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The history of how Uber went from the most feared startup in the world to its massive IPO

Sat, 05/18/2019 - 2:42pm

  • Uber went public this month on the New York Stock Exchange in a much-watched IPO.
  • Since it was founded in 2009, Uber has transformed the ride-hailing industry and grown to become the most valuable companies in the world.
  • See the highs and lows of Uber in its journey from small San Francisco startup, through its extremely tumultous 2017, through to its 2019 IPO.
  • Visit BusinessInsider.com for more stories.

Ten years ago, a company called UberCab made a splash in San Francisco by letting you hail a car with your smartphone. Since then, the company — now known just as Uber — has spread like wildfire across the globe. 

But the road hasn't been easy.

While its valuation continued to climb over the years, Uber has also fought rivals and regulators as it has transformed from a black-car service into a sprawling empire going after the markets for both food delivery and self-driving cars. It has confronted threats from the taxi industry, endured backlash from its drivers and users both, and weathered internal strife and scandal, including the ouster of controversial former CEO Travis Kalanick.

Now, in the wake of Uber's IPO, we take a look at how we got here.

This is an update to a story originally published in 2016.

SEE ALSO: The woman who rang Uber's IPO bell is Austin Geidt, whose life is the stuff of Valley legend

April 2007: Travis Kalanick becomes a millionaire at age 30. He sells his startup, called RedSwoosh, to a cloud company called Akamai for $23 million. It's the second company's he's been involved in since he dropped out of UCLA in 1998.

Source: Business Insider



December 2008: Travis Kalanick attends the LeWeb technology conference in Paris, where he first hears the idea for Uber from StumbleUpon founder Garrett Camp. Camp tells a story about spending $800 on a private driver for New Year's, and how splitting the cost with a lot of people would make black car services more affordable.

Source: Business Insider



March 2009: Camp and two graduate school friends, Oscar Salazar and Conrad Whelan, build the first version of their black-car service, called UberCab. Kalanick served as a "mega advisor," but he has also said his title back then was "chief incubator."

Source: Business Insider



January 2010: Kalanick tweets: “Looking 4 entrepreneurial product mgr/biz-dev killer 4 a location based service.. pre-launch, BIG equity, big peeps involved--ANY TIPS??” Ryan Graves, who would later be named Uber's first CEO, responds to the tweet, and was hired as a general manager.

Tweet Embed:
https://twitter.com/mims/statuses/7422940444
@KonaTbone heres a tip. email me :) graves.ryan[at]gmail.com

Source: Business Insider



June 2010: UberCab launches in San Francisco. At the time, it cost about 1.5 times as much as a cab, but ordering a car was as simple as sending a text or pressing a button. It quickly became a hit among Bay Area techies.

Source: Business Insider



October 2010: UberCab closes a $1.25 million seed funding round from First Round Capital, investor Jason Calacinis, Kalanick's friend Chris Sacca, and Napster cofounder Shawn Fanning.

Source: TechCrunch



October 2010: UberCab rebrands as Uber. The change is made to avoid the company from marketing itself too much like a taxi business. Tensions with the taxi industry would become a recurring theme for Uber.

Source: TechCrunch



December 2010: Ryan Graves, who was Uber's first CEO, steps down, and is replaced by Kalanick. Graves became Uber’s general manager again, and both have said the reshuffle was a friendly one.

Source: Business Insider



February 2011: Uber closes an $11 million Series A funding round that values the company at $60 million. Benchmark leads the round, and the firm's Bill Gurley joins Uber’s board of directors.

Source: TechCrunch



May 2011: Uber launches in New York City, which is today one of its biggest markets, but which also presents some of the strongest pushback from the taxi industry.

Source: Business Insider



December 2011: Uber begins to expand internationally, starting with Paris, France. It also closes a $32 million Series B funding round led by Menlo Ventures, Amazon CEO Jeff Bezos, and Goldman Sachs.

Source: TechCrunch



January 2012: Uber is slammed for price surging for rides on New Years Eve. Users, who had to pay three- to six-times the normal cost of a ride, were furious.

Source: Business Insider



July 2012: Uber unveils its secret, low-cost "UberX" project to the world. The service debuts at 35% less expensive than the original black cars, and features cars like the Prius and the Cadillac Escalade. Kalanick declares that "Uber is ultimately a cross between lifestyle and logistics."

Source: TechCrunch



August 2012: Lyft, which is considered Uber’s main competitor, launches in San Francisco. The stage is set for the San Francisco price war that will follow.

Source: TechCrunch



August 2013: Uber moves into India and Africa, and it closes a Series C funding round that sees an enormous $258 million investment from Google Ventures, now known as GV. This round values Uber at $3.76 billion.

Source: TechCrunch



December 2013: A lawsuit, on behalf of 35,000 current and former Uber drivers, is filed against the company. Drivers claim they should be treated as employees instead of contract workers, which would force Uber to pay them minimum wage and provide them with benefits. The case was settled out of court in 2016.

Source: Business Insider



February 2014: Uber weathers its first major scandal. In an interview with GQ, Kalanick calls the service "boob-er," because it's helped him attract "women on demand."

Source: GQ



April 2014: Uber begins its UberRush service, which brings a bicycle delivery service to Manhattan. The service starts at $7 — a $3 base fare and $4 per mile. Uber shut down Rush in March 2018.

Source: The Next Web, Fortune



July 2014: Uber enters China after raising a $1.2 billion funding round at a $17 billion valuation a month previous. At the time, China looked like it was set to become Uber’s biggest market.

Source: TechCrunch



August 2014: Uber launches its UberPool service, which lets you split the ride and cost with another person who is riding a similar route. It’s the Uber version of carpooling.

Source: Uber



December 2014: Uber raises $600 million from Chinese search powerhouse Baidu. Baidu’s mobile-search and maps apps begin to integrate with Uber, and it seemed that Uber was gearing up for a fight with other prominent Chinese tech companies.

Source: TechCrunch



December 2014: Uber is banned in India's Delhi region after a passenger accused her driver of rape. The case raises criticism and concern of Uber's licensing and screening procedures for its drivers.

Source: New York Times



February 2015: Uber announces a partnership with Carnegie Mellon University to create a new facility in Pittsburgh for testing self-driving cars. The first test vehicles out of Uber's Advanced Technologies Center are seen on the streets of Pittsburgh a few months later.

Source: Guardian



March 2015: Uber begins the process of buying mapping startup deCarta — its first acquisition — to work towards decreasing the company's reliance on Google Maps.

Source: Business Insider



April 2015: Uber launches UberEats, an on-demand food-delivery service that brings meals to your location in minutes. The service starts in four pilot cities — LA, Barcelona, Chicago, and New York City — and expands nationally.

Source: Uber



May 2015: Uber poaches more than 40 employees from Carnegie Mellon University in Pittsburgh to staff its robotics-research facility, which it opened in February to build self-driving cars. Kalanick had previously mused: "The reason Uber could be expensive is because you're not just paying for the car — you're paying for the other dude in the car.”

Source: Business Insider



June 2015: Violent protests erupt up across France as taxi drivers and their supporters block roads, burn tires, and attack suspected Uber drivers.

Source: The New York Times



June 2015: The California Labor Commission rules that an Uber driver is an employee, not a contractor, which calls Uber’s underlying business model into question. The decision comes after a San Francisco driver, Barbara Ann Berwick, files a claim against Uber.

Source: Business Insider



September 2015: Uber's China arm raises $1.2 billion to aid in its fight in the China market. Uber’s biggest competitor — Didi Kuaidi, later called Didi Chuxing — responds by raising about $3 billion.

Source: Business Insider



February 2016: Uber agrees to pay $28.5 million to 25 million riders to settle a class-action lawsuit surrounding its advertisements. After the settlement, Uber is no longer allowed to use the terms "industry-leading" or "best in class" in reference to its background checks.

Source: Business Insider



May 2016: Uber and ride-hailing competitor Lyft both exit Austin, Texas, after the city's voters backed a measure that would require fingerprint background checks for drivers. Both companies returned to the city in 2017.

Both Uber and Lyft had spent millions working to repeal the city's ordinance, making it an embarrassing loss for both companies. 



May 2016: Uber and Toyota sign a "memorandum of understanding" to explore how the two companies could work together.

Source: Business Insider



June 2016: Uber raises $3.5 billion from the Saudi Arabia Public Investment Fund, Uber's largest investment from a single investor. Yasir Al Rumayyan, managing director of the Public Investment Fund, joins Uber's board.

Source: Business Insider



June 2016: Kalanick proclaims that Uber was profitable in hundreds of cities globally, but that the money was being reinvested in its war against Chinese rival Didi. The company said at the time that it was losing $1 billion each year in its fight against Didi.

Source: Business Insider



July 2016: The company gets another $1.15 billion cash infusion, this time in the form of a leveraged loan. The company took advantage of low interest rates and secured a loan that was said to "support Uber's global expansion and operations and invest in research and development and engineering."

Source: Reuters



July 2016: Uber runs into trouble in Hungary. The company is forced to pull out of the country after government legislation makes it impossible to operate. The move followed months of protests by taxi drivers. Uber has since re-entered the country.

Source: Reuters



July 2016: Uber announced in mid-July that it had completed its two billionth trip, just six months after reaching one billion rides.

July 2016: A federal judge ruled that Uber "engaged in fraudulent and arguably criminal conduct" when it used an investigative firm to conduct a background check on a plaintiff in a lawsuit.

The plaintiff accused Kalanick of violating anti-trust laws by coordinating surge pricing. 

 

 



July 2016: The Chinese government legalizes ride-hailing. Uber was hoping to beat out its main Chinese competitor, Didi Chuxing, and put a reported $2 billion into its business in China. Didi eventually emerged victorious, and later merged with Uber China in a $35 billion deal.

Source: Bloomberg



December 2016: Uber launches an autonomous car program in San Francisco. However, California's DMV quickly declared the program illegal, and Uber was forced to end it and look to other locations for testing its driverless cars.

Source: New York Times



January 2017: President Donald Trump announces a travel ban to several majority Muslim countries. In response, protesters swarmed at a New York City airport, with taxi drivers striking in support. However, Uber continued to operate — leading to a backlash, as "hundreds of thousands" of customers took part in the viral #DeleteUber campaign.

Source: Business Insider



February 2017: A former Uber engineer named Susan Fowler published a blog post with allegations of a toxic and sexist culture at the company. Kalanick pledges to look into the matter, and hires former US attorney general Eric Holder to lead an independent investigation into the company's culture.

Source: Business Insider



February 2017: Fowler's story is followed by a New York Times report about Uber's "aggressive, unrestrained workplace culture." The story alleges that Uber employees did cocaine during a company retreat, and that a manager was fired after he was accused of groping multiple female employees.

