News Feeds

How MoviePass went from a Hollywood disrupter to flat broke in 18 months

Tue, 08/06/2019 - 5:07pm  |  Clusterstock

  • A four-month investigation by Business Insider chronicles the rise and fall of the movie-ticket-subscription startup MoviePass.
  • The $10-a-month price change done in August of 2017 helped MoviePass become a sensation, but it also led to the ousting of its founder Stacy Spikes — and the use of questionable tactics to keep the company afloat.
  • Visit Business Insider's homepage for more stories.


For a fleeting moment, MoviePass was the biggest disrupter in the movie business. 

The movie-ticket-subscription startup gobbled up millions of subscribers when it lowered its monthly subscription price from around $50 a month to $10. But in just 18 months, the company was an afterthought. 

A four-month investigation by Business Insider chronicles the rise and fall of MoviePass.

We start at its scrappy beginnings with founder Stacy Spikes, who, after getting no support from the major theaters for years, created from scratch a service that let anyone see any movie they wanted at any theater thanks to a pre-paid debit card. We continue the story as the company, starving for money, is taken over by Florida businessman Ted Farnsworth and his firm, Helios and Matheson Analytics. In August 2017, Farnsworth comes up with the idea of changing the price to $10 a month to see if the startup can become the Netflix of cinemas.

That price drop leads to the ousting of Spikes, who never believed in the $10-a-month plan working, and MoviePass burning through hundreds of millions of dollars to keep going. But MoviePass' new leadership has fun in the process, throwing events at Coachella in 2018 that bring out the likes of Dennis Rodman (who shows up in a MoviePass helicopter), and hiring Jerry Media to do the company's social media (the same Jerry Media that handled social media for the doomed Fyre Festival).

But when money gets really thin, MoviePass CEO Mitch Lowe and Farnsworth use questionable tactics to keep the company going, like blocking subscribers out of their accounts, according to multiple sources Business Insider spoke to for this story.

Subscribe to Business Insider Prime to read the definitive story of how MoviePass imploded and burned through hundreds of millions in the process.

SEE ALSO: Every movie The Rock has starred in, ranked by how much money they made at the US box office

Join the conversation about this story »

NOW WATCH: Pixar has a secret formula for making perfect films. Here are 5 rules that make its movies so special.

These 16 stocks are set to crush the market in August

Tue, 08/06/2019 - 5:06pm  |  Clusterstock

  • Wedbush Securities published an update to its "Best Ideas List," which features the firm's top stock picks for the month of August. 
  • The firm's analysts picked their favorite stocks across the industries they cover, including software, technology, retail, and financial services, among other sectors. 
  • Here are 16 stocks poised to outperform the market in August, according to Wedbush. 
  • Visit the Markets Insider page for more stories.

Wedbush Securities recently released an update to its "Best Ideas List," which features a collection of the firm's top stock picks for the month of August. 

Wedbush analysts selected their favorite stocks within their coverage areas, and the list features companies across the software, technology, retail, and financial-services industries. 

Each pick is accompanied by a price target from the firm's analysts, and Markets Insider calculated an implied upside using that data. That represents the potential return from the current share prices to the forecasted price targets in the report.

Here are 16 companies that could dominate the market in August, according to Wedbush. They're listed in increasing order of expected upside from current levels. 

Markets Insider is looking for a panel of millennial investors. If you're active in the markets, CLICK HERE to sign up.

16. Fidelity National Information Services

Ticker: FIS

Industry: Financial Services

Price: $129.70

Price target: $140

Implied upside: 7.94%

Source: Wedbush Equity Research


15. Ares Capital Corp

Ticker: ARCC

Industry: Financial Services

Price: $18.27

Price target: $20

Implied upside: 9.47%

Source: Wedbush Equity Research

14. Fifth Third Bancorp

Ticker: FITB

Industry: Banking

Price: $26.90

Price target: $32

Implied upside: 18.96%

Source: Wedbush Equity Research

13. Activision Blizzard

Ticker: ATVI

Industry: Video games

Price: $46.92

Price target: $56

Implied upside: 19.35%

Source: Wedbush Equity Research

12. Microsoft

Ticker: MSFT

Industry: Technology

Price: $133.44

Price target: $160

Implied upside: 19.90%

Source: Wedbush Equity Research

11. Tempur Sealy International

Ticker: TPX

Industry: Mattresses

Price: $75.57

Price target: $93

Implied upside: 23.06%

Source: Wedbush Equity Research


Ticker: WIX

Industry: Web development

Price: $142.91

Price target: $180

Implied upside: 25.95%

Source: Wedbush Equity Research

9. Pegasystems

Ticker: PEGA

Industry: Software

Price: $69.51

Price target: $90

Implied upside: 29.48%

Source: Wedbush Equity Research

8. Royal Caribbean Cruises

Ticker: RCL 

Industry: Cruise line

Price: $106.73

Price target: $140

Implied upside: 31.17%

Source: Wedbush Equity Research

7. PayPal

Ticker: PYPL

Industry: Payments

Price: $104.75

Price target: $140

Implied upside: 33.65%

Source: Wedbush Equity Research

6. Salesforce

Ticker: CRM

Industry: Software

Price: $142.43

Price target: $192

Implied upside: 34.80%

Source: Wedbush Equity Research

5. Electronic Arts

Ticker: EA

Industry: Video games

Price: $89.85

Price target: $122

Implied upside: 35.78%

Source: Wedbush Equity Research

4. Advance Auto Parts

Ticker: AAP

Industry: Auto-parts

Price: $143.97

Price target: $200

Implied upside: 38.92%

Source: Wedbush Equity Research

3. New Relic

Ticker: NEWR

Industry: Software

Price: $82.91

Price target: $124

Implied upside: 49.56%

Source: Wedbush Equity Research

2. The Children's Place

Ticker: PLCE

Industry: Retail

Price: $86.53

Price target: $130

Implied upside: 50.24%

Source: Wedbush Equity Research

1. Foot Locker

Ticker: FL

Industry: Retail

Price: $39.48

Price target: $64

Implied upside: 62.11%

Source: Wedbush Equity Research

Scammers are sending out fake IRS letters to taxpayers demanding money — here's how to spot a fraud

Tue, 08/06/2019 - 5:02pm  |  Clusterstock

  • The IRS has warned taxpayers about a scam in which letters are being mailed to taxpayers from a fake agency called the "Bureau of Tax Enforcement" demanding immediate payments. Some even mention the IRS.
  • A tax lawyer says any legitimate IRS letter or notice will have an official seal and a notice or letter number, among other distinguishing markers.
  • If you determine your letter or notice from the IRS is real, don't ignore it.
  • Visit Business Insider's homepage for more stories.

The IRS prefers to get in touch with taxpayers via snail mail, and scammers know it. 

The Internal Revenue Service is in the thick of correspondence season, reported tax lawyer Kelly Phillips Erb for Forbes. It's the period when the agency sends out letters, typically via the US Postal Service, requesting late payments and notifying taxpayers of errors on their returns.

But just because you receive a formal-looking piece of mail about your taxes doesn't mean you should take it as fact. The best way to ensure you don't end up a victim of fraud is to remain vigilant and skeptical, during and after tax season.

Earlier this summer, the IRS warned taxpayers about a popular scam in which fraudsters mail letters to taxpayers from a non-existent group called the "Bureau of Tax Enforcement" requesting immediate payments. Some letters even mention the IRS and may include factual tax information.


"That's scary for taxpayers because it feels legitimate, but keep in mind that some tax-related information, like liens that have been filed against taxpayers, may be available to the public," Phillips Erb wrote. "Don't be frightened into giving up cash or personal information just because a scammer knows one or two facts about you."

According to Phillips Erb, a real letter from the IRS will have a few distinguishing markers, such as an official IRS seal, a notice or letter number in the top right corner of the paper, information about your rights as a taxpayer, and a phone number to contact the IRS directly. Perhaps most telling, if the letter is asking for a gift card, cash, or check to be sent to any person or organization other than the US Treasury, it's fraudulent.

You can always confirm the validity of an IRS notice or letter by creating or logging into an existing account on the IRS website, or calling the agency directly. If you determine the letter or notice is legitimate and is requesting you either confirm a change, provide information, or make a payment, don't ignore it.

