Syndicate content Business Insider
The latest news from Finance

Intel's Mobileye and the British government have found an unexpected way for self-driving data to improve infrastructure (INTC)

Mon, 01/07/2019 - 7:45pm

  • Intel's Mobileye has joined with Ordnance Survey, Britain's national mapping agency.
  • Mobileye and Ordnance Survey will combine geospatial maps of the island nation with Mobileye's self-driving data.
  • The results will be extremely detailed maps that can be used by clients such as utilities and telecommunications firms.

On Monday, Mobileye chose CES in Las Vegas to announce a partnership in Great Britain. 

Characterizing the deal as an "agreement to bring high-precision location data to UK agencies and businesses," Mobileye demonstrated how the huge amounts of data collected by self-driving technologies can be applied to unexpected challenges.

The partnership is between Mobileye, an Israel-based startup acquired by Intel in 2017, and Ordnance Survey, a British government agency that has been around since 1745 and has responsibility for detailed mapping of the island nation.

"The deal demonstrates the utility of mapping innovation beyond future autonomous vehicles," Mobileye said in a statement.

"It is a prime example of how Mobileye's unique mapping capabilities can extend the value of location data to businesses in new market segments, such as smart cities. The key lies in making such data available to businesses and governments in a way that is anonymized for privacy."

Read more: Waymo, Cruise, Mobileye, and Tesla are all tackling self-driving cars in different ways — here's the breakdown

As various business models develop around self-driving vehicles, companies have begun to realize that the data they gather could be as valuable as operating autonomous taxi or delivery services — and maybe more so. The data has become a new commodity that can be refined in ways that are useful.

In the case of the Mobileye-Ordnance partnership, maps of extreme precision can be created and offered to customers such as utilities and telecoms; these clients need to know exactly where underground and above-ground infrastructure overlap. 

"They've never had high-level-enough, above-ground maps, relative to what's underground," Jack Weast, a Mobileye vice-president, told Business Insider.

He added that the partnership opens up new lines of revenue and provides a means to make money off data being captured by vehicles equipped with Mobileye tech.

The deal goes beyond monetization, however. Ultimately, Mobileye and Intel want to create a better urban experience and improve safety.

"Using maps to improve operations between businesses and cities will help bring us closer to the realization of smart cities and safer roads," Mobileye CEO Amnon Shashua said in a statement.

SEE ALSO: The 11 coolest cars we can't wait to see at CES

FOLLOW US: On Facebook for more car and transportation content!

Join the conversation about this story »

NOW WATCH: What would happen if Elon Musk left Tesla

Advertisers are fleeing in droves after Tucker Carlson's comments about immigrants on Fox News — here's the list

Mon, 01/07/2019 - 6:57pm

  • Companies that advertised during Tucker Carlson's show on Fox News have begun fleeing in droves following his anti-immigrant comments.
  • People were outraged and threatened to boycott companies advertising on Carlson's show.
  • Here are the businesses that have pulled their advertisements so far.

Companies that advertised during Tucker Carlson's show on Fox News have begun fleeing in droves following his anti-immigrant comments made in December.

During his show, the "Tucker Carlson Tonight" host expressed concern with the state of US immigration policy and immigrants' educational backgrounds. He urged more "scientists and skilled engineers" to come to the US and said that allowing immigrants from impoverished countries to come to the US would make it "poorer and dirtier."

"Instead, we're getting waves of people with high-school educations or less," he said on his show. "Nice people — no one doubts that. But as an economic matter, this is insane. It's indefensible, so nobody even tries to defend it.

"Instead, our leaders demand that you shut up and accept this. We have a moral obligation to admit the world's poor, they tell us, even if it makes our own country poorer and dirtier and more divided."

Carlson's comments were widely rebuked, and several people threatened to boycott his advertisers, which began cutting ties.

Carlson reiterated his claims and likened the effect of the US's immigration policy to a city in Mexico.

"The left says we have a moral obligation to admit the world's poor," Carlson said, "even if it makes our own country more like Tijuana is now, which is to say poorer and dirtier and more divided."

Fox News expressed supported for its host's opinions, saying it was "a shame that left-wing advocacy groups, under the guise of being supposed 'media watchdogs' weaponize social media against companies in an effort to stifle free speech."

The company also described the advertisers' moves as "unfortunate and unnecessary distractions," and accused progressive media watchdogs with "deeply political motives" of threatening Carlson on Twitter.

"While we do not advocate boycotts, these same groups never target other broadcasters and operate under a grossly hypocritical double standard given their intolerance to all opposing points of view," Fox News said.

Here's the full list of companies that have pulled their ads from Carlson's show:

SEE ALSO: IHOP will no longer advertise on Tucker Carlson's Fox News show after he says immigrants are making the US 'poorer and dirtier'

Red Lobster

Source: Business Insider


Source: Business Insider


Source: Hollywood Reporter

See the rest of the story at Business Insider

An electronic trading veteran has a new role at MarketAxess disrupting a market going through a 'once in a lifetime' evolution

Mon, 01/07/2019 - 5:46pm

  • Chris Concannon has left his role as president of Cboe Global Markets for MarketAxess, one of the largest electronic trading platform for US bonds.
  • Concannon will serve as president and chief operating officer effective January 22.
  • The industry veteran brings his experience in electronic trading to a market that still largely trades over the phone.

Chris Concannon loves a good challenge.

The former president and chief operating officer of Cboe Global Markets will soon get it, as he aims to help disrupt a market with little transparency where most trades are still conducted over the telephone. On Monday it was announced that Concannon had left his role at the exchange operator for a new role helming MarketAxess, the largest electronic trading platform for US bonds.

Concannon, who was CEO of Bats Global Markets until it was acquired by Cboe in 2017, is a veteran of electronic trading, having also spent time at Nasdaq, trading platform Instinet and market maker Virtu.

His experience in electronic trading will prove vital — research from Greenwich Associates in 2018 estimated only 26% of trading in US high-grade and high-yield bonds was done electronically.

Still, that’s a 7% uptick from the previous year, showing the industry is ripe for change.

“I am someone that loves watching large asset classes go through evolutionary changes,” Concannon told Business Insider in an interview. “I just see MarketAxess sitting at the center of this evolutionary change happening within the global bond market. It is a shift from a manual, dealer-driven market to a much more automated electronic market.”

Concannon, who will start at MarketAxess on January 22, is at the right place to lead that change, as the trading platform holds significant market share. In data compiled by Greenwich Associates in third quarter of 2018, MarketAxess handled 85% of electronic trading done on US high-grade and high-yield bonds.

And while he brings a wealth of knowledge from his time on the equities side, he admitted it’s not an exact comparison. Concannon pointed to the size of the fixed income market, and how it continues to grow thanks to the debt loads corporations and governments around the world have taken on.

“The fixed income market is the mother of all markets. … I have only graduated out of equities into fixed income,” Concannon said. “It is just this unbelievably large asset class that is going through an evolution that will happen once in a lifetime. To participate in that evolution is just what excites me the most about this opportunity.”

Meanwhile at Cboe, Chris Isaacson, who had served as the chief information officer, has been promoted to COO. Ed Tilly, Cboe’s CEO and chairman, will take on Concannon’s title of president. While Isaacson will manage day-to-day operations, Tilly will take over the business lines Concannon oversaw.

“Bittersweet to see Chris go, but our day-to-day operations will be unchanged,” Isaacson told Business Insider. “The path we set for 2019 and beyond is really not impacted."

Join the conversation about this story »

NOW WATCH: Bernie Madoff was arrested 10 years ago today — here's what his life is like in prison

China's best hope is that Trump, Wall Street, and the whole world are willing to play pretend

Mon, 01/07/2019 - 5:16pm

  • China's economy is showing signs of extreme stress, and not just because of President Donald Trump's trade war.
  • Economic data is showing that China's debt problems are gobbling up cash faster than more Chinese people can become consumers.
  • To change this narrative and calm markets, China will have to make a deal with Trump by March 1.
  • The deal will likely be a sham.
  • But the best outcome for China is that Trump pretends it's good so that he can declare victory, and Wall Street and the rest of the world can pretend China's economy has a catalyst for recovery.