Source: New York Times



February 2017: On Super Bowl Sunday, dashcam video shows Kalanick losing his cool in an argument with an Uber driver about lowered fares. The Uber CEO issues a "profound" apology, and says he'll seek out leadership help by hiring a chief operating officer at the company.

Source: Business Insider, Bloomberg



February 2017: Waymo, the self-driving car company spun out from Alphabet, files a lawsuit against Uber. The lawsuit alleges that Uber stole Waymo trade secrets, and shines the spotlight on Anthony Levandowski — a former Google engineer who came to Uber by way of the acquisition of his company, Otto.

Source: Business Insider



March 2017: Kalanick's ex-girlfriend, violinist Gabi Holzwarth, details incidents of sexism she witnessed at Uber. One story she tells is about a visit by several Uber executives to an escort-karaoke bar in South Korea, which allegedly led to a female executive filing a complaint with Uber's human resources.

Source: Huffington Post



March 2017: Uber's head of engineering, Amit Singhal, resigns from his position after it was reported that he had faced sexual harassment allegations during his time at Google, his previous employer — allegations that he reportedly didn't disclose when Uber hired him.

Source: Business Insider



June 2017: The results of the internal investigation into Uber's workplace culture are released to the board. The investigation found 215 claims from employees of discrimination and sexual harassment, and the company says that over 20 employees were fired following the report.

Source: Business Insider



June 2017: Kalanick takes a leave of absence from Uber to "work on myself" after a year riddled with scandal and controversy. No timeline is given for Kalanick's return.

Source: Business Insider



June 2017: Kalanick resigns as CEO of Uber. Kalanick's exit reportedly follows "hours of drama" between Uber's major investors, five of whom demand his immediate resignation.

Source: New York Times



August 2017: Early Uber investor Benchmark Capital sues Kalanick over fraud allegations, in a lawsuit centering on 3 Uber board seats that Kalanick can unilaterally fill with whomever he chooses. Kalanick used one of those seats to appoint himself to the Uber board after he resigned as CEO.

Sources: Business Insider



August 2017: Dara Khosrowshahi is named Uber's new CEO to fill the vacancy left by Kalanick. Khosrowshahi had served as Expedia's CEO until he left to head up the ride-hailing company.

Sources: Business Insider



September 2017: In a surprise move, Kalanick exercises his control over the last two Uber board seats under his control, and and appoints Xerox chairwoman Ursula Burns and former Merrill Lynch CEO John Thain. The move seems to be designed to get ahead of proposed changes to the board structure that would limit Kalanick's power.

Sources: Business Insider, Vox



November 2017: Bloomberg reports that Uber paid hackers $100,000 to cover up a massive data breach from October 2016 — when Kalanick was still in charge — that exposed the personal data of 57 million customers. In a statement, Khosrowshahi said: "None of this should have happened, and I will not make excuses for it."

Source: Bloomberg



January 2018: Uber officially closes a deal for Japanese investor SoftBank to take a 15% stake in the ride-hailing company, becoming its largest shareholder. The deal severely limits Kalanick's influence and voting power on the board — and gives SoftBank a considerable discount on shares of Uber.

Source: Reuters, Business Insider



January 2018: Benchmark drops its lawsuit against Kalanick, which is part of the terms of SoftBank's deal with Uber. The suit is dropped "with prejudice," meaning Benchmark can never sue Kalanick over this issue again.

Source: Business Insider



February 2018: Waymo and Uber reach a settlement in their high-stakes legal battle over self-driving car technology. Under the terms of the agreement, Waymo receives $245 million in Uber equity.

Source: Business Insider



March 2018: An Uber self-driving car strikes and kills a 49-year-old pedestrian named Elaine Herzberg in Arizona. It's the first recorded pedestrian deaths involving an autonomous car. Uber briefly pauses its self-driving program as a result of the death, and Arizona suspends the test project.

Source: Business Insider



August 2018: Toyota invests an additional $500 million into Uber, valuing the company at $72 billion.

Source: Wall Street Journal



September 2018: Uber agrees to pay $148 million in a settlement around the 2016 data breach that affected 57 million users. The lawsuit against Uber involves attorneys general from every US state.

Source: Business Insider



October 2018: The Wall Street Journal reports that banks had written proposals for an Uber IPO that would see the company valued as high as $120 billion.

Source: Wall Street Journal



December 2018: Uber reportedly gets close to putting its self-driving cars back on the road. The downsized project is limited to testing autonomous vehicles, with a 25 m.p.h. speed limit, on a mile-long loop between Uber offices in Pittsburgh.

Source: Business Insider



April 2019: Uber officially files its S-1 paperwork to go public on the New York Stock Exchange, under the ticker symbol UBER. The IPO is set to be one of the biggest in years — especially with that $120 billion figure floating in the air.

Source: Business Insider



April 2019: A University of South Carolina student named Samantha Josephson is allegedly murdered after getting into a car she thought was her Uber. As a result, Uber says it will hold campus awareness events about safety and take steps to remind users to verify they're getting into the right car.

Source: INSIDER



May 2019: Ahead of Uber's IPO, drivers go on strike. Drivers protest declining pay, worsening conditions, and a lack of transparency from Uber, Lyft, and others. A workers union out of the United Kingdom called Uber's IPO an "orgy of greed."

Sources: Business Insider, Business Insider



May 2019: Uber goes public on the New York Stock Exchange, and prices its IPO at $45 a share with an initial market cap of $75.5 billion. However, by the end of the day, shares were down to $41.57 a piece, leaving investors who got in at the IPO price with a cumulative loss of $655 million.

Source: Business Insider



May 2019: The US National Labor Relations Board rules that Uber drivers are independent contractors, not employees. It's a big win for Uber.

Source: Reuters



May 2019: The Washington Post reports that some Uber employees started partying in the offices 5:30 a.m. on the day of the company's IPO. The festivities reportedly led one Uber employee to resign after "a verbal outburst and dispute with colleagues."

Source: Washington Post



Before he was a billionaire, WeWork CEO Adam Neumann was broke. Here's the NYC building where he and his wife lived in a tiny apartment before he built a $47 billion company

Sat, 05/18/2019 - 10:15am

WeWork CEO Adam Neumann's coworking company is worth $47 billion, but not too long ago, he was broke.

Neumann and his wife, Rebekah, once lived "at 166 2nd Avenue [in New York City] in an apartment smaller than this office," he told Business Insider's Alyson Shontell and Rich Feloni in a recent interview.

Today, a studio apartment in the East Village building is renting for $3,098, and the median monthly rent in the neighborhood is $3,150.

Here's a look inside the New York building where Neumann and his wife lived before they were billionaires.

SEE ALSO: How WeWork's CEO manages his ego after going from broke to a billionaire in under 10 years

DON'T MISS: WeWork's CEO explains why he thinks his $47 billion company is recession-proof and how he keeps his ego in check as a young billionaire

WeWork CEO Adam Neumann's coworking company is worth $47 billion and filed to go public in December 2018.

The Israeli-born entrepreneur launched WeWork in 2010 with his wife, Rebekah, and his business partner Miguel McKelvey. Now, it's one of the most valuable companies in the world.

But not too long ago, Neumann was broke.



The WeWork CEO told Business Insider in a recent interview that he and his wife, Rebekah, at one point lived in a tiny apartment at 166 2nd Avenue in New York City.

Neumann didn't specify the year they lived there, but it was likely sometime after 2009, the year he met his wife.



The street level of the building is occupied by a liquor store and a Mediterranean restaurant and hookah lounge, according to Google Maps.

As of August 2018, scaffolding was erected on the front of the building.



The building sits right across the street from St. Mark's Church-In-The-Bowery in Manhattan's East Village, a neighborhood where today's median monthly rent is $3,150.

That's lower than the median rent in Manhattan as a whole, which is $3,325, according to StreetEasy.

In 2010, the East Village's median rental price was about $2,600, as compared to Manhattan's $2,880 at the time.



166 2nd Avenue is a 15-story, pre-war building built in 1929.

It comes with a 24-hour doorman and laundry in the basement, according to the listing.



The only rental currently available in the building is a studio apartment for $3,098.

Other studios in the building recently rented for between $2,725 and $3,150, while one-bedrooms have rented for between $4,550 and $4,695, according to StreetEasy.



The studio currently available in the building comes with stainless steel appliances in the kitchen, including a dishwasher.

It's one of 159 units in the building.



The listing describes the apartment as "a perfect mix between elegance and location in Prime East Village."

The apartment is listed with Thomas Perry and Elsa Duarte of Citi Habitats.



Today, Neumann's real-estate holdings are much costlier than a $3,098 studio.

The WeWork CEO bought a Greenwich Village townhouse for $10.5 million in 2014, according to Bisnow. And in 2017, he spent $35 million on property on Gramercy Park, The Real Deal reported.

He and his wife also reportedly own homes in Westchester County and the Hamptons.



The 10 best major airports in the world

Sat, 05/18/2019 - 9:38am

  • The air-travel website AirHelp has released a ranking of 132 major airports across the world.
  • The airports were evaluated on criteria like customer service, cleanliness, on-time performance, and the food and shopping options available to travelers.
  • AirHelp selected airports that are the "best known and most used" for its rankings while leaving out airports for which data was unavailable.
  • Visit Business Insider's homepage for more stories.

The air-travel website AirHelp recently released a ranking of major airports around the world.

The list includes 132 airports evaluated on criteria like customer service, cleanliness, on-time performance, and the food and shopping options available to travelers. Airports were given an overall score on a 10-point scale, with on-time performance accounting for 60% of the score, service quality accounting for 20%, and food and shopping options representing 20%.

Read more: The 10 worst major airports in the world

"We chose the airports based on the best known and most used airports — but we exclude airports that we are unable to get data for," AirHelp said in an explanation of its methodology.

Europe and Asia each have four of the 10 airports that received the highest scores. Two airports from South America also made the top 10.

These are the world's 10 best airports, according to AirHelp.

