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3 times a prenup is non-negotiable, according to a financial planner

Sun, 01/19/2020 - 11:45am  |  Clusterstock

Getting a prenuptial agreement isn't often the first thing on many couples' minds after they decide to tie the knot. But, in some scenarios, it can be an essential.  

Ylisa Sanford, an Ameriprise private wealth adviser and financial planner, says there are a few reasons couples need one. 

"From a financial planning standpoint, I think that they're very effective," Sanford says. While she admits that the idea can be unromantic, the principles behind them are simple: It's a protection. Sanford likens them to car insurance: "I'm not planning to have a car accident, but I have insurance in case," she says. 

In her experience, there are a few situations where there's no question on whether or not a prenuptial agreement is needed. 

1. Second marriages with children call for a prenup

Situations that involve several families merging into one can make for complicated money discussions down the road. 

Especially when two spouses already have children coming into the marriage, a prenup is essential. "One of the most common scenarios is where you've got a second marriage. The premarital agreement will stipulate yes, the remaining spouse will get the assets if one of the spouses die," Sanford says.

As an example, she points out that unintended family members could end up with a spouse's money if it's not laid out correctly in a prenup. "Let's say spouse A has two kids, and spouse B has two kids. Spouse A's money goes to spouse B once spouse A dies. But, when spouse B dies, that money should go back to spouse A's kids, not to spouse B's kids." 

A prenuptial agreement could help these sorts of transitions go smoothly, even when couples married a second time do stay together. "It's very effective and cuts out confusion, frustration, and disharmony," Sanford says.

2. If one partner's family owns a business, a prenup is a safety net

Sanford says that any couple who has a family business involved should probably play it safe and opt for a prenup. 

"If there's a family business involved, you don't want a situation where there's a marital dissolution and a multi-generational family businesses is having to be split to go to an ex-spouse," she says. 

Things like your family's business and even any intellectual property rights you own can be included in prenups, and can help protect a business as well as assets if you ever do need to go your separate ways. 

3. A disparity in assets can make a prenup essential — but it doesn't have to be huge

When one partner has more assets than the other, Sanford says, a prenup is essential. But, you don't have to be a millionaire; even the typical person who has started investing or owning real estate before they're married could benefit. 

Prenups are gaining popularity with millennials, and the fact that many are marrying later and starting their financial lives before marriage might be why. 

"Millennials have been on their own, accumulated some wealth, either from a 401(k) or a stock program provided by their employer or some real estate, and they want to make sure that the property remains theirs if there are problems down the road,"  Leanna Johannes, a senior wealth strategist at PNC Wealth Management previously told Business Insider. 

A financial planner can help you decide if a prenup is the right move

Working with a financial planner and the right professionals can help you determine whether a prenup is right for your situation and your relationship. 

"In certain cases, they can take on a life of their own if people get too emotionally invested in them," Sanford says. "But, premarital agreements that are structured fairly and ethically by parties that have had proper consultation can make things very easy if there's a dissolution." 

Looking for professional advice on your money? SmartAsset's free tool can find a financial planner near you »

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'Bad Boys for Life' is on pace to have the second-best opening ever during the Martin Luther King Jr. weekend with $68.1 million (SNE)

Sun, 01/19/2020 - 11:25am  |  Clusterstock

  • Sony's "Bad Boys for Life" is dominating the four-day Martin Luther King Jr. Day holiday weekend.
  • The movie will have brought in $68.1 million by Monday, the second-best opening ever for the weekend, behind "American Sniper."
  • "Bad Boys for Life" is also the biggest opening ever for an R-rated Sony release.
  • Universal's "Dolittle" did better than industry projections, but the $175 million-budgeted movie is still only estimated to make $30 million by Monday.
  • Visit Business Insider's homepage for more stories.

If I told you the "Bad Boys" franchise would be the first big moneymaker of 2020 you would think I was a crazy.

But Sony has pulled it off, as the third movie in the franchise has brought in an estimated $59.1 million as of Sunday and by Martin Luther King Jr. Day on Monday the movie is on pace to bring in $68.1 million. That's the second-best opening ever during the four-day holiday weekend, passing the Ice Cube/Kevin Hart comedy "Ride Along" ($48.6 million). Clint Eastwood's "American Sniper" is still number one with $107.2 million.