China's best hope for stabilizing its economy is a massive, coordinated, global game of pretend.

Here's what that would look like: On March 1, Trump's administration emerges victorious from its trade talks with Beijing. It strikes some sort of deal that fundamentally changes what China's leaders have been planning for and investing in their their economy for years, and helps US companies with issues like Chinese intellectual-property theft and forced joint ventures.

Then, Wall Street deems it safe to go back into China's waters and foreign investment starts pouring in while domestic money stops heading out. 

After that we can all pretend the Chinese economy doesn't have dangerous structural issues that threaten to pull parts of the world into recession — at least for a while.

This is the best we can do.

For the last week or so — since Apple warned about weakness in the Chinese economy affecting its revenue going forward — Wall Street and Washington have been debating whether or not China's economic troubles are mostly being caused by Trump's trade war.

They are not. That is why all we have left is pretend.

It's the foundation

Let's go back to what China has been saying it was going to do with its economy for years now, which is switch it from one based on investment to one based on consumption.  That would make China's economy more like the US — more able to support its own growth on the back of consumer buying power.

It's not there yet. Not by a long shot.

Remarkable graphic showing that even though China rebalancing has made some progress, it is light years away and structurally a country mile from its developed and emerging peers. 1/n

— George Magnus (@georgemagnus1) January 6, 2019

That means for the economy to keep growing, it still very much needs outside investment and consumption. Or it needs to keep handing out credit and letting debt build up. The latter is dangerous. The more debt that builds up in the system, the more money is spent paying it rather than doing more productive things.

The more debt that builds up, the slower the economy goes until it grinds down to stall speed.

And so a few years ago,Chinese leaders said they were going to slow credit creation and clamp down on shadow banking. Last year was supposed to be the year we saw the fruits of that labor. But it wasn't, the economy started sputtering in June. And according to Leland Miller, the founder of survey firm China Beige Book, only private firms ever slowed their borrowing, and not for long.

"Halfway through 2017 private firms were already dialing back their hiring, borrowing, and investing, but not SOEs [state owned enterprises], they kept their pedal to the metal all the way into 2018," he told Business Insider. "So a 2018 slowdown was inevitable regardless of what was happening around the globe, or with Trump trade."

If you pay attention to Chinese media, this is something entrepreneurs have been angry about. Many feel that they've had to take on all the burden of China's credit reforms even though state-owned enterprises hold most of the debt. According to the Chinese credit-rating agency Chengxin, 83% of the companies that have defaulted on debt payment since 2014 are private. They're the ones dealing with all the moral hazard.

And so billionaire tycoons like Chen Hongtian, founder of Cheung Kei Group, are predicting "the difficulties will be larger than expected" going forward. That's what he told a gathering of The Harmony Club, a Shenzen-based group of 150 of China's richest businessmen.

"The winter will be very cold," he said according to the South China Morning Post. "I would like to remind again … it’s hard to predict and all that I can say is that difficulties [for private enterprises] are much bigger than people expected."

So in China we have more and more good money chasing a growing pile of bad money. Policymakers have tried to enact measures targeted at private and smaller businesses to free up more good cash. Tax cuts, for example. But they haven't done anything to turn the economy around. Most recently, policymakers announced a cut in Chinese banks' reserve ratio requirement, but Miller says a lack of access to credit has never been the problem, so it won't be the solution.

All Trump's trade war has done is make this even worse. For one thing, it has added a measure of uncertainty that has scared off China's much-needed foreign investors. Foreign direct investment plummeted to $25.2 billion in Q3 from $52.7 billion in Q2, and Citigroup estimates that about $26.2 billion left China over the same period. 

"The current weakness is not due primarily to the trade war," Miller said. "It's a major pressure point, certainly, but much of the weakness we picked up this year — particularly in manufacturing — predates the imposition of large scale tariffs.

"A March 1st US-China trade agreement would relieve a great deal of uncertainty from the rest of 2019, but it would only keep things from getting worse, not necessarily help the economy get better."

Come play with us

So China's best near-term hope is that this trade war ends, and that —true or not— China bulls on Wall Street can sound the all clear to get back in the water.

To achieve this, policymakers have three options:

  1. Cave to Trump's demands and significantly and transparently change the course of its economy. This would be a massive admission of defeat.
  2. Pretend to cave to Trump's demands and risk a return to war in the future if their game is found out. 
  3. Kick the can down the road and wait for another, kinder administration in the US. This risks freaking out financial markets as investors get doubtful of, or impatient with progress. In the meantime, the Chinese economy will suffer.

It's not hard to see that pretending, if China can pull it off, is the best solution for the time being. So trade negotiators will be looking out for loopholes and hollow wins. The head of Trump's trade delegation, Robert Lighthizer, seems adamant that the president will not accept those as total victory.

But Trump loves (at least to claim) victory, so maybe he'll decide to play along with China.

And maybe, since Wall Street loves fast cash and stability, it'll take "the trade war is over" narrative and run with it, pouring much needed investment back into the country.

That's the absolute best case here, and it's vapor.

SEE ALSO: It's time to stop listening to Ray Dalio on China

Join the conversation about this story »

NOW WATCH: I'm a diehard iPhone user who switched to Android for a week — here's what I loved and hated about the Google Pixel 3 XL

Here's how the new US tax brackets for 2019 affect every American taxpayer

Mon, 01/07/2019 - 3:48pm

  • The IRS took inflation into account when it released new tax brackets, which will apply to income earned in 2019.
  • Tax Day 2019, when taxes are due for income earned in 2018, is Monday, April 15.
  • The federal income-tax ranges have shifted slightly, and the standard deduction will be $12,200 for single filers and $24,400 for married filers.

Tax Day 2019 is April 15. That means taxes are due for income earned in 2018, the first tax year under the 2017 GOP tax law.

The IRS recently updated the seven federal income-tax brackets for 2019 to reflect inflation. So any income earned this year will be subject to the new tax brackets.

The standard deduction will be $12,200 for single filers and $24,400 for married filers, up $200 and $400, respectively.

Here's how the brackets have changed for the new year compared with 2018:

For single filers:

For married filers:

For head-of-household filers:

Other tax changes for 2019 include increased limits for retirement contributions:

  • $19,000 limit for 401(k), 403(b), and most 457 plans. (If you're 50 or older, you can put away an additional $6,000.)
  • $6,000 limit for IRAs. (If you're 50 or older, you can put away an additional $1,000.)

And higher exemptions for gifts and estate taxes:

  • $11.4 million limit for lifetime gift and estate-tax exemption.
  • $15,000 limit for annual gift and estate-tax exemption (same as 2018).

Join the conversation about this story »

NOW WATCH: Tim Cook's estimated net worth is $625 million — here's how he makes and spends his money

Pharma giant Eli Lilly just made an $8 billion bet on a cutting-edge scientific approach that uses DNA to treat cancer (LLY, LOXO)

Mon, 01/07/2019 - 3:33pm

  • The drug giant Eli Lilly announced on Monday that it was acquiring the cancer-focused biotech Loxo Oncology for about $8 billion.
  • Loxo focuses on gene mutations in treating cancers, which is a unique approach.
  • The deal is "bigger than what we've done before," Lilly CEO David Ricks said, but "isn't out of range to do again."

The pharma giant Eli Lilly & Co. on Monday said it planned to buy the biotech Loxo Oncology for $8 billion in cash.

It's an unusually large acquisition for Eli Lilly that also represents a massive bet on Loxo's genetically based approach to treating cancer.

Most cancer drugs treat a specific type of the disease, such as breast cancer or lung cancer, but Loxo's medicines target gene mutations in cancers instead.

As a result, its drugs are intended to treat more than one type of cancer — like Loxo's Vitrakvi, which was first approved in the US in late November and has been tested in people with cancers of the lung, colon, breast, and thyroid.