SEE ALSO: Photos show an abandoned JFK airport terminal’s transformation from a futuristic, 1960s icon into a new luxury hotel that sits right on the runway

10. Viracopos/Campinas International Airport

Location: Campinas, Brazil

On-time performance score: 8.4

Service quality score: 8.2

Food and shops score: 7.9

Overall score: 8.25



9. Tenerife North Airport

Location: Tenerife, Spain

On-time performance score: 8.2

Service quality score: 8.4

Food and shops score: 8.2

Overall score: 8.26



8. Hyderabad Rajiv Gandhi International Airport

Location: Hyderabad, India

On-time performance score: 7.8

Service quality score: 9.0

Food and shops score: 8.8

Overall score: 8.27



7. Singapore Changi Airport

Location: Singapore

On-time performance score: 7.8

Service quality score: 9.2

Food and shops score: 8.7

Overall score: 8.27



6. Moscow Sheremetyevo International Airport

Location: Moscow, Russia

On-time performance score: 8.5

Service quality score: 8.1

Food and shops score: 8.0

Overall score: 8.35



5. Gdansk Lech Walesa Airport

Location: Gdansk, Poland

On-time performance score: 8.2

Service quality score: 8.7

Food and shops score: 8.5

Overall score: 8.35



4. Afonso Pena International Airport

Location: Curitiba, Brazil

On-time performance score: 8.4

Service quality score: 8.4

Food and shops score: 8.3

Overall score: 8.37



3. Athens International Airport

Location: Athens, Greece

On-time performance score: 8.1

Service quality score: 9.0

Food and shops score: 8.7

Overall score: 8.38



2. Tokyo International Airport

Location: Tokyo, Japan

On-time performance score: 8.4

Service quality score: 8.4

Food and shops score: 8.4

Overall score: 8.39



1. Hamad International Airport

Location: Doha, Qatar

On-time performance score: 8.3

Service quality score: 8.5

Food and shops score: 8.5

Overall score: 8.39



2 steps to take to protect your money from a recession, according to a financial expert and bestselling author

Sat, 05/18/2019 - 9:15am

  • Ramit Sethi is the author of the New York Times bestseller, "I Will Teach You To Be Rich."
  • If you're worried about a recession, there are only two things you need to do, according to Sethi: secure an emergency fund and ensure your investments are diversified across, and within, stocks and bonds.
  • Sethi recommends target date funds, which automatically choose a blend of diverse investments based on your age — the younger you are, the more aggressive the investments.
  • The "biggest danger" to a young person isn't a risky portfolio or potential market drop, he said, but avoiding investing all together.
  • Visit Business Insider's homepage for more stories.

It's near impossible to recession-proof your money, says financial expert Ramit Sethi.

"The market will go up, the market will go to down. Nobody knows. Nobody can tell you. It doesn't matter if they're on some TV show or anything. It's all bullsh--," Sethi, who recently released the second edition of his bestselling book "I Will Teach You To Be Rich," told Business Insider.

"A better question is, 'Can I have a diversified portfolio?' ... And do you have enough cash just in an emergency fund in case there was something bad that happened to you on a day-to-day living basis?" Sethi said.

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Regardless of the state of the markets, diversifying your investments across, and within, stocks and bonds and securing an emergency fund are two of the most important steps to take with your money, he said.

"That's the best thing you can do," he said. "What you shouldn't do is try to predict what's going to happen because you will almost always lose."

Sethi recommends keeping cash reserves equal to at least three months and, ideally, up to a year's worth of expenses to fall back on whenever it's needed. The best place to keep that emergency fund, rainy day fund, "oh f---" fund, or whatever you call it, is usually in a high-interest bearing account, like a high-yield savings or money-market account, where it remains within arm's reach but continues to grow while you're not using it.

As for investing, two things are crucial to ensure your money remains as safe as possible during market chaos: diversification and asset allocation.

"Investing in only one category is dangerous over the long term. This is where the all-important concept of asset allocation comes into play," Sethi wrote in his book. "Remember it like this: Diversification is D for going deep into a category (for example, buying different types of stocks: large-cap, small-cap, international, and so on), and asset allocation is A for going across all categories (for example, stocks and bonds)."

Asset allocation could make a difference of hundreds of thousands of dollars over your lifetime, he continued. 

"In other words, by diversifying your investments across different asset classes (like stocks and bonds, or better yet, stock funds and bond funds), you can control the risk in your portfolio — and therefore, control how much money, on average, you'll lose due to volatility," Sethi wrote.

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The easiest way for the average investor (read: someone who wants solid returns with minimal work) to achieve proper asset allocation is through a target date fund, according to Sethi. These "funds of funds" automatically choose a blend of investments based on your age — the younger you are, the riskier the investments (more stocks). As you approach retirement age, they become more conservative (less stocks).

Target date funds are generally low-cost and tax efficient, too, Sethi said, but you'll typically need at least $100 to $1,000 to get started. At the end of the day, the "biggest danger" to a young person isn't a risky portfolio or potential market drop, he said, but avoiding investing all together.

Need a better place to keep your cash before you start investing? Consider these offers from our partners:

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17 real-estate agents reveal the worst parts of their jobs, from the lack of steady income to being on call 24/7

Sat, 05/18/2019 - 9:05am

Many real-estate agents may love their jobs, but in any career, there are certain parts that are less than ideal.

Business Insider asked real-estate agents around the country about what it's really like working in their industry, including the worst parts of their jobs.

Several agents said managing clients' unrealistic expectations was the worst part, while others mentioned dealing with the frustration of getting "ghosted" by clients and having to be available 24/7.

Here are 13 of the worst things about working in real estate, according to 17 agents.

SEE ALSO: 13 easy things you can do to increase the value of your home, according to real-estate agents

DON'T MISS: 10 things real-estate agents wish they could tell you — but won't

1. Clients with unrealistic expectations

Eric Goldie, an agent at Compass who sells $1 million to $5 million homes in New York City, said the worst part of his job is dealing with clients with unrealistic expectations.

"50% of my job is managing expectations," Goldie said. "When a client wants a two bed/two bath for under $2,000,000 downtown, it's not fun breaking the news to them that they are actually in a market for a 1 bed/1 bath in their price point."



2. The endless emails and paperwork

Brian K. Lewis, an agent at Compass who sells $2 million to $10 million homes in New York City, said responding to emails has become one of the worst parts of his job.

"Although I pride myself in solid, good, and accurate communication, and although I love technology, emails have become very burdensome," Lewis told Business Insider. "I spend so much time on emails — time that would be better spent with people and the building of relationships — time that would be better spent marketing for my clients."

Gill Chowdhury of Warburg Realty said it's the paperwork that gets to him.

"I hate paperwork," Chowdhury said.



3. The inconsistent income

Noemi Bitterman of Warburg Realty, who deals with homes in Manhattan and Brooklyn with prices between $500,000 and $1.75 million, said the worst part of her job is the lack of a steady income.

"Some months are great and some are not, and the volatility can be hard to budget around," Bitterman said.



4. Mistrustful clients

An agent in Massachusetts who wished to remain anonymous said the worst part of her job is being mistrusted and dealing with misconceptions about what real-estate agents do.

"We honestly work very hard, it's a tough field ... so much of it is behind the scenes, and we take our oaths to our clients very seriously," she said. "We do a lot of work for free, yet people think we're just raking in the dough left and right."

Michael Bello of REAL New York, who does $5,000-per-month on average rentals in the city, said some clients have "negative pre-conceived notions that all brokers are 'sketchy' and [that] you're going to take advantage of them."



5. Getting ghosted by clients

Elana Delafraz of REAL New York (not pictured), who deals with rentals with $3,200 to $5,000 monthly rent, said the worst part of her job is getting ghosted.

The worst, she said, is "when you work really hard to find the perfect apartment for [a] client and then they ghost you like nothing ever happened."



6. Needing to be available at all times

"The worst part about my job is that it is hard to completely disconnect," Jared Barnett, a Compass agent who sells homes between $2 million and $5 million in New York City, told Business Insider.

"Selling real estate is complex, so if you want to be successful you have to work hard and be available at all times, whether in person, via email or on the phone," Barnett said. "Real-estate deals are very intricate and time-sensitive, so if you're unavailable to handle a problem that arises, it could cost you the deal."

Smitha Ramchandani, a broker-associate at SR Real Estate Group at Prominent Properties Sotheby's International Realty, who sells homes in New Jersey and California, said agents "have to be available during the evenings, weekends, holidays and on vacations. We have worked from the middle of the Serengeti (not kidding), Australia and New Zealand."



7. Letting down clients

"To me, [the worst part of my job] is letting my clients down in some way or form," Jason Tsalkas of Compass, who sells homes mainly in Brooklyn that cost between $650,000 and $2 million on average, told Business Insider. "I'll give you an example: I was working with a buyer to find their first home in Brooklyn. We looked at countless options and stumbled upon what I thought was the best one but he insisted we see some more and mentioned how it's his first home and he needed to see EVERYTHING."

Tsalkas said his mistake was not putting his foot down at the right moment and insisting it was the right fit.

"As you might imagine, we lost that one that I knew was the right fit and he realized it too," he said. "It crushed me to see him be disappointed. But it also served as an example; he trusted me from that point on, attentive to my every statement and opinion."



8. Being a 'parent' to clients

Clients won't always accept that a real-estate agent might know best, Marilyn Blume of Warburg Realty, who sells $2 million to $3 million homes in New York City, told Business Insider. 

"It's like being a parent, knowing a great property (or buyer) that is the right fit, but my client may get dissuaded by an insignificant factor," Blume said.

"For example, sometimes the first property you take your buyer to see is the best and they need to act swiftly, but they are not convinced as they need to see more," she said. "Or if you get a competitive offer for your client's property when it just hits the market they may say, well it only just came on the market and already look at this fabulous offer! Let's see what else we get, but the first offer had the best terms."



9. Having to rely on other people

Scot Dalbery from REAL New York, who deals with rental properties in New York City that are $4,000 a month on average, said the reliance on other people is difficult to deal with as a real-estate agent.

"Whether it be having to get keys from someone, have someone meet you to buzz you into an apartment, clients not showing up to appointments — as someone who is extremely diligent about my schedule, somebody unexpectedly not following through can really impact your day and cause great frustration," Dalbery said.



10. Dealing with New York City co-op boards

Spencer Cutler of Corcoran, who sells homes with an average price of $6 million, says the worst part of his job has nothing to do with clients, but rather dealing with co-op boards.

"In New York City, co-ops can require an enormous amount of paperwork which has to be meticulously put together to present the buyer in the best light possible," Cutler said. "In some cases, a buyer is rejected by the board (without any reason given) and the process starts back at square one."



11. Working around the clock

Several agents said the worst part of their job is that it never stops.

Adam Feinberg of Anchor Associates, who sells homes in New York City with an average price of $725,000, said the worst part of his job is "working around the clock — 24/7."

Greg Cooper, a broker at Kuper Sotheby's International Realty in Austin, Texas, who sells homes between $300,000 and $8 million, described it as "the treadmill that we are always having to run on. You are only as good as the last month," he said.



12. Dealing with rude people

"You try not to take it personally and some people are just mean," Butch Haze, a Compass agent who sells homes between $3 million and $10 million in the San Francisco area, said. "It is an emotional process so you try to give them a pass but some people are just not good people. I try to run from those situations. Life is too short."



13. Keeping their cars shiny

Robin Kencel of The Robin Kencel Group at Compass in Connecticut, who sells homes between $500,000 and $28 million, said one of her biggest job pet peeves is keeping her car looking clean.