It's also the biggest opening ever for an R-rated Sony title.

The $68.1 million figure blows away the opening weekend "Bad Boys II" had in 2003 ($46.5 million), and surpasses the total domestic cume of the first "Bad Boys" in 1995 ($65.8 million).

It's the rare dated IP to find box office glory, though Sony has a better batting average than most. The studio is also finding success with its revamp of the "Jumanji" franchise. After 2017's "Jumanji: Welcome to the Jungle" brought in close to $1 billion at the worldwide box office, its sequel, "Jumanji: The Next Level," has also found business, as the movie currently has brought in over $700 million worldwide. (Though Sony's "Men In Black: International" reboot was a bust.)

Now it looks like the studio has found the right formula of nostalgia and new blood (thanks to the Belgian filmmaking duo Adil El Arbi and Bilall Fallah, who directed "Bad Boys for Life") to ignite more "Bad Boys" titles. Before this weekend, news of a "Bad Boys 4" in the works was reported by The Hollywood Reporter.

Meanwhile, across town, Universal is looking to take a big hit with its $175 million "Dolittle." The Robert Downey Jr. flick did perform better than projections, but still took in just $22.5 million on over 4,000 screens ($30 million by Monday). It's a far cry from last weekend, when the studio's Oscar-frontrunner "1917" topped the box office. That title is still going strong, having brought in $22.1 million ($27 million four-day). Its global box office is now over $100 million.

"Dolittle" is the second-consecutive big release from Universal that failed to find an audience. The studio is still licking its wounds from the release late last year of "Cats," which has only brought in $59.8 million worldwide.

Box-office highlights:
  • Sony is also finding success with its release of "Little Women." The Greta Gerwig-directed title that has been nominated for six Oscars will bring in $7.4 million by Monday. Its domestic cume is over $85 million.
  • Disney's "Star Wars: The Rise of Skywalker" passed the $1 billion worldwide box office mark, its total to date is $1.026 billion.

SEE ALSO: Inside the making of Netflix's Aaron Hernandez doc series, from new revelations to jailhouse tapes

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The 10 NYC neighborhoods where home prices increased the most over the past decade, ranked

Sun, 01/19/2020 - 11:00am  |  Clusterstock

New York city's real estate market has grown increasingly expensive over the past decade.

In fact, in November 2019, the city's median recorded sales price reached just below $670,000  which is 49% higher than 2010's median recorded sales price of $450,000.

A recent report by real estate listing platform StreetEasy, reveals the 10 neighborhoods in New York City where median recorded sales prices increased the most from 2010 to 2019. Those increases range from just above 100% to over 200%.

Eight of the neighborhoods on the list are located in Brooklyn which is no surprise considering the borough's popularity — and by extension, its price tags  — have increased astronomically since the 1940s.

The only two non-Brooklyn neighborhoods to make the list are the Lower East Side, which saw a 168% increase in its median recorded sales price, and Gramercy Park, which saw a 109% increase in its median recorded sales price.

Keep reading for StreetEasy's full list of neighborhoods. 

SEE ALSO: The 15 best states for America's middle class, ranked

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10. From 2010 to 2019, the median recorded sales price in Williamsburg increased 107%