Eli Lilly already has a presence in oncology. Notably, the chemotherapy Alimta is one of its most valuable products, bringing in more than $2 billion in revenue in 2017, but the drug has been losing patent protection in other countries and could also lose it in the US soon.

That said, the drugmaker's cancer focus hasn't been in this type of "targeted" oncology before, the Stifel analyst Stephen Willey said. Drugmakers including Pfizer, Novartis, and AstraZeneca would appear more obvious acquirers for Loxo, he said. 

"The emergence of LLY is a little surprising, but LLY's existing commercial presence in [non-small cell lung cancer] and expiring Alimta exclusivity makes sense," Willey said. 

Read more: The FDA just approved a drug that targets cancers based on DNA, rather than where the tumor is in your body

The deal values Loxo at $235 a share, a premium of roughly 68% over the company's Friday closing price, Eli Lilly said. The deal is expected to close in the first quarter of 2019. If it doesn't go through, Loxo could owe Eli Lilly a breakup fee of $265 million, according to a new financial filing

The roughly $8 billion deal is Eli Lilly's largest acquisition by far since at least 2015, according to financial filings.

On a Monday-morning conference call, Lilly CEO David Ricks said that the acquisition was "bigger than what we've done before" but that Loxo also notably had four in-development or recently approved medicines. "I would say going forward it isn't out of range to do again," Ricks added.

Eli Lilly will keep looking for other deals in cancer and other areas, Ricks said, adding that there were "many more opportunities" in cancer because of recent scientific advances.

See: Here's why Bristol-Myers Squibb's record-breaking $74 billion biotech deal is facing investor backlash

Loxo already has a Food and Drug Administration-approved drug, Vitrakvi, which came out of a partnership with the drugmaker Bayer.

Eli Lilly noted that in its explanation of the deal, but it especially emphasized the company's experimental drug Loxo-292, along with two other drugs in development.

Termed a "RET inhibitor" for the types of genetic alterations that it focuses on, Loxo-292 has promise in multiple cancer types.

The medication has received a special "breakthrough therapy" designation from the FDA for lung cancer and two types of thyroid cancer, and it could start being sold as early as 2020.

Read more:

Join the conversation about this story »

Trump firing Fed Chairman Jerome Powell would send shockwaves through the markets

Mon, 01/07/2019 - 3:13pm

  • President Donald Trump has mulled firing his pick for Chairman of the Federal Reserve, according to reports.
  • He could technically do so, according to experts, but the process would be complicated.
  • If he fired Powell, there could be damage to financial markets and institutions in the long-run, the experts said.

President Donald Trump has repeatedly lashed out at Jerome Powell, his appointment for Federal Reserve Chairman, about rising interest rates. Last month, he even reportedly considered firing him.

While past presidents have been critical of the Federal Reserve from time to time, there’s little precedent for the degree of Trump’s attacks on monetary policy. Here’s what you need to know.

Can Trump oust Powell?

It’s unclear.

“What's going on now is unprecedented in the history of the Fed,” Ken Kuttner, a former staff economist at the central bank, said in an email. “Firing Powell would be crossing a really bright red line — although that hasn't stopped Trump before, so you never know.”

In addition to the chairman of the Federal Reserve Board of Governors, Powell also serves as chairman of the Federal Open Market Committee and as a governor himself. Trump could arguably fire Powell as chair of the Board of Governors, according to Peter Conti-Brown, a legal scholar at the University of Pennsylvania and the author of a political history of the Federal Reserve.

Under the Federal Reserve Act, a governor can be removed “for cause.” While this isn’t defined in the statute itself, courts have taken it to mean he would have to be guilty of negligence, malfeasance or dereliction of duty.

On Friday, Powell said he would not resign if Trump asked him to. Because Trump doesn't have authority to fire him as chairman of the Federal Open Market Committee, according to Conti-Brown, that means the typical trio of positions Powell holds could be broken up.

“Then we might be in a world where we have two chairs — where those roles were separated. I really hope it never comes to that,” he said. “Because that would lead to chaos and confusion in markets and in the economy.”

How would financial markets react?

Probably not in a positive way.

Those in the Oval Office have historically avoided commenting on interest rates out of respect for the Federal Reserve, a signal that investors can count on stable monetary policy. While former President Richard Nixon successfully pressured his appointee Arthur Burns, his broadsides occurred behind closed doors. (And that didn’t work out too well.)

“I'm guessing the markets would react very badly to his firing,” said Kuttner. “Markets value stability and such blatant intervention would create a huge amount of uncertainty.”

Even members of Trump’s cabinet, including Treasury Secretary Steven Mnuchin and acting White House chief of staff Mick Mulvaney, have walked back reports about ousting Powell. The White House did not immediately respond to an email requesting comment.

“Leaders in his own party and in the business community would signal a lack of support, probably pointing to the potential turmoil in the markets and the economy that would follow,” said Gregory Wawro, a political scientist at Columbia University.

But firing Powell would mean lower interest rates, right?


Removing Powell as Fed Chair wouldn't necessarily have any effect on short-term rates. The target range for the benchmark interest rate is decided by the Federal Open Market Committee, made up of 12 officials, not by Powell alone.

“We tend to ‘personalize’ monetary policy in this country, associating it with the chair — but that's a mistake,” Kuttner said. “What seems to be lost on Trump is that the Chair gets only one vote on the FOMC, just like everyone else.”

In any case, lower interest rates aren’t always positive for the economy. There’s bipartisan consensus among economists and lawmakers that tightening monetary policy can be necessary to avoid high levels of inflation.

Would it have long-term consequences?

In the long-run, ousting Powell could undermine confidence in what is perhaps the most powerful central bank in the world.

“[Firing Powell] would likely do far more to undermine the continued recovery of the economy under President Trump than the Fed's raising of interest rates,” said Adam Ozimek, an economist at Moody’s. “Economists and market participants understand that an independent central bank is a requirement, and not an option, for a well-functioning and economically healthy country.”

Even if Powell keeps his job for the rest of his four-year term, damage to the Federal Reserve may already be done. On Twitter alone, Trump has complained to 57 million followers about the central bank nearly a dozen times since taking office.

“Institutional damage and erosion is virtually impossible to measure in the moment,” Conti-Brown said. “If future presidents think it’s completely appropriate to criticize and try to reshape Fed policy day by day, as opposed to through the appointment process, that will be very damaging to institutional credibility.”

SEE ALSO: An ugly economic lesson from the Nixon era proves why Trump's criticisms of the Fed are so worrying

Join the conversation about this story »

NOW WATCH: The equity chief at $6.3 trillion BlackRock weighs in on the trade war, a possible recession, and offers her best investing advice for a tricky 2019 landscape

MoviePass posted an HR job listing following months of turmoil and employee allegations of inappropriate behavior

Mon, 01/07/2019 - 2:59pm

  • On Friday, MoviePass posted a job listing for a human resources position. 
  • The company has not had a dedicated HR department since its two-person staff was fired in November.
  • Business Insider reported in December that some MoviePass employees had made allegations of inappropriate behavior.

After trying to operate a productive workplace without a dedicated human resources department since November, MoviePass is looking for some help. 

On Friday, the movie-ticket subscription startup posted a job listing for a "HR Generalist" which would, according to the job description, "partner with Management team to champion our culture and values."

"Your focus will be on partnering with the members of our team, creating exciting career paths, and fostering a community of high performance, innovation, and teamwork," the listing, which was posted on LinkedIn, continued.

The job listing went up on the same day Business Insider posted excerpts of a 704-word resignation letter by a former MoviePass product manager, Eric Jeng. Jeng sent the email resignation to the whole company on Wednesday. In that letter, Jeng implored MoviePass to get a "functional and qualified HR department."