"Keeping my car shiny on the outside — I'm always battling the weather and season," Kencel said. "Take this season: I have it washed at 10 a.m. and by 3 p.m. the pollen has dusted it."



I tried Barry’s Bootcamp, the intense fitness class that's become a hub of VC networking and tech deals. I walked out with a lot of sweat but no funding.

Sat, 05/18/2019 - 9:00am

Lee Edwards, a partner at early-stage venture firm Root Ventures, tweeted Thursday "The 3 B's of venture deals: Barry's, The Battery, and Burning Man."

The mockery was swift, but according to the replies to Edwards' tweet, there was a grain of truth to the first B, which refers to Barry's Bootcamp.

The intense bootcamp-style fitness program was started in Los Angeles in 1998 by fitness trainer Barry Jay, according to the studio's website, because Jay wanted an all-in-one workout that included cardio and weight lifting. Now, Barry's is available in 17 cities across 10 states plus Washington, D.C. The studio also has 10 international locations from Dubai to Stockholm to Melbourne, and has commanded a global following as one of the toughest workouts around.

Barry's studios are also known for the exorbitant cost of classes and branded camouflage gear, its club-like atmosphere, and instructors whose foul-mouthed commands would make a Marine blush.

On its face, Barry's Bootcamp is the Patagonia vest of workouts: it doesn't make a ton of sense to those deemed "outsiders," but for those in the know it's a symbol of rugged toughness and status.

Scroll through Instagram's various Barry's geotags and hashtags and you'll notice that in addition to the expected "fit-fluencer" posts, the page is dotted with tech founders and their teams and other Bay Area notables.

"Data has shown that Founders that opt for double floor tend to focus on short term exits vs. longer term growth, and investors come to take notice" one startup exec joked to Business Insider, referring to the famous "double floor" strength routine at Barry's. 

"Furthermore, investors go there looking for signal in the noise of treadmill speed. Early indications show that there is an inverse relationship between treadmill speed and company cash runway," the exec said.

Members of the cult of Barry like to be uncomfortable and to reward themselves with niceties not available at an ordinary CrossFit gym. After a 50-minute burst of activity, many bootcampers report to the "Fuel Bar" for one of the famous $10 protein shakes.

It's an intense scene that you won't forget

"Exercising at Barry's is very SF - it's super intense and you have a love / hate relationship with it since it's exhausting, but it brings you to a better state and energizes you," said Masha Drokova, founder and general partner at Day One Ventures.

Drokova however prefers something more calm to establish a rapport with founders she works with.

"I haven't taken any meetings at Barry's but I've on occasion brought founders I work with to do yoga with me at Love Story Yoga," she told Business Insider. "It's so fantastic for the body and to clear your mind, and this shared experience brings you closer together since you see each other in vulnerable sweaty environment."

One famous Barry's disciple is Theranos founder Elizabeth Holmes, who was spotted working out at San Francisco Barry's the morning before an Aprile court appearance.

Multiple sources suggested to Business Insider that Keith Rabois, an early PayPal executive who is now a general partner at VC firm Founders Fund, was the inspiration for Edwards' tweet about Barry's importance in the venture scene. When reached for comment, Rabois responded to Business Insider that "this is a quite ludicrous idea for a post," though he declined to comment on Barry's. 

I had to see just how ludicrous Barry's was for myself. So I suited up with San Francisco's finest for Barry's signature Full Body workout, and left with less funding and self-doubt than I started with. Here's what it was like:

SEE ALSO: I tried Liquid Death, the water for punk rockers that just raised $1.6 million from Twitter's cofounder and other tech stars — and it just tasted like water

Unlike most gyms, Barry's does not offer memberships. You can buy a one day pass for $35, or buy a pack of multiple passes.

When I walked in at the ungodly hour of 6 a.m., the front desk attendants were unnaturally peppy and explained how a treadmill worked since I assume I look like I’ve never stepped foot in a gym before today.

You can choose whether you want to start on the treadmill or on the floor with weights. The instructor cues both at the same time and participants switch between sections throughout the class. I started the class on the treadmill because a friend told me it’s better to just get it over with. We are no longer friends.

The front desk offered ear plugs in a tasteful glass jar, which I pass up because the last time I wore ear plugs I was 7 years old at a demolition derby. I wrongly assumed the music for a 6 a.m. workout class would not reach race car-level decibels.

The instructor, who I think might have taken the ‘bootcamp’ label a little too seriously, advised our class to grab medium to heavy dumbbells, which come out to 10-pound to 20-pound weights for women. I went for 12-pounders and was proud of my slight athletic superiority over the minimum requirement.

The Red Room is named such because of the dark red lights that are the only illumination in the sweat room. That is, unless your instructor wants to quickly flash regular white lights to simulate a strobe light while you’re doing bicep curls. Seeing yourself in fluorescent lights mid-workout will easily humble even the buffest investor.

After 60 minutes, I was honestly surprised that I had survived. I wasn’t close to crushing it, as my instructor so kindly put it as he knuckle-bumped me on the way out, but the after-workout glow had me feeling like I could walk into a conference room and pitch even the most stone-faced investors.

5 questions every US tech startup founder needs to ask before taking money from a foreign investor

Sat, 05/18/2019 - 8:45am

  • From Japan's SoftBank to the Australian sovereign wealth fund, foreign money is pouring into Silicon Valley startups.
  • While it may be tempting for founders to take large checks from generous investors, attorney Doreen Edelman said that US companies need to consider the risks they take when accepting foreign investments.
  • Companies in industries like artificial intelligence, the Internet of Things, and robotics may see their foreign investments rejected by the US government on the grounds of national security.
  • While it's possible to get some investments through, Edelman said, the more access and control an investor has, the more time, paperwork and money it will take to get approved.
  • Read more on the Business Insider homepage.

Uber took a $3.5 billion investment from the Saudi Public Investment Fund in 2016, and gave a board seat to its managing director.

Databricks took $33.24 million in 2015 in a round with participation from Future Fund, the Australian sovereign wealth fund.

And Zumper took $45.65 million in a 2018 round led by Axel Springer, the German publishing giant (which also happens to own Business Insider).

Yes, the early days of Silicon Valley were so geographically constricted that many of the most high-profile investments were made by people who worked near each other on the legendary Sand Hill Road. But today, the startup investment ecosystem is global, with large checks being written by foreign allies and adversaries alike.

While investors are eager to open their wallets, taking a foreign investment isn't as simple as cashing a check, said Doreen Edelman, head of Lowenstein Sandler's Global Trade & Policy Group.

As US startup founders consider to whom they want to sell equity, they must also consider a host of legal issues that could come up with foreign investors, she said.

Depending on the circumstances, investments from foreign investors could create delays, extra paperwork, and result in costly fees. In the most extreme cases, the investment may be blocked entirely. Even if the investment has been completed, though, the US government may force a divestiture afterwards.

Sanctions and tariffs can also create problems for companies down the road.

Before any of that happens, these are the five questions Edelman says every tech founder needs to ask themselves when considering a foreign investment. 

SEE ALSO: PayPal already lost $37 million on the Uber investment it just made as part of the IPO

What's the industry?

If you're a tech company working on artificial intelligence, robotics, the Internet of Things, or personal data, your foreign investment could be blocked on grounds of national security, Edelman said. 

There are 27 different industries under the Department of the Treasury's Foreign Investment Risk Review Modernization Act of 2018, known as the FIRRMA pilot program, which are required to file with CFIUS ahead of a foreign investment.

Companies outside of those industries can voluntarily file with CFIUS as well just to make sure everything is in good standing.

In theory, regulations against foreign investments are designed to prevent foreign governments from getting access to technology or intellectual property that could harm US national security. You probably don't want a foreign government to have access to the software used by the National Security Agency, for example. 

But the definition of "national security" is up to a continuous, fluctuating interpretation.

Traditionally such laws only impacted technologies in the defense sector. But today the US government takes a broader scope, Edelman said.

"It could be anything, if you look at it through the lens of, what could an anti-US government or group do with it?" she said. 



Could that change in the future?

Whether or not a technology is used by the defense sector today, Edelman said, it's important that founders consider whether they could eventually grow into the niche.

"Could you be in the defense sector? Be aware of what that will mean going forward," she said. "To some companies, it just means we have to plan ahead, just like any other government filings. We may have to make additional filings. And that just takes time and money."

Under certain circumstance, she said, the government could force the foreign investor to divest from the startup, or the company may be forced to avoid certain natural growth opportunities involving their product development, so as to not rock the boat.

"If Chinese money is going to invest in a potential defense product, even a commercial product that may work in the defense sector in the future, you need to be prepared that it's going to affect what you can do down the road," Edelman said, adding that the same concern applies to investors from other countries.

"You're going to be limited because the US government is not going to allow you to have that technology or those patents or that software that can be contracted away to the Chinese, or just for the Chinese to have access to that technology," she said.



Who is the investor?

While CFIUS has more-or-less put a pause on all acquisitions and investments between the US and China, founders need to pay attention to foreign investors whether they are based in a country that is a friend or a foe to the US.

"It can be Canada. It can be Israel. It can be Germany," said Edelman.

Ultimately, whether or not an investment is an issue will come down to the specifics of the investment, Edelman added. 

If Mubadala, a state-owned investment firm in the United Arab Emirates, was a limited partner in a funding round without any control over the company, it would most likely not cause a stir.

"If it's truly an LP just investing for money," she said, "it can invest in whatever it wants."

That said, founders will want to be mindful of the shifting geopolitical landscape since the Trump Administration mixes politics and trade differently than in the past, she said.

"This president is using the tools in his tool box differently," Edelman said.

A Japanese company that does business with North Korea or Iran will be viewed differently than a Japanese company that doesn't, for example.

"It's very possible that the political situation would allow this administration to use these trade tools to either punish or enforce the political positions that the president is taking. That's why 'national security' is flexible in how the government defines these terms," said Edelman.



Will they have access to the "secret sauce?"

Another question founders should ask before taking a foreign investment is how much information they would be required to share with the investor. 

Foreign access to "any control technology or the secret sauce or the IP or personal data" could all create issues for the company, Edelman said.

Early stage investors are often deeply involved in the business process, and access intellectual property and customer data as part of day-to-day business. The US government sometimes requires permits to share technology between countries.

Companies in industries highlighted by FIRRMA are required to file with CFIUS if investors will have access to their technology.

Founders must also consider whether there are any export controls on their product.

While a tech company may not necessarily export products via ships at sea, some cloud based software is still controlled for export and may face restrictions on who can use it or buy it abroad.

"A tech company that doesn't export but is going to take foreign investment needs to understand if any of its product is controlled for export," Edelman said.