"The worst thing someone can do when an IRS notice comes is nothing," Nina Olson, a tax lawyer and the former National Taxpayer Advocate, recently told the Wall Street Journal. "Take it from me: If you get a letter, call the IRS. If the agency doesn't agree with you, find out your rights. If you don't act, they can ramp up enforcement."

You should always report IRS-related phishing attempts and fraud to the Treasury Inspector General at 800-366-4484 or

Join the conversation about this story »

NOW WATCH: What El Chapo is really like, according to the wife of one his closest henchman

Disney slumps as earnings and sales miss expectations despite box-office hits

Tue, 08/06/2019 - 4:46pm  |  Clusterstock

  • Disney reported third-quarter financial results after market close on Tuesday that missed analyst expectations for both revenue and profit. 
  • The conglomerate's movie studio reported revenue of $3.86 billion during the period, falling short of the $4.56 billion estimate from analysts. 
  • Shares of Disney fell 4% on the results. 
  • Watch Disney trade live.
  • Visit the Markets Insider homepage for more stories.

Disney's third-quarter results missed Wall Street's forecasts despite the media giant's movie studio breaking several box-office records this year. 

Here are the key numbers: 

  • Revenue: $20.25 billion, compared with $21.44 billion expected by analysts.
  • Earnings per share: $1.35, compared with $1.75 expected by analysts.
  • Net income: $1.45 billion, compared with $2.9 billion expected by analysts. 

"Our third-quarter results reflect our efforts to effectively integrate the 21st Century Fox assets to enhance and advance our strategic transformation," CEO Bob Iger said in a statement.

Shares of Disney fell 3.51%, or about $5, on the results. 

Disney's studio-entertainment division recorded revenue of $3.86 billion, as the company released several box-office hits during the quarter, including "The Lion King," "Aladdin," and "Avengers: Endgame." Analysts expected studio revenues to be $4.56 billion. 

Marvel's "Avengers: Endgame" rose to become the highest-grossing movie of all time, with more than $2.79 billion in worldwide ticket sales in July. Disney's box-office revenues also surpassed $8 billion for the year, breaking the record for total annual box-office sales for a movie studio. 

Amid the titles' successes, Disney recorded corporate expenses and restructuring charges linked to its integration with 21st Century Fox. 

Media networks generated $6.7 billion in revenue for the period, and Disney's parks, experiences, and products segment accounted for $6.57 billion in sales. Direct-to-consumer and international revenues came in at $3.85 billion, an increase of more than 100% from the same period last year. 

The results come a few months before Disney is expected to roll out Disney Plus, a streaming platform that will include movies from the Marvel, "Star Wars," and Pixar franchises, in addition to a variety of TV series from the company's vast content library. The service is expected to cost $6.99 per month and will include content from Disney's $71 billion acquisition of Fox. 

Disney was up 24.6% year to date through Tuesday's close. 

Join the conversation about this story »

NOW WATCH: What El Chapo is really like, according to the wife of one his closest henchman

Opioid distributors accused of fueling the national epidemic sink after offering a $10 billion settlement (ABC, MCK, CAH)

Tue, 08/06/2019 - 4:38pm  |  Clusterstock

  • Opioid distributors McKesson, Cardinal Health and AmerisourceBergen tumbled more than 7% at their lows on Tuesday after a Bloomberg report said the companies offered $10 billion to settle claims that they fueled the nation's drug epidemic.
  • The offer was met with a $45 billion counter from the National Association of Attorneys General, according to Bloomberg.
  • Any settlement would take decades to be fully paid out, people familiar with the talks said.
  • Read more on Markets Insider.

Opioid distributors McKesson, Cardinal Health, and AmerisourceBergen all fell as much as 7% at their intraday lows on Tuesday after a Bloomberg report said their $10 billion settlement offer was met with a $45 billion counter from the National Association of Attorneys General.

The lawsuits claim the companies helped fuel the US drug epidemic, and the NAAG is officiating talks for more than 35 states. A settlement would be used to cover costs from opioid addiction and overdoses, Bloomberg reported.

The recent developments mark the first time such a settlement has been quantified by the three companies in two years of talks. It's not known whether the two sides can agree on a figure. The settlement — whether it more closely resembles the companies' proposal or the states' demands — would be paid out over decades, according to people familiar with the talks.

McKesson fell as much as 7.2% Tuesday while Cardinal Health stumbled as much as 7.6%. AmerisourceBergen dropped as much as 6.7%.

Markets Insider is looking for a panel of millennial investors. If you're active in the markets, CLICK HERE to sign up.

The opioid distributors also face more than 2,000 lawsuits from US cities and counties related to the opioid epidemic, according to Bloomberg. A separate team of lawyers are handling those cases.

A worldwide settlement payment for all opioid distributors and manufacturers could cost as much as $55 billion, analysts at Nephron Research told Bloomberg. A Wells Fargo analyst estimated the final payment could come in at nearly $100 billion.

McKesson closed at $139 per share Tuesday. The company is up about 26% year-to-date.

Cardinal Health closed at $42.92 per share. The company is down about 4% year-to-date.

AmerisourceBergen closed at $84.11 per share. The company is up about 13% year-to-date.

Now read more markets coverage from Markets Insider and Business Insider:

Goldman Sachs predicts the Fed will do something thought unthinkable just a month ago

After series of dramatic escalations, Trump suggests the trade war with China could last until 2020

A YouTube creator breaks down the ad revenue rates for each of her 3 channels, and why one is a lot higher

Join the conversation about this story »

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

Stocks bounce back from their worst rout of the year after China stabilizes its currency

Tue, 08/06/2019 - 4:26pm  |  Clusterstock

  • US stocks recovered on Tuesday from their worst day of 2019 after China's central bank moved to stabilize its currency overnight.
  • Major US indexes tanked on Monday after China retaliated against President Trump's new tariffs by allowing the value of the yuan to slip below 7 yuan-per-US dollar, a key psychological level. 
  • China raised the yuan's official reference point back above that threshold Tuesday, and said it has no intention of lowering the value of its currency in order to be competitive. 
  • Visit the Markets Insider homepage for more stories.

Stocks rebounded from their worst day of the year on Tuesday amid easing trade-war fears. The relief came after China's central bank took steps to bring its currency back above a key psychological threshold against the US dollar.

China let the value of the yuan slip below 7 yuan-per-US dollar on Monday, which sent major US indexes plunging as much as 3% on escalated trade-war fears. President Trump accused China of improperly influencing its currency, and the US Treasury Department officially declared China a currency manipulator on Tuesday. 

The People's Bank of China quickly moved to raise the yuan's reference point above the key level and said it wouldn't lower the value of its currency in order to be competitive, which sparked a rally in US stocks that recouped some losses from Monday's sell-off.

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

Markets Insider is looking for a panel of millennial investors. If you're active in the markets, CLICK HERE to sign up.

The president also suggested in a tweet on Tuesday that the US could remain locked in a trade war with China into 2020 after the country abandoned its agreement to purchase more American farm products. 

"Our great American Farmers know that China will not be able to hurt them in that their President has stood with them and done what no other president would do," Trump wrote in his tweet. "And I'll do it again next year if necessary!"

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

And the largest decliners:

Take-Two Interactive climbed 8% on Tuesday after reporting stronger-than-expected second quarter earnings that were boosted by the continued popularity of the Grand Theft Auto franchise. The game developer rebounded from a dip in video game stocks brought on President Trump comments which linked violent video games to mass shootings. 

Shares of Aurora Cannabis jumped as much as 16% after the weed producer announced it expects revenue in the fourth quarter of 2019 to be between C$100 million and C$107 million, compared to C$19.1 million last year. 

The S&P 500's tech index, which took the biggest hit on Monday due to big tech company's exposure to China, rose 1.6%. The financials sector followed with gains of 1.5%. Energy posted the only losses, dropping 0.1%.