Read more: Christian Bale thanks Satan at the Golden Globes for inspiring his performance as Dick Cheney in "Vice"

"When leadership decided to fire our only qualified HR employees, they sent a very clear message that they care very little about employee safety and security," Jeng wrote. "There currently is no effective outlet for employees to discuss issues about their comfort and safety in the workplace."

MoviePass was not immediately available to comment about the job listing to Business Insider.

In November, MoviePass' two-person HR team was fired, leaving the duties to Jake Petersen, a senior vice president at the company. Since then, there was one instance when payroll was delayed a few hours getting to employees, according to an all-hands email obtained by Business Insider. (MoviePass told Business Insider "there was never any likelihood it would not" pay employees on pay day.) MoviePass also had to deal with employee reaction to Business Insider's reporting in December on employee allegations of inappropriate behavior by marketing consultant Bob Ellis toward some female staffers.

In Jeng's letter, he wrote that he was "disappointed" in the company's response to allegations of inappropriate behavior. Though it's unclear what allegations Jeng was referring to, or whom they were against, four current and former MoviePass employees told Business Insider they believed Jeng was referring to Ellis.

"It is clear to me that our work environment has become simply too dangerous and toxic," Jeng wrote in his resignation letter, also saying that team morale at MoviePass "worsens and worsens, with no end in sight."

In addition to full health, dental, and vision package, the benefits listed by the job posting included a MoviePass card. 

SEE ALSO: A bootleg version of hit Japanese zombie movie "One Cut of the Dead" showed up on Amazon Prime Video and insiders worry it has put a US release in jeopardy

Join the conversation about this story »

NOW WATCH: 6 airline industry secrets that will help you fly like a pro this holiday season

SoftBank has slashed a planned $16 billion mega-investment in WeWork after facing objections and will now invest $2 billion (SFTBY)

Mon, 01/07/2019 - 2:44pm

  • SoftBank has backed off its plans to invest an additional $16 billion into the privately held workspace startup WeWork, according to the Financial Times.
  • Instead, the Japanese tech company will invest just $2 billion, according to the report. The deal has not yet been finalized.
  • SoftBank's initial plan, reported in October, would have given it a majority stake in WeWork. But the size of the deal reportedly upset some of its biggest financial backers in Saudi Arabia and Abu Dhabi.

SoftBank has backed away from its plan to invest $16 billion into the shared-workspace company WeWork, according to Financial Times.

Instead, SoftBank will invest just $2 billion, according to Financial Times, which said WeWork and SoftBank are late in the negotiation process. The deal is expected to be announced early next week, though it has not been finalized, according to the report, which cites anonymous sources.

SoftBank has already invested $8 billion into the startup.

SoftBank's plan to invest $16 billion into WeWork was first reported by The Wall Street Journal back in October.

That investment would have given the Japanese tech company a majority stake in WeWork. But SoftBank CEO Masayoshi Son reportedly faced criticism from the company's biggest backers in Saudi Arabia and Abu Dhabi over the size of the deal.

Under the new terms, the deal will not include money from the SoftBank Vision Fund, the investment arm of the company which backed the majority of its existing $8 billion investment.

A WeWork spokesperson declined to comment on the report. SoftBank did not immediately return requests for comment.

SEE ALSO: WeWork is locking up its Kombucha taps in California to stop tenants from using up the kegs

Join the conversation about this story »

NOW WATCH: How Apple went from a $1 trillion company to losing over 20% of its share price in 3 months

Nvidia is surging after unveiling new chips targeting cost-sensitive laptop gamers (NVDA)

Mon, 01/07/2019 - 2:19pm

  • Nvidia on Sunday unveiled GeForce RTX 2060, which at $349 can make the company's new Turing architecture accessible to laptop gamers.
  • The three first GeForce RTX graphics cards were unveiled in August with much higher prices and designed for high-ending desktop PCs.
  • Management on Sunday said it's finally ready to bring those new graphics chips to gaming laptops.
  • By getting to the laptop market and attracting cost-sensitive PC gamers, Nvidia could offset the recent impact of a plunge in demand from cryptocurrency miners.
  • Watch Nvidia trade live.

Nvidia was up 5.26% to $143.35 a share Monday after the company unveiled a cost-sensitive gaming chip that can bring its new graphics technology to laptops.

At a Las Vegas event on Sunday evening, Nvidia CEO Jensen Huang unveiled the GeForce RTX 2060, a gaming graphics processing unit based on the company's recently-launched Turing architecture. Like Nvidia's previous Turing gaming GPUs, the RTX 2060 also supports new features that can improve the gaming experience, such as real-time ray tracing, a rendering technology that allows for more cinematic and realistic visuals, and Deep Learning Super Sampling, a technology that helps to improve image quality.

But the RTX 2060's $349 retail starting price is relatively surprising, compared to the company's previous three Turing graphics cards, the RTX 2080 Ti, 2080, and 2070, which sport starting prices of $999, $699 and $499, respectively.

In August, the chipmaker unveiled the first three GeForce RTX graphics cards, for high-ending desktop PCs. Nvidia held back at the time from announcing any plans to bring RTX beyond desktop machines, but on Sunday the company said it's finally ready to bring those new graphics chips — including Geforce RTX 2080, RTX 2070 and RTX 2060 GPUs — to gaming laptops.

"Introducing GeForce RTX Laptops," Nvidia wrote in a tweet late Sunday. "Bring the power of RTX GPUs on the go with over 40+ models rolling out starting January 29th."  

By getting to the laptop market and attracting cost-sensitive PC gamers, Nvidia could offset the recent impact of a plunge in demand from cryptocurrency miners.

In November, the chipmaker reported brutal third-quarter earnings that missed analysts' expectations. Management attributed the underwhelming results to excess GPU inventories as the crypto boom turned into a bust.

Nvidia was down 36% in the past year.

Now read:

Join the conversation about this story »

NOW WATCH: The equity chief at $6.3 trillion BlackRock weighs in on the trade war, a possible recession, and offers her best investing advice for a tricky 2019 landscape

CBS announces News President David Rhodes is headed for the exit after year of troubles

Mon, 01/07/2019 - 1:43am

  • CBS News President David Rhodes will vacate his role after a difficult year for the top network.
  • He will be replaced in March by Susan Zirinsky, CBS said in a statement released late on Sunday night.
  • Rhodes confirmed via a tweet later on Sunday that he will be exiting CBS.
  • The network and its news division have been shedding viewers since 2017 when the first allegations of sexual misconduct against leading CBS personalities first surfaced.

CBS News President David Rhodes is stepping aside following a difficult year for the news giant, the network revealed in a statement Sunday night.

Rhodes did not long survive the turmoil that has engulfed CBS and its news division following the investigation into sexual misconduct allegations stemming from as early as 2017 against major figures at the network.

Rhodes, 46, will be succeeded in March by Susan Zirinsky, a senior executive producer who has worked out of Beijing in 1989 and has run the news show "48 Hours" for more than 20 years, the network said.

Rhodes confirmed via Twitter after the story broke Sunday night that he is stepping down in the wake of a year to forget for the network and its news division.

"It's been eight incredible years since I joined @CBS," Rhodes tweeted Sunday. "I'm pleased to announce that I'll soon be handing the reins @CBSNews to Susan Zirinsky, our Senior Executive Producer."

CBS News ratings fell down a hole last year, following the 2017 disgrace left behind by former anchor Charlie Rose.

In December CBS News settled a lawsuit with three women who accused Rose of "blatant and repeated sexual harassment" and "subsequent unlawful retaliation."

The network's flagship news show, "60 Minutes" then lost its longtime executive producer, Jeff Fager who resigned after sending a threatening email to a reporter amid allegations he fostered an atmosphere at "60 Minutes" that tolerated sexual misconduct.

But that wasn't the worst of it for CBS.

Disgraced CEO Leslie Moonves has already been stripped of his massive golden parachute and CBS staff are currently awaiting the results of a report into the company which is set to entirely revamp the network and its workplace.

Moonves left the company in September after reports detailing sexual harassment and assault allegations from six women against the media executive, an investigation found that Moonves violated company policies and refused to cooperate with the investigation.