Will they have a board seat?

Giving up a board seat to a foreign investor further complicates the process. 

Japan's SoftBank has made tons of investments in US tech startups, but even it failed to get approval for two seats on Uber's board.

"If you want to give them the board seat, you need to know that would require you to go through the CIFIUS process," Edelman said regarding companies under the FIRRMA pilot program guidelines.

Even companies which are not mandated to file may be inclined to file because of the board seat, she said.

 



Evercore is going after JPMorgan and Goldman; WeWork's CEO explains why he thinks his $47 billion company is recession-proof

Sat, 05/18/2019 - 8:21am

 

Hey, readers!

It was a big news week in the finance world. Both Goldman Sachs and JPMorgan announced their biggest-ever acquisitions since the financial crisis, trade talks continued, and even Bitcoin rebounded.

WeWork said on Wednesday that it's growing incredibly fast, but is still losing money. The company's revenue more than doubled in the first quarter to $728 million as it expanded in international markets such as China, but still posted a net loss of $264 million.

Investors are watching the coworking company especially closely as it inches closer to an initial public offering.

If you're new to the Wall Street Insider newsletter, you can sign up here.

While there are some signs that investors are becoming more skeptical of unicorn tech companies that have grown super fast but still aren't profitable (see Uber's IPO struggle), WeWork brushed off those concerns, saying its losses should be treated more as investments.

Not everyone's convinced. While WeWork CEO Adam Neuman told Business Insider that his company is recession-proof because its space is cheaper than traditional offices, some analysts said they're still worried about the 9-year-old company's future, largely because it hasn't seen a full market downturn.

"Do they lose more tenants than a regular office building in a recession? My gut tells me they'd probably lose a few more," one analyst told us.

Questions around the company's creative accounting practices haven't gone away either, with its use of a made-up metric called "community-adjusted EBITDA" to measure profitability.

Earnings before interest, taxes, depreciation, and amortization exclude those expenses and can help investors get a clearer sense of how a company is doing. But critics have pointed out that WeWork's version appears to strip out some operating costs that would normally be included.

"For those with long memories this is surely be reminiscent of that series of spurious valuation metric such as price/eyeballs ratios that we saw at the peak of the 2000 tech bubble," wrote Albert Edwards, the cohead of global strategy at Société Générale, in a client note.

Love it or hate it, everyone seems to have an opinion on WeWork, and I'm interested in hearing yours as we double down on our coverage of the company. Please email me at ooran@businessinsider.com if you have a story to share.

One more thing! Business Insider is hosting a (free!) finance event tied to our "100 people transforming the world of business" list, which ran in April. The event is called IGNITION: Transforming Finance, and it will be held on June 10, 8-9:30 a.m., at the New York Stock Exchange. It'll feature a number of speakers from our list, including Omar Ismail, the head of consumer digital finance in the Americas for Goldman's Marcus business, and Huy Richards, the head of digital investment banking at JPMorgan.

Please reach out to me if you'd like an invite or want more information.

I'll be off next week for the holiday weekend.

See you in June!

Olivia

Evercore has torched competitors with the best returns on Wall Street over the past 10 years. Now it's setting its sights on Goldman Sachs and JPMorgan.

Since Ralph Schlosstein joined Evercore about 10 years ago, the independent investment bank has produced a nearly 600% total return, and grown its advisory revenue to $1.74 billion from $180 million.

No publicly traded competitor — bulge bracket or boutique — beats Evercore's performance over the past decade.

Part of the firm's success is explained by what it says is a persistent and uncompromising approach to recruiting: It'll hire only those it considers the best senior bankers, even if the courtship lasts years.

But can an independent investment bank ever truly contend with the industry titans Goldman Sachs, JPMorgan, and Morgan Stanley?

READ MORE HERE >>

Goldman Sachs execs are opening up about their plans for Marcus, and they think it can do to banking what iTunes did to the music industry.

Goldman Sachs' consumer-finance business may be only three years old, but the bank's execs already have ambitions of having as big of an influence as two other giants in their respective industries: Amazon and Apple.

That's the message to come out of three recent interviews Goldman execs have given. In a video posted this week on Goldman's website, Harit Talwar, Goldman Sachs' global head of consumer, said the firm was looking directly to Seattle and Cupertino, California, the homes of the two tech behemoths, for inspiration in growing its consumer banking footprint.

READ MORE HERE >>

WeWork's CEO explains why he thinks his $47 billion company is recession-proof, and how he keeps his ego in check as a young billionaire.

Adam Neumann is the cofounder and CEO of WeWork, the global coworking-space company valued at $47 billion.

WeWork, under its umbrella The We Company, filed for an initial public offering in December. Analysts are concerned with last year's $1.8 billion in revenue compared with its $1.9 billion in losses.

Neumann told Business Insider that WeWork was capable of being profitable but had chosen to invest in rapid global expansion. He said that the company was well positioned in case of an economic downturn in the US and that he would no longer personally lease properties to WeWork.

READ MORE HERE >>

The next big venture-capital gold rush may be in Opportunity Zones, dubbed the "emerging markets of the United States."

Venture-capital firms are starting to launch and raise funds to invest in companies located in designated Opportunity Zones, where investors can get protection from certain taxes.

So far, most of the money pouring into Opportunity Zones has been from funds looking to purchase real estate, but recent regulatory guidance from the Internal Revenue Service says it's also possible to invest in businesses.

The Opportunity Zone tax break, pushed through Congress by Sens. Corey Booker and Tim Scott, defers taxes on the sale of a stock, bond, property, or business if an investor places the money into a fund that invests in a low-income area.

VC funds that have been set up are targeting companies in Scranton, Pennsylvania; Brooklyn, New York; Newark, New Jersey; and Provo, Utah.

READ MORE HERE >>

Why Goldman Sachs just did its biggest deal in nearly 20 years as part of a pivot to less wealthy clients.

David Solomon is wasting little time. The Goldman Sachs CEO, an investment banker who took over from Lloyd Blankfein last October, signed the bank's largest deal in more than 15 years on Thursday, announcing the $750 million purchase of the United Capital wealth-management firm.

The transaction is intended to fill in Goldman's wealth offering and bring in more recurring revenue to a firm that still gets more than 60% of its top line from trading, and private investing activities.

More broadly, the deal is a sign that Solomon and his management team of CFO Stephen Scherr and president John Waldron recognize that investors haven't given the firm credit for maintaining some of the highest returns in the industry, according to analysts.

READ MORE HERE >>

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Here's how bitcoin’s latest surge could be indirectly signaling that recession fears are hitting a fever pitch

Sat, 05/18/2019 - 6:05am

  • Bitcoin recently surged above $8,000 to its highest level in almost a year. 
  • It's no coincidence that this occurred as global investors worried about a recession, according to Michael Hartnett, the chief investment strategist at Bank of America Merrill Lynch.
  • Visit Business Insider's homepage for more stories.

What does bitcoin have to do with the next recession? 

Michael Hartnett, the chief investment strategist at Bank of America Merrill Lynch, sees at least one link that's worth keeping in mind.

Its genesis is a trend that has dogged investors since the end of the 2008 financial crisis: the hunt for yield. 

After the last financial crisis, policymakers around the world pumped stimulus into their economies, including massive central-bank purchases of government debt. Those purchases helped keep interest rates low enough to encourage borrowing, spending, and — ultimately — economic recovery.

The flipside of this stimulus for investors was that yields on bonds they bought for safe and steady returns gradually became unappealing. And by mid-2014, bond yields in some major countries were literally falling through the floor and turning negative

Yields remain near historic lows, and the latest leg down is due to fears that the global economic cycle is about to worsen. Bond prices in the US have been in an uptrend (and yields have fallen) since the fourth quarter as recession concerns have grown.

The recent trade-war escalation and the acute slowdown in the Euro economy have only exacerbated these fears and suppressed yields further. Germany's 10-year bund — the benchmark debt instrument for the region — stumbled back into negative territory in March for the first time since 2016. And in the US, the 10-year yield has fallen below the 3-year yield twice this year, triggering one of the market's most reliable recession signals

Read more: 'The Ice Age will soon be upon us': One market bear explains why the next recession will do the unthinkable to US markets

Amid lackluster yields from the safest assets in the world, investors have piled into a "greed trade" that includes $127 billion in corporate and emerging-market debt, Hartnett said in a recent note to clients, citing data compiled by Bank of America Merrill Lynch. 

That's where bitcoin comes into the picture. Hartnett doesn't explicitly say bitcoin rose because of the so-called greed trade. But he finds it noteworthy that bitcoin's latest rally occurred as the world's negative-yielding assets crossed $12 trillion in value for the first time since 2016.

Bitcoin's surge above $8,000 "confirms belief in world of negatively-yielding debt," Hartnett said.

Make no mistake: This isn't Hartnett's way of outing himself as a bitcoin evangelist. In fact, he likened its jaw-dropping run in 2017 to history's greatest bubbles, including the infamous tulip mania of the 17th century. Right before bitcoin crashed in 2018, a survey conducted by his team showed that large fund managers thought betting on bitcoin was the most crowded trade in the world. 

Despite his measured views on the cryptocurrency, Hartnett is not alone in suggesting that investors find bitcoin more attractive during periods of uncertainty. Bitcoin's wild price swings and unique qualities make it uncorrelated to major asset classes. And broadly speaking, cryptocurrencies represent a loss of faith in central banks and established financial systems. 

However, this doesn't mean investors should go to the extreme of adopting bitcoin as a recession hedge.

"We have long been skeptical of cryptocurrencies' value in most environments other than a dystopian one characterized by a loss of faith in all major reserve assets (dollar, euro, yen, gold) and in the payments system," John Normand, JPMorgan's head of cross-asset fundamental strategy, said in a research note earlier this year.  

He continued: "Even in extreme scenarios such as a recession or financial crises, there are more liquid and less-complicated instruments for transacting, investing and hedging."

But with yields on so many of these assets still historically low — reflecting recession fears — it's not far fetched to note that bitcoin has benefited from the fear of missing out on higher returns. Or as Hartnett put it, the late-cycle "greed trade."

SEE ALSO: WeWork's latest earnings report shows it's still using a controversial accounting method that reminds experts of tech-bubble shenanigans

Join the conversation about this story »

NOW WATCH: Tesla has a mini Model S for kids that costs $600, and this family bought it to teach their child about driving electric

WeWork's CEO says his $47 billion company is recession-proof. Industry watchers aren't convinced.

Sat, 05/18/2019 - 1:24am

  • WeWork reported its first-quarter earnings on Wednesday, saying it more than doubled its revenue and memberships.
  • Despite the positive numbers, analysts said they're not convinced the company would do well in an economic downturn, as it's never gone through a market correction.
  • WeWork's CEO told Business Insider last week that a downturn could actually help the company.
  • Visit Business Insider's homepage for more stories.