Join the conversation about this story »

NOW WATCH: Animated map shows where American accents came from

The definitive story of how a controversial Florida businessman blew up MoviePass and burned hundreds of millions

Tue, 08/06/2019 - 4:02pm  |  Clusterstock

  • A four-month investigation by Business Insider chronicles the rise and fall of the movie-ticket-subscription startup MoviePass.
  • We tell the story of cofounder Stacy Spikes, who sought to shake up the tired movie-theater business by starting a subscription service.
  • Enter Florida businessman Ted Farnsworth, who injected much-needed cash into the company and introduced the risky idea of lowering the monthly subscription price to an impossibly low $9.95 a month.
  • The price change helped MoviePass become a sensation, but it also led to the ousting of Spikes — and the use of questionable tactics to keep the company afloat.
  • Visit Business Insider's homepage for more stories.

As the sun set on June 14, 2018, John Travolta stood outside Manhattan's SVA Theatre. He'd arrived for the premiere of "Gotti," a biopic of infamous Mafia kingpin John Gotti in which Travolta played the starring role.

Greeting Travolta on the red carpet were Ted Farnsworth and Mitch Lowe, two businessmen who'd made the release possible after they'd taken an equity stake in the film months earlier.

But if Travolta knew who they were, his blank expression in the photos he took with them didn't show it. In fact, if the actor knew more about them, he'd likely have wondered why they were grinning ear to ear.

Farnsworth was the CEO of Helios & Matheson Analytics, the parent company of MoviePass, the buzzy movie-ticket-subscription service with ambitions of becoming the next Netflix. Lowe was the CEO of MoviePass. And "Gotti" represented their next big move: moviemaking.

But MoviePass was burning through millions of dollars to keep up with subscriber demand. Lowe and Farnsworth, meanwhile, were blocking subscribers out of their accounts and misleading investors, according to multiple former employees — desperate measures designed to keep the company alive.

There was one conspicuous absence at the premiere: Stacy Spikes, the entrepreneur who founded MoviePass in 2011.

This spring when I met with Spikes, 51, he still had the slim figure, thin-framed glasses, and big smile he had back when he was hustling to put MoviePass on the map. His dream: a service that allowed you to see everything from summer blockbusters to art-house fare at any time for a monthly fee.

For a while, amid numerous fits and starts and funding crises, it worked. Then, in January 2018, just as MoviePass added its millionth subscriber, Farnsworth and Lowe fired him.

Surprisingly, Spikes wasn't bitter. "How we got there was messy, but innovation is always messy," he said.

Now, 18 months after Spikes' departure, the once high-flying company is practically dead after losing millions of subscribers in less than two years. Since July 4, MoviePass has been shut down to resolve "technical problems."

Secrecy hangs over what remains of MoviePass, a company that misled both subscribers and investors, and, according to multiple former employees, made many employees extremely uncomfortable. Hundreds of pages of SEC documents show, in clinical detail, the gobs of money the company spent trying to keep the lights on, and just how little it was generating.

Through interviews with over a dozen sources who worked at the company or had a close association with it — many of whom spoke on condition of anonymity because of the nondisclosure agreements they signed — I learned how an idealistic founder's desperate search for cash to keep his company alive led to its swift downfall.

Aggressive marketing and questionable practices

Stacy Spikes always loved movies. As a high-school kid growing up in Houston, Texas, he worked at a video store. In his 20s, he helped market film soundtracks at Sony. By 1994 he was vice president of marketing at Miramax. In 1997 he founded the Urbanworld Film Festival, which featured the work of diverse filmmakers, including future stars like Ava DuVernay and Malcolm D. Lee.

The festival's success got Spikes and executives with Loews Cineplex, one of the big movie chains at the time, thinking. "You could see Netflix, Spotify, Pandora, Hulu — this whole subscription wave was on the horizon," Spikes said. "So it was, like, why not make a subscription for moviegoing?"

MoviePass began with Spikes, a team of five scrappy 20-something developers, and a phone.

In 2005, they created an SMS-based prototype for purchasing tickets, but they couldn't get a major chain to give it a try. Things seemed to turn around after Spikes brought on Hamet Watt as a cofounder. Together they raised a combined $1 million from AOL and True Ventures, a San Francisco venture-capital firm.

But when a launch on July 4, 2011, was scrapped because of lack of interest from theaters, Spikes had to start over.

First Spikes and his team had to find a way around the big chains. To do that they devised a prepaid credit card. Using the app, subscribers would find a theater, select a movie and screening time, then go to the kiosk and order the ticket using the prepaid card. Essentially, the company paid back the theaters the full ticket price for the movies that its subscribers were seeing.

The MoviePass team also still needed to perfect its tech to match the user with the right theaters. So the developers built a geo-location system from scratch, plugging in the longitude and latitude of the front door of every movie theater in America.

The 90-day effort nearly bankrupted the company. But in February 2011, an impressed True Ventures greenlighted $1.5 million in funding. Subscription numbers jumped from 5,000 in 2012 to 10,000 by 2015. But even then, the company continued to sputter after a deal with AMC fell through in 2016.

Desperate for cash, MoviePass held a series of meetings in New York in the summer of 2017 with prospective investors. Ted Farnsworth attended one of the meetings.

A tad under 6 feet tall, Farnsworth resembles an economics professor more than a cutting-edge entrepreneur. He's balding, wears stylish thick-rimmed glasses, and often dresses in business-casual attire with the sleeves rolled up to his elbows.

"He comes off as a bumbling, lovable, sort of optimistic guy," one former MoviePass employee said. "He wants to be your best friend. He's always on."

Another former staffer put it differently: "The first conversation I had with Ted I left thinking, 'This guy is a con artist.'"

Read more: Bitter enemies MoviePass and AMC once worked together. Here's a look inside the relationship's epic collapse.

Over the past three decades, Farnsworth has registered more than 50 companies in Florida, including a psychic hotline started in 1998. Fronted by La Toya Jackson, the company's name, the "Psychic Discovery Network," appeared in a notice from the Federal Communications Commission of pay-per-call services that had received more than 50 complaints.

Numerous companies that went public while Farnsworth was at the helm were valued at less than a $1 a share within three years. Only four of his companies remain in operation today. Farnsworth himself has been cited 11 times for failing to pay federal income taxes on time.

Yet Farnsworth never seemed to have a problem failing up. In 2017, he became the CEO of data company Helios & Matheson Analytics. According to its website, the company specializes in "insights into social phenomena." But, like Farnsworth, it too had a troubled past. In 2016, its India-based former parent company was accused of defrauding thousands of investors.

Farnsworth's pitch to MoviePass: $25 million for 51% of the company, two seats on the five-member board, and a promise to drop the monthly subscription price, temporarily, from $50 to $9.95, with the goal of hitting 100,000 subscribers. If all went well, the next step would be taking MoviePass public.

But Farnsworth's plan worried Spikes; to him, $10 a month was too low. At that price MoviePass would start losing money when a subscriber used the service more than once a month.

Why Farnsworth settled on $10 is unclear. Several people told me he wanted a price that would grab headlines. Some simple arithmetic should have dissuaded him.

In the US, the average price for a movie ticket is about $9; if a customer ordered a ticket every day for a month (the maximum the MoviePass plan allowed), it would cost MoviePass about $270, of which the subscriber's fee would cover just $10.

But in July 2017, the MoviePass board agreed to the deal. And on August 15, the price drop went into effect. Thanks to word-of-mouth buzz and press attention, within two days subscriptions jumped from about 20,000 to 100,000. MoviePass had transformed from a scrappy startup trying to keep the lights on to a disrupter in the making.

Farnsworth and Lowe, who came on as MoviePass' CEO in 2016, became the faces of the company. They often made key decisions inside Helios & Matheson's Empire State Building office without Spikes, who by then had become chief operating officer. The staff ballooned, quadrupling from 10 to 40 by the end of 2017.

To celebrate, Farnsworth hosted a company event in November at his midtown apartment. He gave an impassioned speech with one clear message, according to those in attendance: They were part of something big.

But Spikes saw a looming disaster.

The company was overwhelmed by its overnight success and couldn't keep up with demand. A quarter-million new subscribers were signing up every month, and MoviePass customer-service lines were flooded with complaints from people who had been waiting weeks for their cards. MoviePass had lowballed the number of cards it would need after the price drop. It got to a point where the vendor making the MoviePass cards didn't have enough plastic and had to call on its competitors to fulfill all the card orders.

"We all knew we were selling something we couldn't deliver on," one former staffer said.

Spikes couldn't stay quiet. He'd often beg Lowe in private to convince Farnsworth that the $10 plan would doom them.