According to Forbes Moonves was one of the highest-paid CEOs in the US, worth an estimated $700 million. 

Zirinsky will take over in March, the network said.

SEE ALSO: Les Moonves left CBS in September with a net worth of $700 million. Now, he won't get a dime of his $120 million severance

Join the conversation about this story »

NOW WATCH: The world's largest cruise ship just landed in Miami — here's what it's like on board

Bridgewater, the biggest hedge fund in the world, crushed it in 2018 as most funds struggled

Sun, 01/06/2019 - 6:00pm

  • The world's biggest hedge fund, Bridgewater Associates, posted a 14.6% return for its flagship fund in 2018.
  • The fund was one of the few to post big gains in a year where hedge funds were on average down about 6.7%.

In a year where hedge funds saw bad performance and a surge in shutdowns, a few firms managed to avoid the carnage. The world's biggest hedge fund, $160 billion Bridgewater Associates, was one of them. 

Bridgewater's flagship fund, Pure Alpha, posted a 14.6% return net of fees in 2018, according to a person familiar with the firm's performance. 

The fund was one of the few to post big gains in a year where hedge funds were on average down about 6.7%, according to the HFRX Global Hedge Fund Index. 

Billionaire hedge fund manager David Einhorn posted his worst year ever, and Dan Loeb's Third Point also struggled

Bridgewater's founder, Ray Dalio, has said the economy is at "the seventh inning of the short-term debt cycle" and that the next financial crisis will play out more slowly than the last one in 2008.

Speaking to Business Insider's CEO Henry Blodget in December, he said: "They're tightening monetary policy. Asset prices are fully priced. And we're in the later stages of a long-term debt cycle, because the capacity of the ability of central banks to ease monetary policy is limited."

Also read:

Join the conversation about this story »

Earning 6% back at the supermarket is a no-brainer: Here’s why the AmEx Blue Cash Preferred is a winner

Sun, 01/06/2019 - 1:59pm

The Insider Picks team writes about stuff we think you'll like. Business Insider may receive a commission from The Points Guy Affiliate Network.

  • The Blue Cash Preferred® Card from American Express offers a shocking 6% back on your first $6,000 spent at US supermarkets each year (then 1%), plus 3% back at US gas stations.
  • Redeem your points for statement credits, gift cards, or merchandise.
  • The card charges a $95 annual fee, but you can easily earn over $600 in rewards your first year.

While it's fun to splurge now and again, most people spend the bulk of their money in the most boring ways possible. We pay our mortgage or rent payments, put gas in the car, and cover the high costs of raising kids and healthcare. Oh, and we put food on the table — lots and lots of food.

But, what if you could earn some cash back on all those grocery bills? What if you could earn a lot of cash back?

The Blue Cash Preferred® Card from American Express offers exactly that — 6% back on your first $6,000 in supermarket spending each year. The card does come with a $95 annual fee, but we feel the fee is well worth it.

In this post, we'll explain all the reasons why.

AmEx Blue Cash Preferred benefits

Before we dive into the gritty details, it's important to understand what the AmEx Blue Cash Preferred is, and what it isn't.

By and large, the AmEx Blue Cash Preferred is a straight-up cash-back credit card that doesn't offer a lot of ways to redeem your rewards. You can cash in your points for statement credits, and you do have the option to redeem for gift cards (starting at $25) or merchandise. On the flip side, you can't redeem your points for travel through a portal like you could if you had an American Express card that earns Membership Rewards points. You also cannot transfer your points to airline or hotel partners.

If you only want cash back though, this card is a star. Not only do you earn 6% back on your first $6,000 spent in US supermarkets each year (then 1%), but you also earn 3% back at US gas stations. You'll earn an additional 1% back on all other purchases as well, which is pretty standard for cash-back credit cards.

You can also earn a welcome bonus of $200 if you use your card for $1,000 in purchases within the first three months.

That's a lot of cash-back for sure, but you will have to pay a $95 annual fee that is not waived the first year.

Earn $600+ in rewards: Here's how

While there are oodles of cash-back credit cards without an annual fee, this card is still well worth it due to the astronomical rewards you can earn if you take full advantage. But, how much can you earn? Here's a good example:

Imagine you are the average family who spends a lot more than $6,000 per year (or $500 per month) at the supermarket. In fact, you spend $10,000 per year at Kroger or Whole Foods.

With the AmEx Blue Cash Preferred, you would earn $360 in cash back on the first $6,000 you spent and another $40 back earning 1% beyond the $6,000 cap.

That's $400 already in the bank, but don't forget that you also earned a $200 welcome bonus provided you used your card for $1,000 in purchases within three months of account opening. You're now up to $600. Now imagine you spend another $100 per month at US gas stations. At 3% back, that's another $36.

At this point, you're already up to $636 in rewards the first year — and that's if you didn't use your AmEx Blue Cash Preferred for regular spending and bills.

This is why the $95 annual fee is no big deal — especially the first year.

If you maximize the 6% back at US supermarkets, you'll get $360 in rewards every year at a bare minimum. That's more than enough to make up for the annual fee — and a lot more than you'd earn with a standard 1% cash-back credit card.

What to watch out for

The annual fee is the biggest downside you'll face with this card, but it's not the only one.

Don't forget that you'll eventually pay interest on all your charges if you don't pay your balance in full each month. The AmEx Blue Cash Preferred does offer 12 months with 0% APR on purchases and balance transfers requested within 60 days of account opening, but your rate will reset between 14.99% and 25.99% after that.

You don't have to be a genius to know that paying up to 25.99% APR to earn 6% back isn't smart. If you plan to carry a balance for the long haul, you would be much better off with a card that offers a lower ongoing rate.

Also note that late payments and returned payments come with a $38 fee. If you make late payments on your credit card, you can also get whacked with a penalty APR of 29.99%. Ouch!

The bottom line

The AmEx Blue Cash Preferred is a genius cash-back card for consumers who spend a lot of money at US supermarkets. However, this card works best for people who are debt-free and able to pay their balances in full every month.

If this describes you, you should absolutely consider the AmEx Blue Cash Preferred and all it has to offer — despite its annual fee. Paying $95 for the card every year may not be ideal, but you'll be hard-pressed to find any other card that offers 6% back at US supermarkets on your first $6,000 in spending each year (then 1%).

Of course, there are plenty of other cash-back credit cards to consider. If you're tired of spending money on boring bills without any return, check out the best rewards and travel cards and all they have to offer. While few cards offer returns as high as 6% in popular categories like supermarket spend, the perfect rewards card is different for everyone.

Click here to learn about the AmEx Blue Cash Preferred from Insider Picks' partner: The Points Guy

DON'T MISS: The best American Express cards

SEE ALSO: All of Insider Picks' credit cards coverage, in one place

Join the conversation about this story »

MORGAN STANLEY: Moderna could double after the biotech's massive wipeout in 2018 (MRNA)

Sun, 01/06/2019 - 12:16pm

  • Moderna Therapeutics had a record-breaking initial public offering in December but has since tumbled 35% from its debut price to about $15 a share.
  • On Wednesday, Wall Street analysts issued their price targets for Moderna. With the exception of JPMorgan and Barclays, all were above Moderna's $23 IPO price.
  • Watch Moderna trade in real time.

The buzzy biotech Moderna broke records with its initial public offering last month, but its track record since has fallen short.

Moderna, which is developing messenger RNA-based therapies for cancer, infectious diseases, and more, went public at $23 a share in early December. The stock fell in its trading debut and has kept on tumbling since. It now trades for about $15 a share.

Wall Street analysts began putting out research reports on the biotech on Wednesday. The reports provide an overview of Moderna's business prospects and offer an estimate of what the stock is worth.

Much of Wall Street, including big-name firms Goldman Sachs and Morgan Stanley, has high hopes for the stock. Morgan Stanley had the highest price target among analyst notes reviewed by Business Insider, at $29.