WeWork showed lofty growth numbers in the first quarter, with revenue and memberships more than doubling from the same quarter last year, but that's not enough for some analysts.

Despite the positive numbers, analysts told Business Insider they're still worried about the 9-year-old company's future, largely because WeWork hasn't seen a full market downturn. Rett Wallace, the CEO of the New York-based research firm Triton, says it is even harder to understand how WeWork would fare in a downcycle since the company doesn't report the percentage of its desks that are occupied.

WeWork's occupancy rate for the first quarter stayed about the same as it was a year ago, about 90% for locations open at least 18 months, a source with knowledge of financials said. The publicly traded workspace provider IWG had about 74% occupancy across its similarly mature locations last year, according to its annual report.

Wallace said a healthier number for WeWork would be locations with waiting lists, rather than with 10% vacancy. He compared the company with Uber, which, in a downturn, would see expenses decrease almost in tandem with revenue, since the car company has comparatively little physical infrastructure and long-term liabilities.

"For WeWork, if they have an occupancy problem, it'll take them months or years to unwind the expense equation," he said. "If you get on the wrong side of it, it could get so much uglier than these asset-light businesses."

WeWork's cofounder and CEO, Adam Neumann, told Business Insider last week that a downturn could actually benefit the business. He highlighted that WeWork was 50% to 70% cheaper than other office buildings and benefited from US accounting changes on how businesses allocate money for leases. WeWork also offers "flexibility and mobility," which helps in a slowing market, and because half of its members do business with one another, they could buoy one another.

Neumann also pointed to local downturns in Buenos Aires, Argentina; São Paulo, Brazil; China; and the UK, all of which saw memberships growing faster than ever and lower construction costs when the market went down. WeWork is also expanding its work with major companies, which have longer leases and could presumably ride out a downcycle better than smaller clients.

WeWork now has $3.4 billion in multiyear agreements with big companies, a major revenue driver as it moves away from overseeing coworking spaces for small startups and into managing office space for big companies. Chris Lane, a Hong Kong-based analyst with Bernstein, said that growing exposure to enterprise was "a healthy sign."

"My basic view is that the business model is 'sound' and that much of the losses are driven by expansion," Lane told Business Insider. "However, I still struggle to see how they will justify a valuation anywhere near what SoftBank was reported to have paid in the last funding round."

See more: WeWork's latest earnings report shows it's still using a controversial accounting method that reminds experts of tech-bubble shenanigans

Barry Oxford, a senior research analyst at DA Davidson who covers real estate, said he's concerned about a downturn that's longer than a "short, mild recession."

"Do they lose more tenants than a regular office building in a recession? My gut tells me they'd probably lose a few more," he said.

That doesn't seem to bother the big-office real-estate investment trusts that Oxford covers, many of which, including Boston Properties, have WeWork as a tenant.

"From a real estate and landlord perspective, I can say there's not a lot of pushback from allowing them in buildings," he said.

Another analyst, Andrew Shepherd-Barron at Peel Hunt, has followed IWG — formerly known as Regus — for 17 years. He said WeWork had built up brand loyalty that shouldn't be discounted but was unlikely to carry the company through a recession.

"Just flicking through Q1 numbers, you've got to say they're growing rapidly," he said. "Then again, if you throw enough money at a business, that tends to happen. But if there's any hiccup in the market — watch out."

Are you a WeWork employee with a story to share? Contact this reporter via encrypted messaging app Signal at +1 (646) 768-1627 using a non-work phone, email atmmorris@businessinsider.com, or Twitter DM at @MeghanEMorris. (PR pitches by email only, please.) You can also contact Business Insider securely via SecureDrop.

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NOW WATCH: The legendary economist who predicted the housing crisis says the US will win the trade war

The cost of Trump's bailout program for farmers is poised to more than double

Fri, 05/17/2019 - 6:06pm

  • Bailout spending on farmers is poised to more than double as the US-China trade war drags on.
  • With a second bailout program on deck, the total price tag of tariff aid so far could jump past $30 billion. 
  • But farmers have grown frustrated at the prospect of relying on subsidies. 

President Donald Trump is trying to save farmers from the trade disputes he started last year. But even with bailout spending poised to more than double, many have grown frustrated at the prospect of relying on government aid. 

After trade negotiations between Washington and Beijing fell apart last week, the Trump administration said it was expediting plans to offer farmers a second round of aid. Both sides vowed to raise tariffs, which have sent American agricultural prices and exports sharply lower. 

While details on the plan haven't yet been made available, Agriculture Secretary Sonny Perdue said this week it was initially estimated to total between $15 billion and $20 billion. Including aid offered last year, that would bring the total amount of the bailout package to around $30 billion. 

Perdue said the package would include some direct payments to farmers, much like the Market Facilitation Program rolled out in 2018. Trump has suggested facilitating large-scale government purchases of American agricultural goods, a principal generally rejected by the Republican party and farmers who would prefer a free market.

"We wouldn't need the payment if they would get to work and finalize the trade deal with China," said Dave Walton, a soybean grower in Wilton, Iowa. "Frustration out here is growing by the day."

"It's ugly out here," he added. "There are farms that will not be in business next year because of this."

Farmers fear that prolonged tensions could permanently damage ties with customers from China. To avoid a 25% tax on shipments from American soybean growers, for example, the Chinese have turned to other major producers like Brazil.

"Our competitive advantage has always been we are a reliable source of product," said Brent Bible, a soybean and corn farmer in Lafayette, Indiana. "This has taken that away."

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Cofounders Jen Rubio and Steph Korey built online luggage retailer Away into a $1.4 billion company in just 3 years. Next up, it wants to be a 'travel brand.'

Fri, 05/17/2019 - 5:24pm

When Jen Rubio and Steph Korey started the online luggage retailer Away in February 2016, they had modest ambitions. The pair developed a suitcase with a battery to charge mobile devices and launched a website to sell it.

Three years later, Away is valued at $1.4 billion, thanks to a $100 million funding round from Wellington Management Co. LLP, Baillie Gifford, Lone Pine Capital, and Global Founders Capital that was announced this week. Now Rubio, Away's president and chief brand officer, says that the company has loftier plans in mind. 

"When I look back on the early days, I think what fueled our passion and kept us going was the belief in what we were creating and how much potential we saw to transform the travel experience," Rubio told Business Insider. "We started with luggage, but our sights have always been set on much more. As the business scales, so will our ambitions."

Read more: As Airbnb and Instacart gear up for rumored IPOs, here are the VC firms that have made the most early investments in billion-dollar startups

This has already been a blockbuster year for female-founded startups like Away, which is the fifth women-led company to cross the $1 billion valuation threshold in 2019. 

Skin-care and makeup company Glossier was founded by Emily Weiss in 2014 and announced a $100 million funding round tied to a valuation above $1 billion in March. Jennifer Hyman's clothing-rental company Rent the Runway also reached the $1 billion valuation mark in March, according to a New York Times report. The developer startup Confluent and catering startup ezCater round out the list of female-founded companies that achieved unicorn status in 2019.

"It has definitely been a big year for women in business — if Steph and I can be a part of the case study that proves how valuable it can be to empower and invest in women, I'm all for it," Rubio told Business Insider. "I hope this is just the beginning for us, and for many other women and minorities who have been underestimated or overlooked."

The new injection of cash will allow the company to expand beyond suitcases into a larger "travel brand," Rubio said. The company is exploring new products in the apparel, wellness, and accessories spaces that can help simplify the often mundane travel experience.

"We're excited to figure out how else we can play a role in travelers' journeys, not just focusing on what you use to pack, but also what you might need to bring with you — this might include things like skincare and supplements, or thoughtful apparel for more comfortable travel," Rubio said.

SEE ALSO: Rent The Runway CEO throws serious shade at profitless tech behemoths: 'I haven't been given the permission or privilege to lose a billion every quarter'

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NOW WATCH: This startup turns 100 non-recyclable plastic bags into a high-end Bluetooth speaker

Hedge fund Marshall Wace is a secret winner in the Amazon-led $575 million funding round for food-delivery company Deliveroo

Fri, 05/17/2019 - 4:13pm

The London-based hedge fund Marshall Wace was one of the big winners following news that Amazon was leading a $575 million funding round of Deliveroo, a London-based food-delivery service.

The $39 billion hedge fund had the biggest short position in the Dutch Deliveroo competitor Takeaway.com, and the second-biggest short position in Just Eat, another food-delivery company based in London, according to the research firm Breakout Point. Both companies' stocks fell at least 4.5% on Friday on the news of Amazon's investment. 

The two bets by Marshall Wace totaled roughly $122 million, according to Breakout Point. The firm also has a $53 million short on a third Deliveroo competitor, the Berlin-based Delivery Hero. That company's stock price has gone up slightly since the news of the Amazon investment. 

Read more: Multi-billion-dollar hedge fund manager Daniel Sundheim is pumping up Netflix, but dismisses the Canadian pot industry

Marshall Wace, founded by the billionaires Paul Marshall Wace and Ian Wace more than 20 years ago, manages $39 billion and is partially owned by KKR. Other funds with notable shorts on Deliveroo competitors are AQR, which took a $136 million bet against Just Eat and Delivery Hero, and the Australian-based manager Platinum Investment Manager, which took an $87 million bet against Just Eat. 

AQR, Marshall Wace, Just Eat, and Takeaway.com declined to comment, while the other companies named did not immediately respond to requests for comment. 

Read more: A rising hedge fund star is shorting the Australian wine company that owns popular brands Beringer and 19 Crimes

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NOW WATCH: The legendary economist who predicted the housing crisis says the US will win the trade war

uBiome's founder repeatedly presented herself as years younger than she was, in the latest sign of trouble at the embattled $600 million poop-testing startup

Fri, 05/17/2019 - 4:03pm

  • The buzzy Silicon Valley startup uBiome, which was geared toward highlighting the importance of the microbiome for human health, is under federal investigation.
  • The FBI raided the company's San Francisco offices last month, reportedly in regard to issues with how it was billing customers.
  • Insiders previously said that, in their view, uBiome cut corners on its science in a quest for growth.
  • Now, additional reporting by Business Insider reveals that uBiome cofounder Jessica Richman misled reporters about her age several times, in an apparent effort to be included in articles showcasing young founders.
  • Richman and her cofounder, Zachary Apte, are quietly in a relationship, according to former employees, with one saying they were encouraged not to discuss the relationship publicly.
  • The company was found to have used stock photos for testimonials on its site, The Wall Street Journal reported.
  • Visit Business Insider's homepage for more stories.

On the heels of an FBI raid of its offices in San Francisco, the buzzy health startup uBiome is under investigation.