Median recorded sales price in 2010: $834,115

Median recorded sales price in 2019: $2,591,446


9. From 2010 to 2019, the median recorded sales price in Gramercy Park increased 109%

Median recorded sales price in 2010: $694,500

Median recorded sales price in 2019: $1,450,000

8. From 2010 to 2019, the median recorded sales price in Prospect Heights increased 110%

Median recorded sales price in 2010: $535,791

Median recorded sales price in 2019: $1,125,000

7. From 2010 to 2019, the median recorded sales price in Carroll Gardens increased 115%

Median recorded sales price in 2010: $715,000

Median recorded sales price in 2019: $1,540,000

6. From 2010 to 2019, the median recorded sales price in Fort Greene increased 118%

Median recorded sales price in 2010: $574,041

Median recorded sales price in 2019: $1,250,000

5. From 2010 to 2019, the median recorded sales price in Prospect Lefferts Gardens increased 132%

Median recorded sales price in 2010: $373,195

Median recorded sales price in 2019: $865,000

4. From 2010 to 2019, the median recorded sales price in Bedford-Stuyvesant increased 159%

Median recorded sales price in 2010: $363,000

Median recorded sales price in 2019: $938,486

3. From 2010 to 2019, the median recorded sales price on the Lower East Side increased 168%

Median recorded sales price in 2010: $521,000

Median recorded sales price in 2019: $1,395,000

2. From 2010 to 2019, the median recorded sales price in Greenpoint increased 192%

Median recorded sales price in 2010: $539,713

Median recorded sales price in 2019: $1,578,287

1. From 2010 to 2019, the median recorded sales price in Cobble Hill increased 211%

Median recorded sales price in 2010: $834,115

Median recorded sales price in 2019: $2,591,446

Perfecting the Poshmark 6-figure side hustle, Wall Street's most accurate analysts make predictions, and the biggest VCs in cannabis place bets

Sun, 01/19/2020 - 10:30am  |  Clusterstock

Is it too late to say "new year, new you"?

We are, after all, in a new year. A new decade even, as you might've heard.

This is Drake Baer, writing in lieu of executive editor Matt Turner, who's on parental leave. I run the strategy desk at Business Insider, where we cover how the professional world is shifting and how to navigate it. We have a vested interest in reinvention, one that you can follow through our weekly newsletter, Success Insider. And if you're interested in renewables, check out Power Line — our just-launched newsletter covering clean energy.

Over the past week, the Business Insider newsroom has had a variety of pieces that will help you plan out the year, and maybe the decade. Perhaps you want to finally get going in real estate, or you're curious about cannabis, or you keep hearing about the social reselling platforms where the kids are getting all their fashion. Or maybe, simply, you want to get stock picks from the highest-performing analysts around. We got you.

You want to get ahead. We'll show you how.

Finance and investing

Here's a look at how SoftBank's dot-com-era investments played out — half of these 14 startups it bet on collapsed

The Japanese conglomerate SoftBank quickly went from being lauded to scrutinized with the fallout of WeWork. But as our reporters uncovered, the house that Masayoshi Son built (like many investors) has a history of calamity. The first megafund, SoftBank Capital Partners, surfed on the dot-com boom at the turn of the last century — and a frankly shocking number of those would-be world-beaters went belly up.

A Silicon Valley tech leader left behind a lucrative career to pursue real-estate investing. Here's the dealmaking strategy that's netted him 3,500 units to date.

Having burned out on the startup grind, Spencer Hilligoss wanted to find a way to financial independence that would be predictable and lucrative. He learned that "syndication" was the best strategy for making smart investments in real estate — with a healthy dose of scale.

'This is a really huge buy signal': Billionaire bond King Jeffrey Gundlach lays out a juicy investment setup worth seizing, one that's happened only a handful of times in the past century

Gundlach is a superstar among finance types, known for his bold calls. And he has two interrelated messages: The US dollar is about to get way weaker and commodities are apt to swell in turn.

Wall Street's 5 most accurate analysts reveal the stocks you should buy now for explosive returns in 2020

The fintech firm TipRanks measure how well sell-side analysts perform, and they gave us the top experts of past year with one stock each analyst rates as a buy. Why not learn from the best?

The top 14 VC firms making deals in the cannabis industry, and where they're looking to place their next bets

The cannabis-investment space continues to mature, and our reporters Yeji Jesse Lee and Jeremy Berke caught up with some of the leading VCs, as measured by deal count, for their 2020 predictions.

WeWork convinced a skeptical SEC to let it use a wonky metric that tested accounting rules. Here are 58 pages of letters showing how the coworking company changed the agency's mind.

Dakin Campbell published 58 pages of letters between WeWork and the top U.S. securities regulator that have never been seen by the public. The back-and-forth shows how the company convinced the SEC to let it use a wonky metric that painted its financials in a rosy light when pitching its doomed IPO.

Tech, media, and telecoms

Internal Tesla marketing document reveals how the company tried to position itself as a lifestyle brand that makes the world's best cars

At Business Insider we pride ourselves in living up to our name — that is, bringing you inside the world's most influential companies. Reporter Patrick Coffee did just that on Wednesday with an article extrapolating from an internal document at Tesla that outlines the company's marketing strategy.