"For us, we continue to view the strength of the platform as a major competitive advantage and see data as the clear way to address the bear case," Morgan Stanley wrote.

JPMorgan, which helped lead the IPO, was a notable exception. JPMorgan issued a price target of $22 on Wednesday, below Moderna's IPO price tag though still above where it's trading now.

Moderna's valuation is a 'sticking point' for JPMorgan

"The company's unprecedented valuation has been a sticking point," JPMorgan analyst Cory Kasimov said, given a crucial risk: that its messenger RNA medicines may not work. "While we acknowledge this is a long-term story, we believe weakness post-IPO presents a more enticing opportunity."

Key Moderna price targets include:

  • Morgan Stanley: $29
  • Oppenheimer: $27
  • Goldman Sachs: $25
  • JPMorgan: $22
  • Barclays: $20

Read more: Moderna tumbled in its Wall Street debut after the biggest IPO in biotech history

Turning the body into a drug factory

A key component of the excitement surrounding Moderna is its use of messenger RNA, which has long been seen as having enormous potential to treat disease.

The idea is that messenger RNA can turn the body into a drug factory, pumping out the proteins needed to fight a particular disease like a virus or cancer.

But turning that potential from theory to practice has been a challenge.

Moderna's approach centers on modifying a component of RNA called uridine so that internal bodily mechanisms won't get in the way of its drugs.

Other companies are also working in this area, but Moderna has wowed many on Wall Street with how much it has accomplished in a relatively short amount of time.

Moderna doesn't have any drugs on the market

The biotech was founded in 2010 and had just one employee when CEO Stéphane Bancel joined the following year.

Now, though, it has brought 21 drug-development programs along, 13 of which are a focus, and has ushered an impressive number of them into clinical trials, according to Oppenheimer analyst Leah Rush Cann.

"Moderna has advanced ten compounds into the clinic during this time, an unprecedented number during this time frame for any biotech company previously," Rush Cann said.

JPMorgan's Kasimov also praised Moderna's "disruptive platform with a formidable pipeline to match."

Notably, though, Moderna's medicines have not yet been reviewed or approved by US regulators and aren't expected to be for the next several years.

Oppenheimer's Rush Cann projects that Moderna could bring in its first product revenue in 2024 and estimates that revenue could balloon to $28 billion in 2030.

Barclays has the lowest price target for Moderna

Barclays analyst Geoff Meacham set a price target at $20 on Wednesday. His thinking: It gives investors a chance to get in now before more data from clinical trials read out.

Moderna declined to comment on the price targets.

Other investors have been more skeptical of Moderna's success. When sharing her 2019 predictions, Venrock partner Cami Samuels said she's expecting Moderna to exit at a $3 billion valuation. That's less than half of its valuation at the IPO and even further below where Moderna was trading on Wednesday, when it had about a $5 billion valuation.

"It's hard for me, looking at their pipeline, to figure out why they're valued five times, six times [as much as] other companies with the same pipeline," said Samuels, whose firm makes investments in technology and healthcare companies.

Join the conversation about this story »

NOW WATCH: Here's what happens to your brain when you get blackout drunk

We got 6 big predictions about how Amazon could disrupt healthcare from execs in the tech giant's backyard

Sun, 01/06/2019 - 12:16pm

  • Amazon has the $3.5 trillion US healthcare industry on edge waiting to see how the tech juggernaut will confront it.
  • On a recent trip to Seattle, we asked healthcare and life-science executives what they'd expect or be interested in seeing Amazon do in healthcare.
  • From forming a health-insurance company to making blood testing cheaper, here are their most fascinating ideas.

Amazon's moves into healthcare have already sent shockwaves through the healthcare industry.

News of its acquisition of PillPack in June, its plans for a joint healthcare venture with JPMorgan and Berkshire Hathaway, and its work supplying hospitals with health equipment have all sent would-be competitors into a tizzy.

And Amazon's not alone: Google, Facebook, and Apple have expressed interests in getting into healthcare too.

So far, it seems like we're still in the early innings of figuring out Amazon's healthcare ambitions, and the entire $3.5 trillion industry is on edge.

While on a recent trip to Seattle, Business Insider spoke to healthcare executives and life-science leaders and asked for their personal opinions about what they'd like or expect to see from the tech giant.

Starting a telehealth service

Xealth CEO Mike McSherry said one of the next steps he'd like to see the tech giant take would be to offer some sort of telemedicine service that could be bundled into Prime. Before running Xealth, McSherry spent his career working in mobile, founding companies including Boost Mobile and Swype.

"If I think where Amazon could go, I think they could do a nationwide telehealth service included in Amazon Prime," McSherry said.

Amazon could become a health insurer

McSherry listed everything Amazon already owns, from Whole Foods, to PillPack, to devices like Alexa that could one day be used to remotely monitor people. The information Amazon would be able to gather from all of those sources would give the company a fairly comprehensive picture of an individual.

That could be useful information should Amazon want to get into the health-insurance business.

"Ultimately, they could become an insurer themselves, because of their aggregate lifestyle view and risk stratification," McSherry said.

Read more: The hospital in Amazon's backyard has a plan to disrupt itself before being disrupted by big tech companies

Making it easier to get healthcare

Providence St. Joseph Health Chief Digital Officer Aaron Martin, a former Amazon employee, broadened the question.

"What you're going to see is their ability to take very close relationships that they've got with consumers and help give them easier access to care," Martin said.

One thing he doesn't see happening: big-tech players replacing hospitals and doctors' offices. Providence is a health system with 51 hospitals that made $23 billion in revenue in 2017. The health system has been working to make it easier for patients to see doctors, too.

"There's always going to be a role for these large health systems," Martin said.

However, it's on the health systems to make it easy for tech companies to work with them. "It would be harder for them to go in and retrofit a health system that hasn't made those types of investments," Martin said.

Engaging with patients

Matthew Trunnell, chief information officer at Fred Hutchinson Cancer Research Center, has his eye on Amazon's joint health venture with Berkshire Hathaway and JPMorgan and what might come out of that. The goal of the year-old health venture will be to find ways to lower healthcare costs for the companies' employees, though there haven't been many details about what that looks like.

"That's a way that they can look at a focused population around some things," Trunnell said.

That includes finding ways to get patients engaged in their health, which isn't an easy task. He said healthcare companies would have to figure out ways to keep in touch with patients who don't rely on talking to them about their health.

"How do you make that connection? How do you get people to want to interact? Because it turns out it's probably not getting them to care about their health," Trunnell said. "Except for a few acute times, that's not what people care about."

Cutting out the intermediaries

Generally though, he expects Amazon to do in healthcare what it's done to other industries: find ways to cut out intermediaries.

"Just looking at what they've done everywhere else they've gone. It's about how do you empower the consumer and disintermediate other elements?" Trunnell said.

Fred Hutch, for its part, has been tapping its tech neighbor's talent.

Amazon executive Mike Clayville is on Fred Hutch's board of trustees, and the organization is working on projects with Amazon like Comprehend Medical, which aims to sift through medical records to identify key words that researchers can then use to link patients with clinical trials.

Amazon could bring down the cost of blood testing

Dr. Lee Hood, Providence's chief science officer and the chief strategy officer and cofounder of the Institute for Systems Biology, has an idea for how Amazon could shake up healthcare: find a way to bring down the cost of blood testing.

While that may seem like a familiar story, it's something that still hasn't exactly been solved. The cost of genetic sequencing has come down dramatically over the past decade, but blood tests haven't had the same experience.

Hood, a legendary biologist who was instrumental in building technology to study genomics, currently advocates for prevention and wellness. Hood is the cofounder of a startup called Arivale, which provides wellness coaching that includes genetic- and blood-testing data points meant to track how healthy a person is. That's still an expensive task — Arivale's comprehensive program costs $199 a month.

The high price, Hood said, is thanks to the cost of blood testing. If that came down, it could make programs like Arivale cheaper.