To no one's surprise, in late December, Spikes and cofounder Watt were voted off the board. Helios was now in full control of MoviePass.

On January 9, 2018, Spikes received an email from Lowe. It explained that MoviePass, the company he'd built from scratch, no longer needed his services.

"An email," a former staffer said. "All those years getting the company off the ground, and that's how he's treated?"

The same day MoviePass reached 1 million subscribers, a milestone it hit faster than Netflix and Hulu. A press release to mark the occasion included a picture of a smiling Farnsworth and Lowe, standing before the AMC marquee in New York's Times Square, holding MoviePass cards — a dig at the biggest movie chain in the world, which had previously tried and failed to ban the service from its theaters.

As one source close to the company put it, "From then on, it became the Mitch and Ted show."

The company falls into 'substantial doubt'

On the night of April 14, 2018, in Palm Springs, California, Farnsworth sat in his hotel room, banging out a furious email. It was addressed to MoviePass staffers who had come to the annual Coachella Valley Music and Arts Festival to work a promotional event the company would host with iHeartRadio.

Already, the company had made an impression on the festival. A MoviePass banner flew high above the festivities. Scantily clad Instagram influencers posted pictures with MoviePass swag. Former basketball star and amateur diplomat Dennis Rodman had shown up in a helicopter bearing the company's logo with members of Jerry Media, an online advertising company known best for its @f--kjerry Instagram account and for running social media for the doomed Fyre Festival. Now, it counted MoviePass among its clients.

Flying High

Amex Blue Cash Preferred card review: Earning 6% back at the supermarket is a no-brainer

Tue, 08/06/2019 - 3:49pm  |  Clusterstock

  • 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%) and on select US streaming services, plus 3% back at US gas stations and on transit including rideshares, taxis, tolls, trains, and more.
  • 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 card details

Annual fee: $95

Welcome bonus: $250 statement credit after you spend $1,000 in the first three months

Cash-back earning: 6% back on select US streaming subscriptions, 6% back at US supermarkets on up to $6,000 per year (then 1% back), 3% back at US gas stations and on transit including taxis, rideshares, parking, tolls, trains, buses, and more, and 1% back on everything else

Foreign transaction fee: 2.7%

Who is the Amex Blue Cash Preferred for?

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 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, the Blue Cash Preferred 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.

Plus, in 2019 Amex added a new 6% cash-back category: select US streaming services including Hulu, Netflix, and Spotify. You'll earn 6% back on these streaming services with no cap, and you'll also now earn an uncapped 3% back on transit, which includes everything from Lyft and Uber to train fares, tolls, and subways.

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 $250 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 $250 welcome bonus provided you used your card for $1,000 in purchases within three months of account opening. You're now up to $650. 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 $686 in rewards the first year — and that's if you didn't use your Amex Blue Cash Preferred to pay for eligible US streaming services and transit expenses, no to mention 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 $39 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, and who use one or more streaming services that are eligible for 6% cash back. 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 our partner The Points Guy

DON'T MISS: The best American Express cards

Join the conversation about this story »

The past 4 Fed chairs teamed up for an op-ed warning against political meddling amid pressure from Trump to cut rates further

Tue, 08/06/2019 - 2:28pm  |  Clusterstock

  • Four former leaders of the central bank have made a point to warn against the risks of politicized monetary policy.  
  • The warning appeared to be a rebuke of efforts by President Donald Trump and his administration to drive interest rates lower.
  • The move came after more than a year of unprecedented pressure on the independent Federal Reserve. 
  • Visit Markets Insider for more stories.

After more than a year of unprecedented White House pressure on the independent Federal Reserve, former leaders of the central bank have made a point to warn against the risks of politicized monetary policy.  

The most powerful central bank in the world "must act independently and in the best interests of the economy, free of short-term political pressures and, in particular, without the threat of removal or demotion of Fed leaders for political reasons," Paul Volcker, Alan Greenspan, Ben Bernanke and Janet Yellen wrote in an op-ed published Monday in the Wall Street Journal. The four economists collectively served as chairpersons for the Fed across four decades and six presidents. 

The warning appeared to be a rebuke of efforts by President Donald Trump and his administration to drive interest rates lower. Bloomberg reported in June that the White House this year looked into demoting the current chairman of the central bank, Jerome Powell, months after Trump discussed firing him. The White House did not respond to an email requesting comment. 

"Even the perception that monetary-policy decisions are politically motivated, or influenced by threats that policy makers won't be able to serve out their terms of office, can undermine public confidence that the central bank is acting in the best interest of the economy," the op-ed said. "That can lead to unstable financial markets and worse economic outcomes."

They stressed that governors, including the chair and vice chairs, can only be removed for cause and not for policy differences with political leaders. Such provisions and fixed terms — 14 years for board members and four years for leadership roles — were created to ward off political pressure.

Read more: Trump just tapped former economic adviser Judy Shelton for a Federal Reserve seat. She's a fierce critic of the central bank who sees a gray area on its independence from the administration.

Pointing to strains from slower growth abroad and Trump's escalating trade wars, the policy-setting Federal Open Market Committee cut interest rates by a quarter percentage point last week to a target range of between 2% and 2.25%

Attacks on the Fed have become increasingly bold and frequent in recent months. Seeking to juice the economy ahead of the 2020 elections, Trump advisers have echoed the president's calls for lower interest rates. 

"The Federal Reserve before the end of the year has to lower interest rates by at least another 75 basis points or 100 basis points to bring interest rates here in America in line with the rest of the world," White House trade adviser Peter Navarro told Fox News on Tuesday

The president has separately sought to place political allies at the top of the central bank. His most recent nominations for governors include the former Trump campaign adviser Judy Shelton, an outspoken proponent of lower interest rates and unorthodox economic policy.

"When the current chair's four-year term ends, the president will have the opportunity to reappoint him or choose someone new," the op-ed continued. "We hope that when that decision is made, the choice will be based on the prospective nominee's competence and integrity, not on political allegiance or activism."

Markets Insider is looking for a panel of millennial investors. If you're active in the markets, CLICK HERE to sign up.

SEE ALSO: After series of dramatic escalations, Trump suggests the trade war with China could last until 2020

Join the conversation about this story »

NOW WATCH: What El Chapo is really like, according to the wife of one his closest henchman

Top VC firms know they can't ignore cannabis forever. Here's how they're making their first investments.

Tue, 08/06/2019 - 2:27pm  |  Clusterstock

  • The Sand Hill Road set is cautiously opening their doors to the booming cannabis industry by investing in cannabis-related technology, but they aren't touching pure marijuana brands yet. 
  • A venture firm's relationship with its investors, known as limited partners, often holds them back from making marijuana investments. 
  • Institutional VCs have been reticent regarding cannabis because LPs often have "vice clauses"  banning investing in firearms, gambling, tobacco, and alcohol. 
  • Sign up for Cultivated, our new cannabis newsletter.

When Luke Anderson and Jake Bullock were trying to raise money for their THC-infused beverage startup, Cann, they found it easy to land meetings with top VCs but hard to get checks signed.

"We were spending lots of time educating VCs about the cannabis world," said Anderson, but none would commit any capital as THC is federally illegal in the US. Still, many of the VCs they met with were impressed with the founders and told them to reach out to angel investors who would be able to invest. 

Some of those meetings even led to VC partners investing their own money in Cann's $1.5 million seed round outside of their funds, including Rob Stavis of the $5 billion Bessemer Venture Partners, as well as partners at The Capital Group, and Viking Global Investors.

Those types of angel investors — partners at VC funds who may look at cannabis deals but are unable to commit their fund's capital — are "a lot of what's propping up the industry right now," Bullock, one of Cann's founders, said.

Read more: Top cannabis investors reveal where they're placing bets, but say there's 'pain to come' in the crowded CBD space

But that may be changing, particularly as VC funds grow more comfortable with cannabis-adjacent investments. After long being frozen out of the burgeoning industry, the world's largest venture capital funds are slowly testing the waters with smaller deals to capture a piece of what some Wall Street analysts say could be a $194 billion global industry in the next decade. 

Even though they often have restrictions that smaller investors don't, venture capital firms already have poured close to $1.6 billion into cannabis industry startups as of July 19, up from under $1.2 billion in all of 2018, according to the data provider PitchBook. That's up from just $16 million in 2013, as Colorado became the first state to open its doors to the commercial cannabis industry.