How much YouTube pays influencers for 100,000, 1 million, and 150 million views, according to top creators

YouTube has a partner program through which influencers can make money off placing ads in their videos. We spoke with a variety of influencers about how much they earn with each video — the pay (and the ads themselves) depend on their length, the demographic, and how long people are watching them.

Walmart wants to build an ad business that rivals Amazon. Here are the 11 execs leading the charge.

Amazon makes upward of $17 billion on advertising a year. Walmart is attempting to match that success, with a phalanx of executives with tenures at Frito-Lay, Facebook, and of course Amazon Advertising. Intriguingly, there are quite a few CBS veterans in the mix.

How Deloitte is spending $2 billion to train 4,000 workers on the hottest tech jobs of 2020

The reality of digital transformation mandates that large companies need to "upskill" their workforce — that is, provide their talent training that makes them freshly relevant as new skills become in demand. The professional services giant Deloitte founded its Cloud Institute last year, providing employees the chance to pursue technical roles in-house. A thousand people went through it last year, with quadruple the cohort in 2020.

Healthcare, retail, and transportation

Verily just presented for the first time at JPMorgan's big health conference. Here's how the CEO of Alphabet's life sciences firm laid out the unusual business to top investors.

Verily is one of the most intriguing names in health. Owned by Google parent Alphabet, the firm has taken on $1.8 billion in investments, and it's involved in projects ranging from addiction treatment to robotics. And in a presentation, CEO Andy Conrad unpacked how the firm isn't just working on a bunch of disparate initiatives, but a coherent strategy.

The argument over whether America is facing a 'truck-driver shortage' has embroiled the trucking industry for years. We asked 3 CEOs and 2 economists to settle the debate.

While trucking is a $800 billion industry, it's facing a labor problem. Trucking companies are seeing staggering rates of turnover — by one estimate, 97%! We spoke with trucking executives and economist about how they'd diagnose trucking's worker challenges, plus how to address it.

The ultimate guide to opening a Pure Barre franchise and becoming wildly successful, according to 2 multiple-franchise owners

Ballet, but make it boutique fitness. Pure Barre has over 500 studios across North America, serving more than half a million clients. The owners we spoke with detailed the challenges of starting up and dispensed sage advice on metrics and marketing.

McDonald's franchisees in leaked email call for the fast-food giant to 'stay focused' on creating a chicken sandwich that customers crave as the chain battles Popeyes and Chick-fil-A

Chicken's hot. Popeyes and Chick-fil-A have become pop-culture presences unto their own. And the golden arches want in on it, testing new sandwiches in Houston and Knoxville. "We need to stay focused on coming up with a chicken sandwich our customers are going to crave," so reads an internal email.

How entrepreneurs use apps like Poshmark to turn side hustles selling clothes into full-time gigs earning 6 figures or more

Online resale is also hot, especially with millennials and Gen Z. Poshmark is a social reseller with an emphasis on fashion, and our reporter Jennifer Ortakales spoke with a pair of "poshers" about how they grew their platforms from side hustles into full-time businesses. One key strategy: The social nature of Poshmark creates a built-in marketing mechanism. A quarter-million followers goes a long way.

SEE ALSO: Portugal is the best country in the world for American expats to retire in. A Utah couple who moved there in 2012 gave us a breakdown of how they live on a $2,330 monthly budget.

Join the conversation about this story »

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THE RISE OF BANKING-AS-A-SERVICE: The most innovative banks are taking advantage of disruption by inventing a new revenue stream — here's how incumbents can follow suit

Sun, 01/19/2020 - 10:01am  |  Clusterstock

Fintechs are encroaching on incumbents' share in the banking game, forcing them to explore new business models — but tech-savvy legacy banks can treat this as an opportunity rather than a threat by moving into the Banking-as-a-Service (BaaS) space.

BaaS platforms enable fintechs and other third parties to connect with banks' systems via APIs to build banking offerings on top of the providers' regulated infrastructure. This means banks that launch BaaS platforms can actually benefit from fintechs entering the finance space, as it turns fintechs into customers rather than just competitors. Other benefits from launching a BaaS platform include being able to monetize such platforms, establishing strong relationships with fintechs, getting ahead of the curve in terms of open banking, and accumulating additional data from third parties.