"They could themselves bring the cost of these assays down incredibly," Hood said. "That would then make wellness accessible to people at all income levels."

Join the conversation about this story »

NOW WATCH: NASA sent an $850 million hammer to Mars and it could uncover clues to an outstanding mystery in our solar system

The global gender gap will take more than 100 years to close — here are the countries with the highest and lowest gender gap around the world

Sun, 01/06/2019 - 12:16pm

  • World Economic Forum says the global gender gap will take 108 years to close around the world.
  • When it comes to economic gender disparities, the gap will take in excess of 200 years to eliminate.
  • The WEF's survey shows that Iceland has the lowest gender gap, while the highest gap is in the civil war stricken state of Yemen.
  • USA ranked 51st globally, while the UK was 15th.

It will take more than 200 years for economic gender equality to emerge, and 108 years to completely close the global gender gap across politics, health, education, according to the latest report from the World Economic Forum.

The WEF's annual Global Gender Gap Report compares attitudes towards gender equality around the world. It considered factors such as educational opportunities available to each gender, life expectancy, literacy rates, the number of women in professional positions, and in positions of power in each country.

The WEF surveyed men and women in 149 countries to compile the list.

"Stagnation in the proportion of women in the workplace and women’s declining representation in politics, coupled with greater inequality in access to health and education, offset improvements in wage equality and the number of women in professional positions, leaving the global gender gap only slightly reduced in 2018," the World Economic Forum's report said.

Each nation is given a score out of 1, with higher scores indicating a greater level of gender equality. The USA was right in the middle of the pack with a score of 0.72, ranking 51st out of 149 nations.

Check out the best and worst countries for gender equality, as well as the global averages, below:

SEE ALSO: 6 charts show how much more men make than women

DON'T MISS: This is what could happen if Roe v. Wade fell

Join the conversation about this story »

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

The 50 US states ranked from most to least healthy

Sun, 01/06/2019 - 12:16pm

  • United Health Foundation has ranked America's 50 states based on how healthy they are. 
  • The group used criteria including obesity and smoking as well as environmental factors like child poverty and air pollution.
  • Hawaii was declared the healthiest state of 2018, while Louisiana was the unhealthiest. 

Not all states are created equal when it comes to health. 

To get a better sense of how healthy each state in the US is, for the 29th year in a row, the United Health Foundation has ranked America's states.

Hawaii made the top of the list as America's healthiest state, while Louisiana was declared the unhealthiest.

Looking at data from the Centers for Disease Control and Prevention, the American Medical Association, and the Census Bureau, the rankings took into account everything from obesity and smoking to community and environmental factors, such as child poverty and air pollution, to public policies like immunizations, and health outcomes like cancer deaths and diabetes.

Here are all 50 states, ranked from healthiest to least healthy. 

1. Hawaii has a low prevalence of obesity and smoking, and low air pollution, helping it clinch the top spot for the ninth time since the rankings began in 1990.

2. Massachusetts held the spot as the healthiest state in 2017 but dropped down in 2018. The state has among the highest immunization rates and the lowest uninsured rate.

3. Connecticut has one of the lowest rates of smoking in the country and has one of the lower percentages of uninsured people. But the state does have a higher rate of drug overdose deaths.

See the rest of the story at Business Insider

The hospital in Amazon's backyard has a plan to disrupt itself before being disrupted by big tech companies

Sun, 01/06/2019 - 12:15pm

  • Providence St. Joseph Health is plotting new ways to use technology to — as Chief Digital Officer Aaron Martin puts it — "self-disrupt."
  • In an office in downtown Seattle, the health system is working on ways to use technology to help itself run smoother.
  • Its initiatives and spin-off companies are spreading to other hospitals around the US.

SEATTLE — On the 11th floor of an office building at the corner of 5th and Columbia in downtown Seattle, there isn't a cubicle in sight.

Engineers are gathered for a Monday-morning meeting. Their colleagues working remotely are beamed in on a screen. There are sticky notes. There's a ping-pong room.

It's not a scene you expect when you think of a health system that manages 51 hospitals. And the space is certainly a departure from the offices Providence St. Joseph Health has at its headquarters, just 12 miles away in a corporate office park filled with cubicles in Renton.

It's here that Providence is plotting out new ways to use technology to — as Chief Digital Officer Aaron Martin puts it — "self-disrupt."

The health system has been turning to its high-tech neighbors for executive hires over the last five years as it works to improve its operations, bringing on executives like Martin, who comes from Amazon, as well as Microsoft veterans. The hope is to use technology to make the health system run smoother, whether that's through primary-care scheduling or making a better internal directory.

It's happening at a time when big-tech players like Amazon and Google are getting interested in tackling healthcare. Amazon, for instance, in November announced it would offer a service called Amazon Comprehend Medical to hospitals, insurers, and pharmaceutical companies to help them analyze their health-records data. The company also bought pharmacy startup PillPack in 2018, marking its entrance into prescription-drug delivery.

Alphabet, Google's parent company, has a number of bets in healthcare, ranging from Verily, its life-sciences arm that's developing surgical robots, to Calico, its life-extension spin-off.

Read more: The $23 billion health system in Amazon's backyard just hired a new chief information officer from Microsoft

Martin joined Providence five years ago after working as a director at Amazon on the Kindle.

"I was at Amazon minding my own business," Martin recalled. Occasionally, a recruiter he knew would reach out with a job opportunity. One day, he called with an odd one: a job in nonprofit healthcare.

So he met with Providence CEO Rod Hochman and Mike Butler, president of operations and services, who gave him their vision for the future of the health system amid all the changes happening as the Affordable Care Act was implemented.

"It must be something about the water in Seattle, because it was like talking to technology executives there," Martin said. He said the two of them understood that tech disruption would be coming to healthcare.

"Their whole point of view was, if we don't disrupt ourselves, somebody else will."

Martin now oversees all the software development and marketing at Providence as well as its venture arm. The venture arm has turned out to be a key part of the health system's strategy.

The ideas for the companies typically come from within the health system. Providence's venture arm has helped found Kyruus, a software tool that matches doctors with patients, and Xealth, a company that helps doctors prescribe digital tools and medical equipment to patients, much like they'd prescribe a pill. Providence currently has 15 companies in its portfolio.

Other health systems have taken note of the work, and about 84 have come by Providence to check it out over the past two years, Martin said.

Because other regional hospitals — which aren't competing with Providence — face similar issues, it can be simple to apply the same technology to another organization.

Combining forces lets the hospitals punch above their weight. Individually, they have fewer resources than tech giants like Microsoft or Amazon. Providence, for instance, generated about $23 billion in revenue in 2017. Microsoft's revenue was about $90 billion in its 2017 fiscal year.

Working together, however, can make implementing helpful technology much simpler.

"If we've implemented the solution, typically it just becomes a matter of data-sharing with other health systems," Martin said.

Growing out Xealth

Xealth CEO Mike McSherry was an entrepreneur-in-residence at Providence's downtown tech offices starting in 2015 after a career working in mobile. McSherry and his team ran through about 70 ideas, some of which were difficult to put into action.

Eventually, he settled on building a platform to allow doctors to prescribe digital elements of care, whether that be articles to read, a diabetes program like Virta or Omada, or a list on Amazon of over-the-counter medical supplies you might need to buy. It's built directly into the patient's electronic medical record.

Initially, Xealth began within Providence's system. When the University of Pittsburgh Medical Center came by for a demo during its prototype phase, the health system was sold as well.

The company was eventually spun out of Providence and got backing from venture capitalists including DFJ as well as the first four hospitals that took part in its pilot program. Xealth's offices moved out of Providence's downtown location and down the hill to Seattle's historic Smith Tower.

It's part of Martin's strategy to get it right in-house, pilot with a few other regional hospitals, then get a third-party VC involved to lead a round that can help the company grow further.