Most institutional VCs still draw a hard line between cannabis tech companies, like software platforms for dispensaries, and branded products that "touch the plant" —  or sell and distribute THC — venture investors told Business Insider.

CBD startups, however, are quickly becoming seen as fair game as the Food and Drug Administration works to develop rules around the newly-legal industry. 

The Sand Hill Road set's reluctance to invest in cannabis brands stems from the investors in the firms, known as limited partners (LPs), according to venture capitalists, cannabis entrepreneurs, and lawyers Business Insider spoke to for this story.

Limited partners, vice clauses, and the cannabis problem 

Limited partners in big VC funds are often institutions like pensions, endowments, or sovereign wealth funds. They manage billions of dollars and are bound by strict rules around where they can put their money and how those funds are accounted for.

They're the type of investors who are unwilling to take risks on a brand-new industry in a muddy legal climate. These LPs often include what are known as "vice clauses" in their agreements with venture funds that prevent the funds from investing in industries like alcohol, tobacco, firearms, and gambling.

While these "vice clauses" don't always include cannabis startups in the written documents outright, the prohibition is implied, Alan Patricof, the founder of Greycroft Partners, told Business Insider in an interview.

LPs are mostly skittish about companies that actually cultivate and distribute products containing THC since it is a federally controlled substance, Patricof said. 

But they are slowly getting more comfortable with consumer CBD startups — the substance can be derived from hemp, which was legalized federally last year — as well as ancillary tech and marketing companies that don't touch the plant at all.

Read more: CBD and hemp startups are using creative loopholes to skirt Facebook's ad ban. Here's how they're doing it.

"I've always been a person who likes to deal with the picks and shovels of a new industry," said Patricof, who has some 50 years of venture capital experience. "If I had been around in the gold mining days, I probably would have been selling picks and shovels."

According to Patricof, most of the cannabis-related deals that have crossed Greycroft's radar, while interesting, didn't fit the firm's model — looking for the next billion-dollar "unicorn."

If he really "pushed hard enough" Patricof said he could get exclusions from his LP agreements to do a cannabis deal, "but we haven't done that yet because of the extreme valuations."

Indeed, getting in on the ground floor of the next big thing could be getting trickier as overall interest ticks up and valuations soar. Vape startup Pax, for example, closed a $420 million fundraising round which valued the company at $1.7 billion in April.

Pax landed funding from Tiger Global Management's venture capital side, and Tiger has also invested in a number of cannabis tech startups, including Green Bits, a compliance software startup for marijuana dispensaries.

DCM Ventures, a $4 billion Silicon Valley firm, invested in pot delivery startup Eaze's $65 million Series C round last November, and held a CannaTech conference in May. 

But Greycroft isn't ruling anything out when it comes to cannabis. "We've seen that in many industries where reality hits, and you get another bite of the apple," Patricof said.

And Greycroft has already gone the CBD route — it invested in a $3.3 million seed round for Prima, a CBD startup started by the founder of Honest Company, in February.

'If a VC is doing less well, then they need to not piss off their LPs'

While institutional VCs slowly get acquainted with the industry, a number of sector-specific players like Altitude Investment Management and Tuatara Capital Partners have raised hundreds of millions from a mix of private investors and family offices — who are freer to invest in cannabis than institutions — to chase after cannabis deals. 

Smaller, early-stage VC funds, like New York City-based Tusk Ventures and Lerer Hippeau, are getting in on the action as well.

Tusk Ventures participated in the pot delivery startup Eaze's Series B back in 2016, and touts its work in the cannabis industry on its website.

"The reason why we're able to do it, is because we are a smaller fund and we don't have pension funds as investors," Bradley Tusk, the firm's founder, told Business Insider in an interview in February.

But Tusk said that it's also about leverage. When a VC is performing well, the fund's LPs are probably going to be more willing to accommodate cannabis deals.

"If a VC is doing less well, then they need to not piss off their LPs at all costs," Tusk said. "Which means they're not going to say, can we please have permission to bend the rules on this?"

To Andrea Hippeau, a principal at the early-stage fund Lerer Hippeau, getting in on the ground floor of the cannabis industry was too good of an opportunity to pass up.

"I think we've had a real advantage being one of the first institutional VC firms that have gotten involved in cannabis," Hippeau said. "We really saw a once-in-a-decade or more opportunity where a whole new billion-dollar-plus market was being created."

Read more: A top venture investor that's backed companies like Bird and TheRealReal explains why CBD is primed to explode

Lerer Hippeau has so far invested in LeafLink, a tech platform for cannabis dispensaries, Vangst, a recruiting platform, and Herb, a cannabis media company.

What separates Lerer Hippeau from other early-stage venture capital funds, according to Hippeau, is that her fund's LP agreements don't contain any vice clauses — by design — so they aren't excluded from cannabis deals. 

Hippeau, for her part, had to make sure her LPs were comfortable with even cannabis-adjacent deals.

"Before we started investing in cannabis, even in ancillary tech, we gave a heads up to our LPs and made sure that there were not any kind of major objections because those relationships are obviously very important to us," said Hippeau.

She said they had to have follow-up conversations with the fund's investors to make sure they were comfortable with the investments and to specify that they were investing in cannabis tech, and not the plant directly.

While Lerer Hippeau has so far shied away from "plant-touching" investments, Hippeau said those are coming when they raise their next fund, now that their investors have gotten more comfortable with the complex regulations around the industry.

"When we raise our next fund, there will be a stipulation in there that we will be planning on investing directly into cannabis companies so that there won't be any gray area there," said Hippeau. And she thinks that will soon extend across the VC world.

"I do think as you see new funds going out to raise, you'll see them writing carve-outs for cannabis into the documents," Hippeau said.

Join the conversation about this story »

NOW WATCH: Stewart Butterfield, co-founder of Slack and Flickr, says 2 beliefs have brought him the greatest success in life

Goldman Sachs predicts the Fed will do something thought unthinkable just a month ago

Tue, 08/06/2019 - 1:28pm  |  Clusterstock

  • Goldman Sachs now expects the Fed to cut rates twice in the fall, just days after Fed Chair Jerome Powell's July comments dashed investor optimism around a prolonged easing cycle.
  • The firm's analysts see a 75% chance for a 25-basis-point cut in September and a 50% chance for a same-size cut in October.
  • The likelihood of the US-China trade war extending past the 2020 election will spur additional cuts, the Goldman analysts said in the note.
  • Visit the Markets Insider homepage for more stories.

Goldman Sachs now expects the Fed to cut rates twice in the fall, an unexpected move after Fed Chair Jerome Powell dented investor optimism around a prolonged easing cycle during his July 31 press conference.

July's adjustment to a 2% rate from 2.25% marked the first interest-rate cut since the 2008 financial crisis. After that 25-basis-point lowering — and following Powell's comments — expectations of further easing at the September Federal Open Market Committee meeting dropped to 63%, according to a Bloomberg survey.

However, amid a recent escalation in the US-China trade war, that probability has moved back to 100%.

Even before the Fed's initial cut, there was debate over whether a second cut would be necessary later in 2019. The prospect of two additional cuts was seen as a highly unlikely scenario.

Goldman analysts said they expected that the US-China conflict would continue past the 2020 presidential election and that Powell would continue to slash the interest rate accordingly.

"In light of growing trade policy risks, market expectations for much deeper rate cuts, and an increase in global risk related to the possibility of a no-deal Brexit, we now expect a third 25-basis-point rate cut in October, for a total of 75 basis point of cuts," Goldman analysts said in the Tuesday note.

The analysts see a 75% chance of a 25-basis-point cut in September and a 50% chance for a similar cut in October. They also said there was a 15% chance of a 50-basis-point cut in September, as well as a 40% chance of the Fed not taking action in October.

"By the December meeting, we think inflation numbers running at roughly 2% will lead the Fed to stop cutting," Goldman added.

Markets Insider is looking for a panel of millennial investors. If you're active in the markets, CLICK HERE to sign up.

Stocks fell on July 31 after Powell's announcement called the quarter-percentage-point cut a "mid-cycle adjustment," signaling no plans for future adjustments. He later amended his statement, saying there's a chance for further easing if economic uncertainty continues.