In The Rise of Banking-as-a-Service, Business Insider Intelligence looks at the benefits banks stand to gain by offering BaaS platforms, discusses key players in the industry that have already successfully launched BaaS platforms, and recommends strategies for FIs looking to move into BaaS.

The companies mentioned in this report are: BBVA, Clearbank, 11:FS Foundry, Starling.

Here are some key takeaways from the report:

  • Offering BaaS also allows banks to unlock the opportunity presented by open banking, which is becoming a vital part of the financial services industry.
  • There are two key types of players — BaaS-focused fintechs and BaaS providers with a retail banking arm — that banks will need to learn from and compete against in the BaaS space.
  • Banks that have embraced digital will have an easier time ensuring that their infrastructure and systems are suitable for third parties.
  • It's vital for incumbents to accurately assess third-party needs to create an in-demand portfolio of white-label BaaS products.

 In full, the report:

  • Outlines what BaaS is and how it relates to open banking. 
  • Highlights the benefits of launching a BaaS platform, including two different monetization strategies.
  • Explains what BaaS players are currently doing in the space, and outlines the services they offer.
  • Discusses what incumbent players can do in order to launch their own successful BaaS platform.

Interested in getting the full report? Here are four ways to access it:

  1. Purchase & download the full report from our research store. >> Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
  3. Join thousands of top companies worldwide who trust Business Insider Intelligence for their competitive research needs. >> Inquire About Our Corporate Memberships
  4. Current subscribers can read the report here.

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These are the most popular words used in real-estate listings across the US

Sun, 01/19/2020 - 9:27am  |  Clusterstock

Whether you're looking to buy a home, rent an apartment, or invest in a second property, you've probably read your fair share of real-estate listings.

In the midst of an industry flooded with new tech, words used to market properties continue to hold importance and influence first impressions. 

A recent study by the online real-estate marketplace, Point2Homes, has revealed the most popular words and phrases used in real-estate listings in the US in 2019. To compile this data, the company analyzed 1.2 million listings across the country along with 65 million words.

These words were broken down into eight categories: the most-used keywords, the most-used features and amenities, the most-used luxury features and amenities, the most-used keywords by room, the most-used adjectives, and the most-used brand names. The most-used features and amenities category was also further broken down by listing price range and region.

Of the 65 million words analyzed in this study, the five that are used the most in listing descriptions across all price ranges and regions are "home," "room," "bedroom," "bath," and "flooring." The study also found that of all the features and amenities described in the 1.2 million listings, the five that appear the most are "granite countertops," "hardwood floors," "stainless steel appliances," "open floor pan," and "fenced backyard."

Luxury home listings more commonly feature very different amenities when compared with moderately-priced home listings

When it comes to word choice broken down by price range, the study revealed that despite a major price jump, the two most popular features and amenities that appeared in listing descriptions for homes between $250,000 and $999,999 are "granite countertops," and "hardwood floors."

For homes priced between $1 million and $4.9 million, the top two most popular features and amenities used in listing descriptions are "hardwood floors" and "gourmet kitchen."

On the contrary, for listings over $5 million, the top-word rankings clearly showcase the level of luxury that's expected with a higher price tag. The top three features and amenities used in these higher-end listing descriptions are "chef kitchen," pool and spa," and "ocean views" — the third of which has been increasingly valued by ultra-high net worth homebuyers in recent years.

The study even breaks down word choice according to region. For example, in the Northeast and the Midwest, the three most popular features and amenities in listing descriptions are "hardwood floors," "granite countertops," and "stainless steel appliances."

Commonly used words in real-estate listings often reveal market trends that can be broken down by budget, location, and even rooms. In fact, Point2Homes found that of the most popular keywords used to describe kitchens, the top two are "open kitchen" and "updated kitchen."

And, while using certain language in listing descriptions can prove to be successful, good descriptions showcase more than just careful word choice. According to Zillow, a successful listing description should also mention popular brand names of things like appliances, upgrades, and unique features. It should also be checked for both grammar and accuracy.