Fred Hutchinson meets its tech neighbors

Providence isn't the only Seattle medical organization leaning into its tech surroundings. When Matthew Trunnell, now the chief information officer at Fred Hutchinson Cancer Research Center, joined about three years ago after a stint at the Broad Institute in Cambridge, Massachusetts, there wasn't a whole lot going on between Fred Hutch and the organization's Seattle neighbors.

"The tech neighborhood had not been exploited," Trunnell said.

Since then, the research center has added Microsoft CEO Satya Nadella and Amazon executive Mike Clayville to its board of trustees.

Fred Hutch has been working on projects with Amazon like Comprehend Medical, which is working to sift through medical records to identify key words that researchers can then use to link patients up to clinical trials.

"This is the right time," Trunnell said.

Join the conversation about this story »

NOW WATCH: The reason some men can't grow full beards, according to a dermatologist

Here's why Bristol-Myers Squibb's record-breaking $74 billion biotech deal is facing investor backlash (BMY, CELG)

Sun, 01/06/2019 - 12:15pm

  • Bristol-Myers Squibb said on Thursday that it would acquire the biotech Celgene in a $74 billion deal.
  • The two companies each face their own strategic problems, and Wall Street analysts questioned whether a combination would produce solutions.
  • A person familiar with the deal told Business Insider that it was intended to lower each company's risk.

Bristol-Myers Squibb's $74 billion acquisition of the biotech Celgene is the biggest deal not just of 2019, but ever in the pharmaceutical sector. But investors are asking whether the unexpected combination will help the two companies confront the big challenges they're facing.

In a conference call on Thursday morning, the companies repeatedly described the deal as a unique, complementary opportunity. They said it would make the combined company a leader in treating cancer, inflammation, and heart disease.

"I would view it as there was one company" that Bristol-Myers Squibb was going to acquire, its chief financial officer, Charles Bancroft, told Business Insider.

Paul Biondi, a senior vice president, agreed, adding, "It's always been Celgene."

The two companies are both major players in the industry and have similar strategies. Bristol-Myers Squibb and Celgene have each sought to carve out disease areas that they can dominate with treatment options and make a profit from. But they are also facing questions about whether they can pull it off, especially because some of their key treatments are facing new competition.

Bristol-Myers Squibb's shares tumbled more than 13% after the deal was announced, and analysts peppered the company's executives with tough questions on the call.

"We are surprised that this deal occurred," said Alethia Young, a Cantor Fitzgerald analyst. "We are also interested that Celgene wasn't acquired for more."

The deal valued Celgene at $102.43 a share, while Cantor Fitzgerald's base expectation for a target price was $100, Young said. Celgene shares, which had dropped over the past three months, surged 26% on Thursday morning, to about $83.91.

JPMorgan was the lead financial adviser to Celgene, while Morgan Stanley was the lead financial adviser to Bristol-Myers Squibb.

Investors surveyed by the Mizuho analyst Salim Syed expressed skepticism about the deal. Of about 100 people who responded, more than 50% said they were not happy with the news.

Including debt, the deal is the largest ever in pharma, topping even Pfizer's 1999 acquisition of Warner-Lambert and last year's Takeda-Shire deal, according to Bloomberg News. If the deal goes through, Bristol-Myers Squibb and Celgene will go from the 13th- and 21st-biggest biopharma companies by revenue to the seventh-largest, according to an Informa Pharma Intelligence analysis.

Facing competition for some of its most reliably profitable products, Celgene has struggled to develop new drugs to take their place. Meanwhile, Bristol-Myers Squibb has faced challenges in its effort to become a leader in lung cancer drugs.

Reducing each company's reliance on a limited number of drugs was the intent of the acquisition, a person who worked on the deal told Business Insider.

The two companies began their discussions in September, though they had had other conversations before, and there was a clear fit, the person said.

"Each of the two companies had a little too concentrated risk, and this lowers that," the person said. "Too much riding on too concentrated a set of things. Now that's broader."

Analysts pressed the companies' leadership about those risks during the Thursday call.

They asked about the deal's timing, given that Bristol-Myers Squibb has several upcoming releases of new trial results for its key cancer drug Opdivo that could affect the drug's prospects, as well as about expectations for the cancer drug Revlimid, a blockbuster product for Celgene that is set to face competition.

In response, Bristol-Myers Squibb CEO Giovanni Caforio described a leading presence that the combined company would have in oncology, with products that treat both solid tumors and cancers in the blood.

He also emphasized the new drugs that the deal would add to Bristol-Myers Squibb's pipeline.

"We now have six near-term launch opportunities, and I stress the term 'near-term' — a number of those are imminent files that are going to be submitted to regulatory authorities," Caforio said. "I think about Revlimid as a really important product, a foundation on which we can maintain leadership in hematology, but this deal is not about Revlimid."

The timing of the deal was even strategic, Biondi told Business Insider on Thursday, building "upon incredibly strong events in our business."

"The opportunities to do these things are often quite small because a lot of things can change," he added.

Related: Bristol-Myers Squibb and Celgene said their huge merger has about $2.5 billion in synergies. That should make employees nervous.

The combined company could also try Celgene's cutting-edge cell therapies in combination with cancer drugs called checkpoint inhibitors, and test combinations of different drugs in autoimmune diseases like inflammatory bowel disease, ulcerative colitis, and Crohn's disease, management said on the call.

More broadly, Caforio said, having a "critical mass" across different types of diseases will be important no matter what happens with US health policy, improving the company's position in negotiations with health insurers and employers.

Join the conversation about this story »

NOW WATCH: NASA sent an $850 million hammer to Mars and it could uncover clues to an outstanding mystery in our solar system

'Aquaman' is now the top worldwide grossing movie in the DC Comics Extended Universe, taking in over $940 million

Sun, 01/06/2019 - 11:57am

  • With a worldwide box office total of $940.7 million, "Aquaman" is now the biggest global earner ever of any DC Comics Extended Universe release.
  • The movie passes previous leader, "Batman v Superman: Dawn of Justice" ($873.6 million).
  • "Aquaman" isn't doing bad domestically either, with a $30.7 million take this weekend it has won the box office for three-straight weeks.

Warner Bros. is finally cashing in on its DC Comics Extended Universe (DCEU) — and it's the most unlikely superhero that's bringing home the bacon.

After making chum of Disney's "Mary Poppins Returns" and Paramount's "Bumblebee" over the holidays, "Aquaman" has continued its dominance as we go into the new year. The superhero that controls the oceans has won the domestic box office for the third-straight weekend with a strong estimated $30.7 million. That puts the movie's domestic total at $259.7 million. But its worldwide take is even more impressive.

With a global gross of $940.7 million, "Aquaman" is now the highest-grossing movie in the DCEU, blowing past previous worldwide leader "Batman v Superman: Dawn of Justice" ($873.6 million).

"Wonder Woman" still tops the best domestic box office for a DCEU movie with $412.5 million.

The next step for James Wan's hit movie is to become the first DCEU movie to make $1 billion at the worldwide box office. The milestone seems inevitable.

Read more: "Aquaman" director James Wan thinks its a "f------ disgrace" that the movie was snubbed for a visual-effects Oscar nomination

That would then put it in the stratosphere of the top-earning DC movies ever, a category that includes Christopher Nolan's "The Dark Knight" and "The Dark Knight Rises," which both earned over $1 billion worldwide in their theatrical runs.

With little competition at the multiplex in January until M. Night Shyamalan's highly anticipated "Glass" opens January 18, expect another win for "Aquaman" next week. 

Meanwhile, the only major new release in theaters this weekend didn't do poorly despite "Aquaman's" success.

Sony's "Escape Room" took in $18 million to come in second place this weekend at the domestic box office. The thriller was only made for $9 million.

SEE ALSO: A bootleg version of hit Japanese zombie movie "One Cut of the Dead" showed up on Amazon Prime Video and insiders worry it has put a US release in jeopardy

Join the conversation about this story »

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

About Value News Network

Value is the only commonality in an increasingly complex, challenging and interdependent world.
Laurance Allen: Editor + Publisher

Connect with Us