stands to make a tidy profit from its investment when the deal closes later this year.

Looker's founder Lloyd Tabb "and the Looker team have this mission of empowering people to use data at scale to improve their lives, and Google's mission is basically the same," Tunguz told Business Insider. "Looker built its data-collection model on Bitfury and Snowflake, so I'm excited to see the next-gen data stack come together now that they have access to Google's data set."

Redpoint also participated in Looker's $30 million Series B in 2015, which Meritech Capital Partners led. The round was tied to a pre-money valuation of $150 million, according to PitchBook.

"In the crowded analytics space, Looker stood out for its product architecture (in particular the metadata layer), its extreme level of customer passion (customers often described Looker as valuable as oxygen), and its strong and unique company culture," Rob Ward, a Meritech Capital partner, told Business Insider in an email. "Lloyd Tabb, Frank Bien, and the entire team have built a remarkable business — and there's plenty more to come."

First Round Capital was one of the earliest outside backers for Looker and led its $2 million seed round in April 2013. That first round valued the company pre-money at $14 million, a figure that increased by more than 400% by the company's Series A four months later.

"When Looker (at the time the company was actually called Llooker) was coming into our partner meeting to pitch us, I called their customer references — and I was blown away by just how much these early customers loved the product," Bill Trenchard, a First Round Capital partner, told Business Insider via email. "This handful of early customers was so receptive, they referred dozens of other potential customers to Looker. Their enthusiasm started a word-of-mouth virality that we rarely see with an enterprise product."

Looker will continue to operate out of its offices in Santa Cruz, California — a move that Tunguz is likely to appreciate. He pointed to Google's success in acquiring and running YouTube, which remained at its offices in San Bruno post-acquisition, as the ideal model for Looker moving forward.

"They don't need any advice from me; I was the one that was learning from them," Tunguz said.

Kleiner Perkins declined to comment, as its partner John Doerr sits on the board of Alphabet, Google's parent company.

SEE ALSO: The SoftBank Vision Fund has taken Silicon Valley by storm by writing monster checks. Here are the power players every startup founder should know.

Join the conversation about this story »

NOW WATCH: The US has 1,200 tornadoes each year. That's 4 times as many as the rest of the world combined.

Cloudera crashes in its worst day ever after the company slashes sales outlook, announces CEO departure (CLDR)

Thu, 06/06/2019 - 2:38pm

  • Cloudera shares plunged as much as 42% Thursday, putting it on pace for a record intraday drop after the software company reported quarterly earnings the prior evening.
  • The firm also announced that its CEO and cofounder will depart the firm.
  • The report marks Cloudera's second straight quarter of disappointing revenue guidance.
  • A slew of Wall Street analysts cut their targets, estimates, and investment ratings.
  • Watch Cloudera trade live.

Shares of Cloudera crashed by as much as 42% on Thursday for its largest intraday drop on record. The move came as the software company's dismal first-quarter earnings report prompted Wall Street to issue scathing mea culpas.

Investors dumped the stock after Cloudera's revenue fell short of analyst expectations and its sales outlook fell short. The company also announced its chief executive, Tom Reilly, and chief strategy officer and co-founder, Mike Olson, would depart.

"We were wrong," Rishi Jaluria, a senior research analyst at the firm D.A. Davidson, said in a Thursday note to investors describing a quarter he called "disastrous" with "few silver linings" for the Palo Alto, California company. 

"We have stubbornly stuck with Cloudera, as we felt concerns around competition were too severe," Jaluria added. "In retrospect, we were very wrong, and perhaps relied too heavily on taking management at its word, especially since Cloudera has had sales execution issues in the past."

More granularly, Cloudera's tepid outlook was based upon weak bookings from customers who are waiting until the release of the Cloudera Data Platform, a higher churn than expected, and heightened competition from the likes of Amazon Web Services and Azure. 

Still, Jaluria held onto his "buy" rating because he's optimistic in the capabilities of Cloudera's data platform. He added: "If all else fails, there's private equity or IBM."

Here's what Cloudera reported compared with what Wall Street analysts polled by Bloomberg expected:

  • Revenue: $187.5 million ($188.4 million expected)
  • Adjusted loss per share (EPS): -$0.13 (-$0.23 expected)

Several Wall Street firms, including Stifel, Needham, and Raymond James, lowered their investment ratings on the stock. Others, like Barclays and Wells Fargo, cut their price targets and reduced their earnings estimates.

"Cloudera expects CDP private cloud product to be its biggest revenue growth driver, but the product is slated to be released towards the end of the year, which could lead to more churn," the Barclays analyst Raimo Lenschow wrote to investors. 

Even still, the stock has not garnered a single "sell" rating across Wall Street, according to Bloomberg data. Meanwhile, five Cloudera analysts have "buy" ratings, 15 have "hold" ratings.

This report wasn't the first to pummel the company's shares.

Last quarter the stock tanked nearly 20% after Cloudera's outlook disappointed analysts' expectations — even as sales topped estimates. It was the first report after the company's Hortonworks merger.

Shares have fallen 69% in one year, and were trading just above $5 a share in Thursday trading.

Join the conversation about this story »

NOW WATCH: Nxivm founder Keith Raniere began his trial. Here's what happened inside the alleged sex-slave ring that recruited actresses and two billionaire heiresses.



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