The trade war intensified on Monday when China allowed its currency to breach a psychologically critical level, signaling it's ready for the trade war to continue. The US Treasury Department declared the nation a currency manipulator later that day, the first time the US has made such a statement since 1994.

President Donald Trump suggested on Twitter Tuesday that the trade war may continue into 2020.

Now read more markets coverage from Markets Insider and Business Insider:

Snap falls after announcing plans to raise $1 billion in debt to pay for operating expenses

Aurora Cannabis soars 16% after saying it expects sales to jump next quarter

A Wall Street investing guru reveals his 4-part strategy for finding and exploiting market inefficiencies — and making a bundle in the process

Join the conversation about this story »

NOW WATCH: What El Chapo is really like, according to the wife of one his closest henchman

Markets Live: Tuesday, 6th August 2019

Tue, 08/06/2019 - 6:05am  |  FT Alphaville

Live markets commentary from

Continue reading: Markets Live: Tuesday, 6th August 2019

Travelers were stranded halfway around the world when Australian airline Qantas cancelled multiple flights to the US

Mon, 08/05/2019 - 11:40pm  |  Clusterstock

  • Hundreds of passengers were stranded in Australia and the US after Australian airline Qantas cancelled four consecutive flights between Los Angeles and Melbourne.
  • The airline cited several separate mechanical problems as the cause.
  • Among the stranded passengers were more than 170 boy and girl scouts heading home from the World Scout Jamboree.
  • Qantas uses 484-seat Airbus A380 aircraft to operate the flights between Melbourne and Los Angeles. The use of the high capacity planes on the route — and the potential number of stranded travelers — complicated efforts to rebook and reroute passengers.
  • Visit Business Insider's homepage for more stories.

Hundreds of Australians and Americans were left stranded in the wrong countries after Australian airline Qantas cancelled multiple flights between Melbourne and Los Angeles due to myriad mechanical issues.

Between Saturday, August 3, and Monday, August 5, Los Angeles time, at least four flights between the two cities — two from Melbourne to Los Angeles, and two going the other way — had been cancelled. 

The flight from Los Angeles to Melbourne — QF94 — was cancelled on Saturday and Sunday evening, according to data from FlightStats. The flight is normally scheduled to depart at 10:40 p.m. PT. The previous night's flight arrived nearly 14 hours late.

The Melbourne to Los Angeles flight — QF93 — was cancelled on Monday, August 5, and Tuesday, August 6, according to FlightRadar24. The latter flight was scheduled to arrive in Los Angeles on Tuesday morning, due to the international date line.

Read more: Video shows the terrifying moment a British Airways flight filled with smoke while approaching its destination

The flights are typically flown on an Airbus A380, which has the largest capacity of any passenger airplane. Qantas can seat up to 484 passengers in its configuration on the plane.

Katie Quirk was among the hundreds of Australian passengers stuck in Los Angeles, along with her husband Tom and their 18-month-old daughter Madeline. They was rebooked onto Sunday night's flight after their Saturday flight was cancelled — and then left in the dark after the second flight was called off. They were eventually booked onto a flight departing Monday night and transiting through Sydney, which they were told by Facebook message from the airline.

"We found out the Sunday night flight was cancelled at 2 a.m. after a three-and-a-half hour delay," Quirk told Business Insider. "It took another hour or so for our bags to be taken off the plane. We didn't get back to the hotel until after 4 a.m."

Throughout the delay, Madeline managed to sleep on the terminal floor, despite construction noise and bright lights, Quirk said.

@Qantas My 18 month old is currently asleep on the terminal floor because our pleading request for lounge access was denied. No refreshment vouchers have been offered to any passengers. I’m absolutely appalled. As a long-time frequent flyer, I expected SO MUCH better from Qantas

— Katie Caroline (@KatieCaroline1) August 5, 2019

While the delays were an obvious inconvenience, Quirk said that she and other passengers were frustrated by a lack of communication from the airline — both during the delays, and surrounding the process to be rebooked on different flights.

"People understand safety comes first, and obviously we don't want to get on a plane that is experiencing mechanical issues," she said, "but I think it is also important in that situation for people to feel like they are being listened to and understood and that there is genuine sympathy and empathy offered regarding the circumstances."

Also among the stranded passengers were more than 170 boy scouts traveling from the World Scout Jamboree in Charlotte, North Carolina, according to the Herald Sun.

"Qantas haven't told us anything," Peter Lyon, whose 15-year-old son was stranded in Los Angeles, told the Herald Sun. "I'm pretty grumpy, I'm not the only one."

Qantas told Business Insider that it was working to reaccomodate passengers on later flights, including other Qantas flights with connections.

"Passengers were transferred onto tonight's QF 94 while others will be flown out tomorrow night." a spokesperson said. "Passengers have been put on other Qantas flights, but we expect to have everyone on their way on tonight's flight and tomorrow's."

SEE ALSO: A flight attendant had to get 5 stitches after an emotional-support dog bit him as he tried to help a passenger

Join the conversation about this story »

NOW WATCH: Inside Roborace: the Formula One for self-driving cars

The US government says ditching its controversial $5 billion settlement with Facebook could result in a 'far worse' deal for consumers (FB)

Mon, 08/05/2019 - 8:04pm  |  Clusterstock

  • The US government is warning that attempting to change the $5 billion FTC settlement with Facebook could result in a far worse deal.
  • Critics have savaged the settlement, arguing it is ineffectual, and non-profit EPIC has sought to get involved in the legal process.
  • US attorneys counter that there's no guarantee that the ultimate outcome of this could produce better results than the FTC managed.
  • Visit Business Insider's homepage for more stories.

The US government has a warning for critics of the Federal Trade Commission's $5 billion settlement with Facebook over privacy issues: Don't be so sure a better outcome is possible.

The FTC recently reached a multi-billion dollar settlement with the Californian social media giant over alleged violations of a 2011 consent order concerning its handling of users' data. It's a record-breaking fine — but critics have argued that it is ultimately ineffectual, amounting to only a fraction of Facebook's annual profits, and it's not accompanied by any more fundamental structural changes to the company's business model.

The Electronic Privacy Information Center (EPIC), a privacy-focused non-profit organization, is one such critic. It filed a motion to intervene in the case, arguing the settlement "is not adequate, reasonable, or appropriate" — and now US government lawyers are hitting back.

In a court filing on Monday, US attorneys argue that EPIC is seeking "to intervene to place itself in the government's shoes because it wishes the Stipulated Order were different." They argue that EPIC doesn't have proper grounds to get involved in the case, and also make an interesting argument as to the risks of any such meddling from third parties.

"Contending that '[t]he proposed settlement fails to safeguard the interests of Facebook users' ... EPIC presumably wants the Court to reject the proposed settlement in favor of some other penalty against Facebook that would—in EPIC's opinion—safeguard Facebook users' interests," the filing reads.

"But it is pure conjecture that rejecting the proposed settlement would lead to a different or better outcome that would 'safeguard the interests of Facebook users' in the manner EPIC's prefers. Indeed, rejecting the settlement could yield multiple other outcomes in litigation or later settlement far worse for consumers."

In other words, the US government is arguing: If the settlement went to court the ultimate outcome might be significantly worse for ordinary consumers than it is now.

To be sure, there's always a risk when you choose to litigate a matter in court. But it's worth noting that the settlement the FTC ultimately struck with Facebook is markedly weaker than options that were at one point being considered. The FTC explored the possibility of fining Facebook tens of billions of dollars, and holding CEO Mark Zuckerberg personally accountable, but that did not ultimately happen.

Got a tip? Contact this reporter via encrypted messaging app Signal at +1 (650) 636-6268 using a non-work phone, email at, Telegram or WeChat at robaeprice, or Twitter DM at @robaeprice. (PR pitches by email only, please.) You can also contact Business Insider securely via SecureDrop.

Read more:

Join the conversation about this story »

NOW WATCH: The incredible story behind Slack, the app that's taken over offices everywhere

Jeff Bezos sold another $990 million worth of Amazon shares at the end of last week (AMZN)

Mon, 08/05/2019 - 7:37pm  |  Clusterstock

  • Amazon CEO Jeff Bezos sold more than 500,000 shares on Thursday and Friday, raising $990 million.
  • The shares were in addition to the $1.8 billion worth of stock he sold earlier in the week.
  • It's unclear why he's selling.
  • But the moves come amid growing scrutiny of Amazon and follow a disappointing earnings report.
  • Visit Business Insider's homepage for more stories.