Read the full report at Point2Homes »

SEE ALSO: The 15 best states for America's middle class, ranked

DON'T MISS: Here's what $3,000 a month in rent will get you in 13 major US cities

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These are the hottest fintech startups and companies in the world

Sat, 01/18/2020 - 8:05pm  |  Clusterstock

It's a fascinating time for fintech.

What was once a disruptive force in the financial world has become standard practice for many industry leaders. 

Fintech industry funding has already reached new highs globally in 2018, with overall funding hitting $32.6 billion at the end of Q3.

Some new regions, including South America and Africa, are emerging on the scene.

And some fintech companies, including a number of insurtechs, have dipped into new markets to escape heightened competition.

Now that fintech has become mainstream, the next focus is on the rising stars in the industry. To that end, Business Insider Intelligence has put together a list of 10 Up and Coming Fintechs for 2019.


Total raised:   £1.9 million ($2.5 million)

What it does: Coconut is a UK-based current account and accounting platform for small- and medium-sized businesses (SMBs).

Why it's hot in 2019: Next week, Coconut will launch its first subscription service, dubbed Grow, which will bundle unlimited invoicing and end of year tax reports, for £5 ($6.51) a month. This will make it a very attractive option for SMBs, that conventionally don't have a lot of time on their hands to handle their accounting.


Total raised: $282 million

What it does: Brex is a US-based corporate credit card provider, which initially focused on serving startups.

Why it's hot in 2019: The startup gained unicorn status in 2018, only months after it launched its first product. Now, after receiving debt financing worth $100 million, Brex wants to target larger enterprises with its topic — opening it up to a whole new set of customers and helping bring the company to the next level.

Want to get the full list?

There's plenty more to learn about the future of fintech, payments, and the financial services industry. Business Insider Intelligence has outlined the road ahead in a FREE report, 10 Up and Coming Fintechs for 2019

>> Download the report now

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THE ONLINE MORTGAGE LENDING REPORT: How banks are striking back against Quicken Loans and other digital-first lenders in the $9 trillion US mortgage market

Sat, 01/18/2020 - 6:05pm  |  Clusterstock

Despite the mortgage space representing the largest US lending market — with debt sitting at $9.2 trillion — it's been the slowest to digitize, and incumbents have had little incentive to remove friction from the customer application process.

The customer experience has been hampered by a time-consuming process that requires spending hours filling out an application and gathering documents, a lack of transparency about the status of the process, and uncertainty about what outstanding documentation could be requested later. And with no viable challengers to the status quo, incumbent lenders had little reason to overhaul this process.

But Quicken Loans turned the mortgage industry on its head with the introduction of Rocket Mortgage, an online mortgage application that takes less than 10 minutes to complete, in November 2015. Its product simplified the mortgage process by offering a clean and quick online application form, allowing online information verification, and providing conditional preapproval within minutes. And in Q4 2017, Quicken became the largest US residential mortgage originator by volume, surpassing Wells Fargo for the first time.

Rocket Mortgage helped validate the digital mortgage sector and bring a number of other alternative online mortgage lenders to the fore. We've seen players like Lenda (now Reali Loans) move into mortgage purchases around the time Rocket Mortgage was introduced and launch its online mortgage offering early in 2016, for instance.

And while big banks have seen their share of the market shrink since the 2008 financial crisis, they can now unlock the potential of advanced mortgage tech to act against the threat of nonbanks and alt lenders and claw back some of that lost market share.

And some large FIs, including Wells Fargo, JPMorgan Chase, Bank of America (BofA), SunTrust, and TD Bank, have already unveiled their own digital mortgage lending platforms that help them enhance the customer experience, shave down costs — by cutting labor expenses or reducing the possibility of fraud, for example — and drive a more significant opportunity in residential mortgages.

In this report, Business Insider Intelligence will examine the current state of the mortgage lending landscape and how technology has enabled alt lenders to transform the home loan process from application to closing. We will then explore how legacy banks are responding to the threat of digitally advanced competitors by unveiling their own online mortgage solutions and offer recommendations for FIs looking to enhance their mortgage offerings.