The company, which has raised $105 million and achieved a $600 million valuation, is reportedly being investigated for issues related to how it billed customers for its tests, which were geared toward highlighting the role the microbiome plays in human health.

uBiome portrayed its tests as free to patients and said insurance companies would foot the bill. In reality, customers were sometimes saddled with thousands of dollars of bills when their insurance declined to pay. Interviews that Business Insider previously conducted with several former uBiome employees suggested that the company may have cut corners on its science as well.

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.

Now, additional reporting by Business Insider reveals that uBiome's CEOs and cofounders, Jessica Richman and Zachary Apte, may have tried to conceal personal details, including their relationship and Richman's age. Richman and Apte were placed on leave from their co-CEO roles after the FBI raid.

Richman repeatedly presented herself as years younger than she was, in an apparent effort to be included in articles showcasing young founders.

Apte and Richman lived together in at least two states, according to public documents viewed by Business Insider. The two are in a romantic relationship, according to six former uBiome employees. The people asked not to be identified because they signed agreements not to reveal company information publicly.

One former employee said the relationship was widely known at uBiome but that employees were discouraged from discussing it.

"It was an open secret at the company," a former uBiome employee told Business Insider. "Everyone knew, but we weren't allowed to talk about it."

As for her age, voting records and a personal document seen by Business Insider show that Richman is 45.

In one instance in 2014, Richman told a Business Insider reporter that she was "under 30" but declined to provide her specific age. As a result, she was included in a list titled "The 30 most important women under 30 in tech."

She was 40 at the time.

The following year, when Richman was 41, she was included on a CNN list highlighting innovative companies led by founders under 40. A CNN spokesperson told Business Insider that Richman confirmed to a CNN reporter in an email that she was under 40.

In 2018, Richman told a different Business Insider reporter that she was "under 40" and again declined to give her age. It earned her a spot on another list: "Meet the 30 healthcare leaders under 40 who are using technology to shape the future of medicine." She was 44.

Richman and Apte did not respond to requests for comment.

To be sure, ageism is a recognized problem in society and in Silicon Valley's tech industry. Young founders can be more likely to get attention from venture capitalists in search of the next Mark Zuckerberg, who famously started Facebook from his Harvard dorm room.

Separately, The Wall Street Journal reported this week that uBiome was using stock photos to illustrate customer testimonials on its website. The company removed the testimonials from its site after questions from The Journal, the newspaper said.

Want to tell us about your experience with uBiome? Email the reporters on this story at ebrodwin@businessinsider.com or ecourt@businessinsider.com.

SEE ALSO: 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.

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NOW WATCH: There are 7.7 billion humans on Earth today. Here's what would actually happen if Thanos destroyed 50% of all life on the planet.

A Trump administration source poured cold water on a report that Derek Kan is being considered for the Fed board

Fri, 05/17/2019 - 3:34pm

  • A news report on Friday said the White House was thinking of nominating Derek Kan for one of the two open seats on the Board of Governors.
  • But Kan is not being seriously considered for a spot on the Federal Reserve board, according to a White House source familiar with the nomination process.

Department of Transportation Undersecretary Derek Kan is not being seriously considered for a spot on the Federal Reserve board, according to a Trump administration source familiar with the nomination process.

"Kan is not under consideration," the source told Business Insider on the condition of anonymity. 

News reports on Friday said the White House was thinking of nominating Kan for one of the two open seats on the Board of Governors.

Kan became an adviser to Elaine Chao, the federal transportation secretary, in 2017 after working as the general manager at the ride-hailing company Lyft. Previously, he served on the board of directors for Amtrak under President Barack Obama.  

Kan could not immediately be reached for comment. The Department of Transportation did not respond to an email inquiry.

Filling the open Board of Governors seats has been an uphill battle for Trump, whose previous two picks faced scrutiny from bipartisan economists and lawmakers.

In April, former pizza-chain executive Herman Cain withdrew his name from consideration after renewed concern over series of sexual-harassment accusations that surfaced during his failed presidential bid in 2012.

Stephen Moore, a conservative commentator and outspoken critic of the Fed, withdrew weeks later when key Republican lawmakers indicated they wouldn't support his nomination. Moore had made denigrating comments about women in past writings, saying they should not make as much money as men and there should only be attractive referees and sports reporters.

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NOW WATCH: This video shows the moment Sarah Sanders lied to a room full of reporters about FBI agents telling her they were happy Trump fired Comey

WeWork's CEO and CFO provide the math behind their belief that the $47 billion company won't collapse when a recession hits

Fri, 05/17/2019 - 3:14pm

  • Red flags are waving for analysts as WeWork prepares to go public.
  • The unprofitable company is burning cash, and real-estate companies typically don't do well during recessions.
  • But WeWork's CEO said his company "comes out much stronger" in a downturn.
  • His explanation leaves some questions. But we really won't know the true health of the company until we see its S-1 and a full-on recession challenges the business.
  • Visit Business Insider's homepage for more stories.

In December, WeWork filed for an initial public offering. The office-leasing company has risen from nothing to a $47 billion valuation in nine years.

Despite the hype and rapid growth, red flags are waving for analysts: 

  • The company is unprofitable and burning cash, which it calls "investments." The Wall Street Journal reported that WeWork spent $650 million in the first quarter of 2019 and cited analyst projections of $9 billion more being spent over the next year. While revenue doubled last year, WeWork's losses also more than doubled to $1.81 billion.
  • A downturn in the US and global economies seems imminent. Commercial real-estate companies usually struggle during recessions as companies reduce their head counts and have less need for office space.
  • WeWork owes $18 billion in rent. If tenants disappeared in a recession, WeWork would still be stuck paying without as much cash coming in.
  • 60% of WeWork's customers are non-enterprise clients, meaning they have less than 500 employees, according to CEO Adam Neumann. Small businesses don't fare well during downturns. They may have to save money by cutting staff, downsizing offices in favor of remote work, or even going bankrupt. That being said, WeWork's enterprise business is growing, and the company says its average stay is 14 months.

Another warning sign: WeWork has been crowing about a vanity metric it calls "community-adjusted EBIDTA." It says it has an annual community-adjusted EBITDA margin of 27%.

The company defines that as "Equal to Membership and Services Revenue, less Adjusted Rent, Tenancy Costs, and Adjusted Building and Community Operating Expenses."

In other words, it's profit before a whole lot of costs. WeWork hasn't publicly said what all those other costs amount to.

In interviews with Business Insider, WeWork CEO Adam Neumann and Artie Minson, the company's chief financial officer, said the company's high burn rate shouldn't be viewed the same way as other tech companies, such as Uber. It should be considered an investment, with returns that could be multiple times more than the initial amount spent.

"We do not lose money; we invest money in the future," Neumann said.

"We do not lose money; we invest money in the future." — Adam Neumann

"We're building a global physical platform. To build that, you have to build the infrastructure. It's very different from other companies who spend $1 billion and it's gone, or whatever discount it gave in the market. Our $1 billion, when it's gone, it's going to pay itself back this many times," he added.

To back it up, he whipped out this chart to show how a WeWork "investment" could grow over a 15-year horizon:

When asked what would happen if the economy crashed in the middle of the cycle above, Neumann outlined a rosy scenario.

First, he said there was already proof of WeWork surviving a recession. About 55% of WeWork's business is outside the US, including in markets such as China and Buenos Aires, Argentina, that have experienced downturns. He said the numbers in those markets speak for themselves. When asked for specific numbers, a WeWork spokesperson pointed to a 2018 fundraiser that was dedicated to growing WeWork China and said the company had 80 offices there.

Future cash flow, particularly from enterprise clients, is shaping up to be strong. The company has about $3.4 billion in a "committed backlog," which means signed deals for extended periods of time, that exceeds the company's total run-rate revenue of $3 billion, Minson told Business Insider.

Neumann went so far as to say that WeWork would not merely be strong if a recession were to hit. He said the company would actually "come out much stronger."

His key arguments:

  • WeWork offices, Neumann said, are 50 to 70% cheaper than the average office in its core markets (he did not explain how). A WeWork spokesperson said that this figure was based on third-party research commissioned by WeWork that looked at the one-time cost of WeWork versus all costs associated with an office move, including construction and supplies, in the US. 
  • Joining WeWork is a compelling proposition for CFOs, CEOs, and human-resources managers.
    • For CFOs, they suggest that a WeWork lease be classed as a "membership," like a gym pass. Typically, companies need to account for expensive leases as either assets or liabilities on balance sheets. This unusual "membership" strategy can remove leases from the balance sheet and tuck them into the income statement, where costs are paid off gradually in small installments. On the balance sheet, by contrast, liabilities have to be written up in total, all at once.
    • For CEOs and HR heads, employees seem to like being a part of WeWork's culture, which can help with retention.
  • WeWork seems to think it can catch businesses on the way up (when they're growing in a boom) and on the way down (when they need to move to smaller, cheaper offices). It offers flexibility and allows businesses to scale up or down the number of desks they purchase. 
  • During a recession, a lot of WeWork's operations become cheaper, from construction rates to lease negotiations with landlords. 

Here's Neumann's explanation in full:

Neumann: The last thing think I wish for is a downturn, but I will give you the math. Then, you decide if that's a benefit or not.

I know it's a fact that I'm 50% cheaper than the average [office] in New York City.

In other cities, I'm 60 or 70% cheaper. I'm half the cost. So if you're the CFO, that must be very attractive.

I'm not a new balance sheet. As of 2020, all leases need to be on a balance sheet. I'm a membership agreement and I'm off your balance sheet. That's very attractive.

For many CEOs, they feel that our space is better designed, has great energy, and gives them a lot of flexibility. They think that their employees like it more. So, CEO: Employees like it more. CFO: It's costing him or her half the amount. Head of HR: Higher retention.

On top of all of that, we can offer flexibility and mobility. These are all things that will work very well in a market that's slowing down. Point number one.

Point number two, and a very interesting one — 51% of our members do business with each other. For small businesses, the downturns end up being even tougher than for the larger businesses, who have a balance sheet. We're going to be able to offer a lot of internal business — that we already do — that will help them a lot.

Number three. Businesses are flexible. You want to get smaller; you want to get bigger. Some will want to get bigger in the downturn, some will get smaller — space is fixed. We give that flexibility.

Number four. As we speak, we're already in an experience with Buenos Aires after a downturn, São Paulo after a downturn, China, what people would consider 50% down, Brexit — every one of those markets I just said, memberships never grew faster [than] when the market went down.

And here's the good one: Cost of construction went down by 20 to 30%. That's huge for us. For the cost of leasing, either the lease itself went down 15 to 30% [or we got] access to management deals.