Jeff Bezos' selling spree didn't stop at $1.8 billion.

By the end of last week, he'd dumped nearly a $1 billion more of his Amazon stock.

On Thursday and Friday last week, Bezos, the CEO of the e-commerce giant, sold 531,852 shares, or about 1% of his total stake, for $990 million, according to documents he filed with the Securities and Exchange Commission. He also donated another 268 shares — worth nearly $500,000 — to an unnamed nonprofit organization.

The end-of-the-week moves capped off a big week of sales for Amazon's founder. Over the first three days of last week — the last three days of July — Bezos sold 965,612 shares, garnering more than $1.8 billion. In total, he sold about 2.5% of his shares.

Read more: Jeff Bezos just sold $1.8 billion worth of Amazon shares — here's our best guess at why

The sales were part of a trading plan that Bezos put in place, according to the regulatory documents. It's not clear when he put the plan in place. Before last week's sales, he had sold any of his shares since last October, although he'd donated some to unnamed non-profit groups.

It was also unclear why Bezos is selling stock. The Amazon spokesman Dan Perlet declined to comment on the sales.

Investors often consider sales by a CEO or other top executives at company to be a bad sign, potentially an indication that the insiders are anticipating their company's performance to deteriorate or not meet the market's expectations. Amazon's second-quarter profit came in below Wall Street forecasts, and company executives warned its third-quarter report could similarly disappoint, amid rising costs.

Amazon is also under scrutiny for its business practices amid a wide-ranging antitrust investigation by federal officials and a similar inquiry in Europe. And the US Defense Department last week announced an indefinite delay in awarding a $10 billion cloud-computing contract that Amazon was widely expected to win.

Even with the stock sales, Bezos remains Amazon's biggest stakeholder. He now owns 57.6 million shares, or about 11% of the company.

Got a tip about Amazon or another tech company? Contact this reporter via email at, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.


SEE ALSO: Amazon has a lot of questions to answer about its new drone service

Join the conversation about this story »

NOW WATCH: 5 things wrong with Apple's lightning cable

Video shows the terrifying moment a British Airways flight filled with smoke while approaching its destination

Mon, 08/05/2019 - 7:32pm  |  Clusterstock

  • A flight from London to Valencia, Spain, made an emergency landing on Monday afternoon after the cabin filled with smoke.
  • Passengers evacuated the plane on the runway using the emergency slides.
  • Three passengers were taken to the hospital as a precaution, and all were discharged by Monday night.
  • Visit Business Insider's homepage for more stories.

Passengers on a British Airways flight faced a terrifying ordeal on Monday when their plane filled with smoke as the plane approached its destination, Valencia Manises Airport in Spain.

The flight, BA 422 from London's Heathrow Airport to Valencia, Spain, was descending on approach to Valencia, according to British Airways, when the cabin suddenly filled with smoke.

PANICO!!! MIEDO jamás habia vivido algo igual. Buf lo hemos contado de milagro! Se ha prendido fuego el avión en el que volábamos Londres-Valencia!! Acabamos de aterrizar @British_Airways

— Dani Meroño Bori (@Dani_Merono) August 5, 2019

"I have never experienced fear like it," Dani Meroño Bori, a passenger on the flight, tweeted in Spanish. "We just jumped down the ramp!"

The flight completed its landing as the airport's emergency services rushed to meet the jetliner. The plane stopped on the runway, and passengers evacuated the jet — an Airbus A321 — via emergency slides.

There were 183 people on board, according to British Airways — 175 passengers, six flight attendants, and two pilots.

.@British_Airways terrifying experience on flight to Valencia. Felt like horror film. Thankfully everyone safe. Flight filled with smoke and had to be emergency evacuated. #britishairways

— Lucy Brown (@lucyaabrown) August 5, 2019


"[It] felt like a horror film," Lucy Brown, another passenger, tweeted. "[The] flight filled with smoke and had to be emergency evacuated."

Brown, an associate dean at the London College of Communication, was traveling with her four children.

"There was a horrible smell. People were almost choking," she told Mirror Online.

BA422 landed in VLC with smoke on the cabin and passengers leaving through evacuation ramp. @britishairways what is happenning? No info to passengers

— Miguel J. Galindo (@MJGalindo) August 5, 2019


Three passengers were taken to the hospital after the evacuation "as a precaution," according to the airline. All three were discharged by Monday night.

In a statement to Business Insider, British Airways confirmed that it was assisting passengers.

"The safety of our customers and crew is always our highest priority. In addition to our team on site, other British Airways team members have arrived in Valencia to help our customers and our local airport partners with anything they need."


SEE ALSO: A flight was delayed when a man tried climbing onto the airplane's wing to hitch a free ride

Join the conversation about this story »

NOW WATCH: Will Boeing recover from the 737 Max crisis?

Tech's 5 FAANG stocks just saw $150 billion of their market value vaporized, and Apple is reeling the hardest (FB, AAPL, AMZN, NFLX, GOOG)

Mon, 08/05/2019 - 7:04pm  |  Clusterstock

  • Shares of Facebook, Apple, Amazon, Netflix and Google — known as the FAANG stocks— tumbled as China hit back at the US after the Trump Administration said it planned new tariffs.
  • Apple took the biggest hit as its share fell 5% on worries that the new tariffs are a "potential gut punch" for the iPhone maker. The plunge represented $53 billion in market value. 
  • The FAANG market cap losses totaled $150 billion, the value of a company bigger than either Costco or IBM.
  • Click here for more BI Prime stories.

The giants of the US tech industry shed $150 billion in market value on Monday, as China hit back in an escalating trade war with the US.

The lost market value is the equivalent of a company the size of Costco or IBM instantly evaporating into thin air, a sobering sign of how the raging trade tit-for-tat is rattling Wall Street. For tech companies, which are heavily reliant on China for components and manufacturing of their products, the trade war is especially concerning.

The battle heated up after China let its currency, the yuan, weaken to below 7 to a dollar on Monday, in response to the Trump Administration's recent announcement that it will impose new tariffs on Chinese goods. That triggered a selloff that swept the broader markets. The Dow Jones Industrial Average plunged 767 points, or 3%, to close at 25,718 on Monday, while the Nasdaq lost 278 points, or 3.5% to close at 7,726.

Shares of the tech companies, known collectively as FAANG — Facebook, Apple, Amazon, Netflix and Google — set the pace for the broad market retreat.

Apple was the biggest loser in the group, dropping 5.2% to close at $193.34, wiping away $53 billion from the iPhone maker's market cap. Apple was seen as the most vulnerable company in the intensifying trade war. Wedbush analyst Daniel Ives called the new Trump Administration tariffs a "potential gut punch" for the Silicon Valley icon. 

Facebook fell nearly 4% to close at $181.73, while Amazon retreated 3.2% to close at $1,765.13, Google was off 3.5% to close at $1,152.32 and Netflix slid 3.5% to close at $307.63.

The market cap loss combined represented value of a company bigger than a Costco. The retail giant ended the trading session with a market cap of $117 billion after its shares dropped 2.7% to close at $265.10.

The market loss decline also was bigger than a tech behemoth like IBM which now has a market cap of $125 billion after its stock sank 4.4% to close at $140.76.

Got a tip about Facebook, Apple, Amazon or another tech company? Contact this reporter via email at, message him on Twitter @benpimentel. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: Here are 25 of the most innovative CIOs leading their companies' strategies in cloud computing, cybersecurity, and AI, according to experts and their peers

Join the conversation about this story »

NOW WATCH: 5 things wrong with Apple's lightning cable

Chase's Freedom Unlimited is one of the best cash-back credit cards of 2019 — and it comes with perks that many competing cards don't offer

Mon, 08/05/2019 - 6:01pm  |  Clusterstock

  • The Chase Freedom Unlimited is a compelling cash-back credit card for anyone looking to earn with a simple, easy-to-understand rewards program and no annual fee.
  • While it is not the very best awards rate out there, it does come with some valuable benefits that competing cash-back cards don't offer.
  • If you have a Chase Ultimate Rewards-earning card like the Chase Sapphire Preferred Card, the Freedom Unlimited's earnings can be redeemed as points. This makes it one of the best cards for everyday, non-bonus category spending.
  • As long as you pay it off in full every month, you have a lot to gain and almost nothing to lose with the Freedom Unlimited card.