The companies mentioned in this report are: Ally, Bank of America, Chase,, Black Knight, blend, eOriginal, Loan Depot, Quicken Loans, Reali Loans, Roostify, SoFi, SunTrust, TD Bank, US Bank, Wells Fargo

Here are some of the key takeaways from the report:

  • Technology has enabled digitally advanced nonbanks and alt lenders to disrupt the mortgage process, transforming the application process and, to an extent, digitizing and automating underwriting and closing.
  • Banks are responding to the threat of fintechs by launching their own digital solutions, often in partnership with mortgage software and service providers.
  • Other FIs looking to enhance their mortgage offerings could leverage technology and partner with providers to tap into consumers' growing appetite for digital mortgage solutions and avoid ceding market share to the competition.  

In full, the report:

  • Examines the current state of the mortgage lending landscape.
  • Details how fintechs have transformed the home loan market.
  • Highlights technology's impact across the various stages of the mortgage lending process, including application, underwriting, and closing.
  • Examines how legacy players are responding to the threat of digitally advanced nonbanks and alt lenders.
  • Outlines what banks should do to enhance their mortgage offerings and look for new revenue growth opportunities in the space. 

Interested in getting the full report? Here are three ways to access it:

  1. Purchase & download the full report from our research store. >> Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now
  3. Current subscribers can read the report here.

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2 steps to take control of your money again after a divorce, according to a financial planner

Sat, 01/18/2020 - 2:59pm  |  Clusterstock

  • Divorce is difficult both personally and financially, and rebuilding your financial life on your own can be difficult. 
  • A financial planner suggests that anyone dealing with divorce take stock of what their financial life will look like post-divorce, and decide where they want to be. 
  • Then, she suggests finding a financial planner to help achieve those goals with objective financial advice. 
  • SmartAsset's free tool can help find a financial planner near you »

Divorce is expensive.

Whether you're paying spousal support, paying down debt, or dealing with the costs of a divorce itself, it's not cheap. As Insider's Erin McDowell reports, the average cost of a divorce in the US is $15,000 per person for all the fees, mediation, and attorneys involved. 

If you're faced with figuring out how to rebuild your financial life after a divorce, the most important thing is to assess your situation, and then find a professional to help, according to Ylisa Sanford, a financial planner and Ameriprise private wealth adviser based in Santa Rosa, California.

1. Take stock of your current finances, and set goals for the future

Knowing where you're starting is the first step, Sanford says. "It's extremely important to start out not with implementing advice, but to start out with analysis," she says. "That really needs to be asking yourself, 'What is my new normal? What does my new life look like? And, where do I want to be?'"

"Part of what people are required to do in the process of divorce is go through their different expenses," Sanford continues. This might also be a good time to draw up a budget for your new life, check in on your saving and spending habits, and check on your retirement savings, too.

"I really suggest people start out with just analyzing where they are and where they want to be," she says.

2. Find a financial planner

Her next step: Find a good financial planner. "Start working with someone who, in my recommendation, can act as a fiduciary (someone who takes an oath to put your best interest first), and can provide objective financial planning advice," she says. Finding a planner who is fee-only, or paid only by client fees rather than by commissions through products they sell, can be a good place to start. 

Her suggestion is to find a financial planner who "you can collaborate with and have a very candid relationship with." After all, you'll be going through a lot with this person, so having someone you can be yourself with is critical. 

"What someone may want to do two months after a divorce, they may not feel the same way about six months later, simply because so much has changed in their physical and emotional health," Sanford says. Having a neutral party to help with your financial choices can be a big help after a divorce.

Sanford says it's all about choosing the right balance of personality and skills in a financial planner. "Find someone who understands the advantages and disadvantages of how you want to get assets from the marriage," she says. "Find someone who really understands what's in your best interest, can work with you, and who can work as a fiduciary," she says. 

SmartAsset's free tool can help find a financial planner near you »

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NOW WATCH: Apple forever changed the biggest tech event of the year by not showing up

Amazon is working to develop biometric scanners to link handprints to credit cards, allowing shoppers to buy with the swipe of their palm

Sat, 01/18/2020 - 2:37pm  |  Clusterstock

  • Amazon is working with credit card companies to create terminals to allow users to pay for items with biometric data from their handprint, The WSJ reported.
  • The online retailer previously patented such technology, which had been presumed to be used at its Whole Food stores
  • Amazon currently allows shoppers at its Amazon Go grocery store to pay for items without ever going through a checkout process by downloading the Amazon Go app.
  • The technology could give Amazon more information about consumer spending habits, which could allow them to charge a higher rate to advertisers. 
  • Visit Business Insider's homepage here.