A management deal is when the landlord is willing to give us no lease, pay 100% for the construction, and share the upside with us. Get above-market returns. When there are no other tenants because the market is slower, everyone is rushing to give us that deal. More management deals, cheaper leases, and lower construction all work amazingly for us.

On top of that, because enterprise today is 40% of our business, an average stay at WeWork is north of 14 months. All those numbers that used to be in the past, of month-to-month, are just not our truth anymore.

So because of all of those reasons, I'm saying that we have proven in markets where it has occurred already. We're stronger while [a downturn] happens and come out much stronger.

Despite the red flags, WeWork's business has a ton of cash — $4 billion as of April with good access to $2 billion more — a ton of customers, and positive cashflow. When filed, the company's S-1 should be revealing.

And should the long-awaited downturn finally arrive, we'll know a lot more about the resiliency of WeWork's business.

Andrew Shepherd-Barron is an analyst at Peel Hunt who has followed the WeWork competitor IWG (Regus) for almost two decades. 

"Just flicking through Q1 numbers, you've got to say they're growing rapidly," he told Business Insider's Meghan Morris, having reviewed WeWork's latest financials.

"But if there's any hiccup in the market — watch out," he added.

Check out Business Insider's full interview with WeWork CEO Adam Neumann, how he built WeWork and why he thinks its recession-proof >>

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NOW WATCH: This Silicon Valley founder went from being 'really broke' to starting a VC fund that's invested $5 million in 100 companies

Beyond Meat has become 'Beyond Stupid,' Citron Research says (BYND)

Fri, 05/17/2019 - 2:28pm

Beyond Meat's runaway stock price has become "Beyond Stupid," according to Citron Research.

The company's stock soared 163% in its trading debut on May 2, drawing comparisons to tech names that went public during the dot-com bubble. They've gained as much as 285% from their initial-public-offering pricing of $25, hitting a record high of $96.78 apiece on Thursday.

They fell 6% on Friday and could be seeing heightened volatility due to options expiration.

"$BYND has become Beyond Stupid," Andrew Left's Citron Research tweeted on Friday. "Most heavily traded retail stock on Robinhood, market cap now bigger than industry, and superior competitor coming to market soon. We expect $BYND to go back to $65 on earnings On retail exhaustion."

As of Thursday, Beyond Meat had been added by more than 30,000 Robinhood users since its IPO, according to Robinhood data compiled by Markets Insider. Beyond Meat's market cap has ballooned to above $5.5 billion after closing its first day on the public markets at $3.83 billion.

Beyond Meat, one of the many unprofitable startups that have gone public in recent weeks, has generated losses in each year since its founding in 2009. The plant-based-burger maker lost $29.9 million in 2018, $30.4 million in 2017, and $25.1 million in 2016 as it "invested in innovation and growth," it said.

Its sales have surged over the same time, growing to $87.9 million last year from $16.2 million in 2016.

Rebecca Ungarino contributed to this story.

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Trump is rolling back steep tariffs on metal from Canada and Mexico

Fri, 05/17/2019 - 2:00pm

  • President Donald Trump on Friday said he would remove metal tariffs on Canada and Mexico.
  • The move marks a major step toward ratifying the countries' new trade agreement reached last year.
  • The metal tariffs were levied in a bid to keep cheap material from flooding the US market, but the sweeping policy has drawn criticism from lawmakers who said it alienated allies.
  • Visit Markets Insider's homepage for more stories.

President Donald Trump on Friday announced the US would be removing metal tariffs on Canada and Mexico, clearing a major hurdle for a new North American trade agreement.

The announcement that Mexico and Canada would no longer face US tariffs of 25% on steel and 10% on aluminum, which were first announced in March 2018, came after Trump spoke with Canadian Prime Minister Justin Trudeau.

Mexico and Canada agreed to remove all retaliatory tariffs following the adjustment, according to the Associated Press, which was set to take effect within 48 hours.

The metal tariffs were levied in a bid to keep cheap material from flooding the US market, but the sweeping policy has drawn criticism from lawmakers who say it alienated allies.

Trade officials from Canada and Mexico had signaled that unless the tariffs were lifted, they would be reluctant to ratify an overhaul of the decades-old North American Free Trade Agreement reached last year.

Members of Congress have been trying to persuade the administration to shift focus to China, with some refusing to debate the newly branded United States-Mexico-Canada Agreement until duties on North American steel and aluminum are removed.

"I've met with congressional colleagues, as well as US, Canadian, and Mexican trade officials, to discuss how our nations will secure legislative approval of USMCA," Sen. Chuck Grassley told The Wall Street Journal last month. "A significant roadblock is the administration's tariffs on steel and aluminum and retaliatory Canadian and Mexican tariffs on US products."

SEE ALSO: A report on Trump's NAFTA overhaul found that it's not going to do much for the economy

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My AmEx Platinum costs me $550 a year, but I cut the fee nearly in half by taking advantage of a hugely valuable perk

Fri, 05/17/2019 - 1:49pm

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  • The Platinum Card® from American Express charges a high $550 annual fee, but some of that cost is immediately offset by up to $200 in airline fee credits.
  • Airline fee credits are for incidentals including checked bag fees, seat selection fees, onboard food and beverage purchases, and ticket change and cancellation fees.
  • Sometimes, depending on the airline, the fee credit can also be used for a gift card that can then purchase airfare — but that's not its intended use, and may expire at any time.
  • Even using the free credit for things like checked bag fees and ticket changes, the value becomes clear immediately.

The Platinum Card from American Express is one of my favorite credit cards, even despite its $550 annual fee. With an annual fee that high, though, the benefits better be worth it! In my option, they are, and that's why I keep this card around.

One of the easiest ways to offset a good part of the $550 annual fee each year is through the AmEx Platinum's annual airline credit. Each year, cardholders are eligible to have up to $200 in airline fees reimbursed. If these are fees you would pay each year anyway, it effectively brings the annual fee down to $350.

But, before you get too excited, it's important to fully understand how this benefit works.

First off, before you can use your annual airline fee credit, you must select which airline you would like the benefit to apply to. Unfortunately, it has to be one airline, and it is not possible to change your selection midway through the year.

This does somewhat reduce the usefulness of this benefit, but it can still go a long way toward offsetting the annual fee. You airline options include United Airlines, Hawaiian Airlines, Frontier Airlines, Spirit Airlines, American Airlines, JetBlue Airways, Southwest Airlines, Delta Air Lines, and Alaska Airlines.

Technically, the airline fee credit applies only to airline fee incidentals. These incidentals include checked bag fees, seat selection fees, onboard food and beverage purchases, and ticket change and cancellation fees. More types of purchases may be included as an incidental fee, but it depends on the airline. The TPG Lounge Facebook Group is a great place to check to see what has been counting for other people at any given time.

The AmEx Platinum's airline fee credit is not supposed to apply to ticket purchases, upgrades, or gift cards, but in some cases it has been possible to use the credit for airline gift cards that are then used to purchase airfare. For a few years, I would use my AmEx Platinum fee credit for American Airlines gift cards instead of incidentals.

As of 2019, this is no longer working for American Airlines. I have instead switched my designated airline to Southwest and have elected to get Southwest gift cards for the time being, though this could also stop working at any time — because, again, the fee credit is intended to be used for fees like checked bag fees and ticket change and cancellation fees.

And even when we're no longer able to buy gift cards with the airline fee credit, it will still be a quick way to offset nearly half the annual fee.

Learn more about the AmEx Platinum from our partner The Points Guy »

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I upgraded my standing desk after a making the switch from sitting and it was a great move

Fri, 05/17/2019 - 1:33pm


I think I got my first desk when I was about ten. For the following 41 years, despite knowing that there was a history of writing while standing that stretched back through Ernest Hemingway and other greats, I took a seat. First with pen and paper, later with a typewriter, and then with desktop and laptop computers.

In my experience, writers don't like to mess with what's working. My daily output for decades has been in the ballpark of 500-1,000 words, achieved while sitting, and I was disinclined to shake that up.

However, I heeded the modern assessment that sitting is death, while also studying my usually much younger colleagues pecking away at the high-tech standing-desk contraptions (when Business Insider moved our offices to Wall Street, everybody was offered a standing desk that can be moved up and down, in the event that a spell of sitting is desired).

I wasn't ready to shake up my office desk, which is sort of a shrine to spending four years at Business Insider writing about cars. My home setup was a different story. I use a laptop there (it's a desktop with a big monitor at the office), so while I was on a two-week staycation in August, I made the switch.

Read more: I've been making coffee with a French press for a decade — and I'm convinced it's the best way to enjoy a morning cup

I spent exactly zero dollars. Luckily, I had an old cardboard wine box that was precisely as high as it needed to be, and with precisely enough surface area when flipped upside down, to support a MacBook Air. I reasoned that such a lightweight, el-cheapo approach could both be easily switched back to the old arrangement — and, if I liked the new deal, replicated in wood for a more polished vibe.

My desk isn't terribly large, and the stuff I have on it is stuff I want to keep on it, so the overall standing-desk footprint had to be modest in any case.

But although the box was the ideal shape and size, it eventually wore out. I initially thought about my custom-made idea, but some searching on the internet turned up StandStand, a Massachusetts-based company that got its start on Kickstarter and was founded by a Harvard doctorate who now teaches Arabic.

StandStand sells a variety of desks, with a large top-of-the-line model in bamboo going for $425. I bought the most basic portable model, which is made of birch and costs $59. I breaks down into three pieces, so you can bring your standing desk anywhere. It's also quite sturdy. I've been using it for a little over a month now, and I'm delighted.

My standing desk coincided with wearing my Apple Watch 3 more consistently, so I now know that thanks to a humble wine box from Foxhorn Vineyards (and later the StandStand desk), I'm routinely beating my standing objectives. I also generally feel better — but not radically better. Anybody who thinks a standing desk will be life-altering probably expects too much. The benefits are more incremental than dramatic, is seems.

There's also a physical-adaptation curve to deal with. In my case, my lower back was in moderate pain for about a week when I first made the switch. But I played through it. Worth the struggle, as I can now put in almost an entire day without sitting down. I also didn't notice any major changes to my writing process. I more or less picked up where I left off, just on my feet instead on my rump.

I wasn't actually the worst sitter in the world, by the way. My system was to sort of perch on the edge of my chair to keep my back as straight as possible. But this is not an easy discipline to enforce. And although I worked fine in the pre-internet days, when I could write a sentence and then spend the next 15 minutes thinking about the next sentence, the pace of online publishing doesn't permit that. A digital journalist can find him or herself sitting for 12 straight hours.

So in the end, I'm glad I finally stood up. So glad, in fact, that I also switched to a standing desk at the office.

Of course, in both places, I kept my chair. 

SEE ALSO: Fender has discovered that guitars aren't just for rock stars anymore — and they could help your mind stay young as you age

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