If you want to earn cash back on every single purchase, the Chase Freedom Unlimited credit card may be a great choice. This card offers unlimited 1.5% cash back on every purchase with no limits, annual fees, or bonus categories to worry about.

This card came about after a long reign by the Chase Freedom card, which offers 5% cash back on rotating bonus categories and 1% everywhere else, as an alternative that allows users a simpler, but still lucrative, cash-back experience. Depending on your spending habits, the Chase Freedom Unlimited card may be the right fit.

Chase Freedom Unlimited card details

Annual fee: $0

Sign-up bonus: 3% back on all purchases in your first year, up to $20,000 spent. Then, earn an unlimited 1.5% back on all purchases.

Cash-back/points earning: 1.5% back after the sign-up offer — but you can redeem 1.5x cash-back points as Chase Ultimate Rewards points (meaning you can transfer them to travel partners and potentially get more value) if you also have a card that earns UR points, like the Chase Sapphire Preferred Card

Foreign transaction fee: 3%

Sign-up bonus and everyday earning

This card starts users with a valuable bonus of 3% back on all spending in their first year, up to $20,000. If you maxed this sign-up offer out, you'd earn $600 back. 

After the first year and after hitting $20,000 in spending, you'll earn 1.5% cash back on all purchases. There is no limit to what you can earn.

Compared to the original Chase Freedom card, this card offers an interesting value.With the old Freedom card, which is still available, you can earn more with the 5% bonus categories. But with only 1% everywhere else, you may still earn more cash back in total with the 1.5% flat rate cash back. It really depends on where you shop most.

Using cash-back rewards

If you also have a Chase Sapphire Reserve or Chase Sapphire Preferred Card, you can turn cash back into Ultimate Rewards points at a rate of 1 cent per 1 point. If you value free award travel, this is another way to earn rewards points that can be worth a lot more than 1 cent each depending on how you redeem — there are a variety of travel partners from British Airways to United, and you can also redeem them for travel through the Chase Ultimate Rewards travel-booking portal.

The 1.5% cash back rate is pretty good, but it isn't the best out there. Even among cards with no annual fee, you may do better with Citi Double Cash, which offers 1% cash back when you shop and 1% when you pay your bill. That is an equivalent 2% cash back on every purchase. For big spenders with great credit, the Alliant Cashback Visa Signature credit card may offer even more with a 2.5% rate and 3% for the first year.

Again, though, if you pair the Freedom Unlimited with a card that earns Chase Ultimate Rewards points, you can earn more than 1.5%-3% back with this card. Travel website The Points Guy subjectively values Chase points at 2 cents apiece, so if you're able to redeem your Freedom Unlimited earnings as points, you're looking at 3%-6% back. That's one of the best returns on spending for purchases that don't fall under a bonus category like dining or groceries.

Read more: 4 reasons anyone who cares about credit card points and miles should be using Chase Ultimate Rewards

Chase Freedom Unlimited features

Unlike some other banks, Chase offers a lot in additional benefits on its cards. In addition to zero fraud liability, which is standard for pretty much every credit card, Freedom Unlimited includes an automatic extended manufacturer's warranty and purchase protection.

The extended warranty gives you an additional year on top of the manufacturer's warranty for eligible purchases with a warranty of three years or less. Purchase protection will repair or replace new purchases for 120 days due to loss or theft. If you just got a brand-new phone and dropped it, that screen repair is covered up to $500 per claim and $50,000 per account lifetime.

This card does not offer any benefits specific to travel.

Read more: Chase offers bonus points or miles when you add authorized users to certain credit cards — adding your kid will help them build a credit history

Freedom Unlimited costs and fees

This card has no annual fee and most other fees are easily avoidable. As long as you pay your card off in full every month and skip balance transfers, cash advances, and pay on time, you won't ever pay to keep or use this card.

Starting out, this card offers 0% APR for 15 months on purchases and balance transfers. That is a great deal and may allow you to consolidate other debt to this card and pay it off completely during the no-interest period. After the intro period, the card charges variable-rate interest. Current rates are 17.24% to 25.99% APR based on your credit history. Rates can change at any time with market rates. In the current rising interest rate environment, they are likely to follow suit. Cash-advance transactions charge a higher 27.24% variable rate APR.

Balance transfers cost 5% of the transferred balance with a $5 minimum. Cash-advance transactions charge 5% with a $10 minimum. Late and returned payments cost up to $39 per occurrence.

This card charges a 3% foreign transaction fee. If you travel outside the United States regularly, you can find a card, like the Chase Sapphire cards mentioned above, that charge no foreign transaction fee.

The bottom line: Is this the best card for you?

Overall, the Freedom Unlimited is a compelling cash-back credit card for anyone looking to earn with a simple, easy-to-understand rewards program and no annual fee. While it is not the very best cash-back rate out there, it does come with some valuable benefits that competing cash-back cards don't offer. And if you pair it with a card that earns Chase Ultimate Rewards points and redeem your cash back as points used for travel, this card becomes even more valuable.

If you're a fan of Chase cards or just want a simple way to earn every time you swipe (or dip, tap, or pay online), the Chase Freedom Unlimited credit card has you covered. The sign-up bonus of 3% back on the first $20,000 spent in the first year may be enough to tip the odds in favor of this card as well. As long as you pay it off in full every month, you have a lot to gain and almost nothing to lose with the Freedom Unlimited card.

Click here to learn more about the Chase Freedom Unlimited from our partner The Points Guy.

SEE ALSO: I've carried the Chase Freedom in my wallet for over a decade — here's why the credit card is a great value

DON'T MISS: Most people think paying $450 a year for a hotel credit card is insane — here's why I signed up for the Hilton Aspire anyway

Join the conversation about this story »

Stocks just suffered through their worst day of 2019. These were the 8 biggest losers in the S&P 500.

Mon, 08/05/2019 - 4:59pm  |  Clusterstock

  • The S&P 500 index fell 3% on Monday as the stock market turned in its worst day of 2019.
  • The losses came after China retaliated against the US for hitting the country with new tariffs. 
  • China's central bank allowed its currency to fall below a key threshold against the US dollar, which compounded trade-war fears among investors.
  • Here are the eight biggest losers in the S&P 500 on Monday. 
  • Visit the Markets Insider home page for more stories.

The escalating trade war between the US and China sent the stock market on a downward spiral to its worst day of 2019 on Monday.

The sharp sell-off came after China let the value of its currency slip below a key level on Monday in response to President Trump imposing a 10% tariff on an additional $300 billion worth of Chinese products. 

The drop follows the worst week of the year for the S&P 500 index, which fell 3.1% for the five-day period ending last Friday after Trump announced his plan to hit China with more tariffs. 

Below are the biggest losers within the S&P 500, as of Monday.

Markets Insider is looking for a panel of millennial investors. If you're active in the markets, CLICK HERE to sign up.

8. Fortinet

Ticker: FTNT

Industry: Cybersecurity

Stock decline: -6.03%

Source: Bloomberg

7. Diamondback Energy

Ticker: FANG

Industry: Energy

Stock decline: -6.20%

Source: Bloomberg

6. E*Trade

Ticker: ETFC

Industry: Financial services

Intra-day move: -6.25%

Source: Bloomberg

5. Tapestry

Ticker: TPR

Industry: Fashion

Stock decline: -6.42%

Source: Bloomberg

3. Nvidia

Ticker: NVDA

Industry: Semiconductor

Stock decline: -6.45%

Source: Bloomberg

3. Valero Energy

Ticker: VLO

Industry: Energy

Stock decline: -6.64%

Source: Bloomberg

2. Wynn Resorts

Ticker: WYNN

Industry: Casinos and Hotels

Stock decline: -7.18%

Source: Bloomberg

1. Nektar Therapeutics

Ticker: NKTR

Industry: Biopharmaceutical

Stock decline: -7.37%

Source: Bloomberg

About Value News Network

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

Connect with Us