Amazon has plans to create payment terminals that would allow shoppers to link a credit card with their own handprint, allowing them to pay at brick-and-mortar stores by simply waving their hand across a scanner, according to a report Saturday from The Wall Street Journal

The WSJ reported that discussions to create the pay-by-hand terminals are in their early stages, though Amazon has already begun the development process with Visa and is in talks to work with MasterCard. 

Amazon's plans are the latest instance of big tech encroaching into the financial industry. In 2014, Apple began offering Apple Pay, a service that allows users to pay with a tap of their phone or watch on an NFC reader. Last year, the company partnered with Goldman Sachs to launch Apple Card.

A previous Business Insider report in November 2019 detailed Google's plan to allow users to open checking accounts – part of a partnership with Citigroup and Stanford Federal Credit Union. Those plans are expected to materialize sometime this year, per the report. 

JPMorgan Chase, Wells Fargo, and Synchrony Financial have discussed linking their cardholder's accounts with the Amazon palm payment technology, though as The WSJ noted, card companies are in the process of trying to determine whether companies like Amazon, Apple, and Google intend to work as collaborators or competitors. Some companies worry that in the long run, these tech giants could eliminate them from the equation entirely, per the WSJ report. 

Card issuers have other concerns too, like how customers would be able to store multiple cards using their biometric handprint, and how they would be able to choose between the cards when making a payment. The companies are reportedly also worried about how Amazon would stop a thief from linking a stolen card to their own handprint, per The WSJ report. 

Another hurdle, The Wall Street Journal noted, will be calming consumers' worries around providing more personal data, in this case biometric data, to big tech companies amid the industry's myriad of scandals. Per The Wall Street Journal, in collaborating with well-established card issuers, Amazon hopes to gain their knowledge and resources in maintaining consumer security. 

As The Wall Street Journal noted, it's not Amazon's first foray into unique payment methods, either. At its Amazon Go grocery stores, patrons log into an app on their phone and then sensors in the store track what items customers pick up. Customers can leave the store without ever physically paying, as they're automatically charged when they take items from the store.

It's not the first time Amazon has hinted at such plans. In December 2019, Amazon patented technology that would allow the company to identify individuals via their handprint, by detecting unique identifiers like wrinkles, creases, and bone structure. The New York Post said such technology could be used at Amazon's Whole Food stores.

At the time, Recode reported the patent could also be useful at Amazon Go stores, because it could provide a way for consumers to shop without having to download the Amazon Go app to their phones, though the report Saturday from The Wall Street Journal indicated that Amazon's intentions with the scanners go beyond their own marketplaces.

Sources familiar with the project told The Wall Street Journal that the data collected, including where and when people shop, would be stored on Amazon's servers. This could allow Amazon to market products to consumers using their brick-and-mortar shopping habits. The Wall Street Journal said, in turn, Amazon could charge higher prices to advertisers, as they have more information about consumer shopping behavior. 

Read more: 

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NOW WATCH: The surprising reason Americans drop a ball on New Year's Eve

This Harvard-educated, NASA-qualified, Navy SEAL gives his kids this simple advice every day

Sat, 01/18/2020 - 12:45pm  |  Clusterstock

  • US Navy Lt. Jonny Kim, a Navy SEAL and Harvard-trained physician, graduated from NASA training and became an internet celebrity.
  • Kim said he first knew of the internet jokes after his friends and members of his Navy platoon sent him the memes.
  • Kim said none of his career decisions were prompted by chasing medals or to seek approval, and that he makes sure that he imparts that outlook to his children.
  • "I never want my children to ever feel like they need to be a SEAL, or that they need to go into medicine, or be an astronaut in order to please me — because I don't think that's very fair. I just want them to live their own lives."
  • Visit Business Insider's homepage for more stories.

Republican Sen. Ted Cruz of Texas joked that he felt "horribly, horribly inadequate" while speaking in front of a group of newly-graduated NASA astronauts on Friday.

"What the heck have we been doing with our lives," Cruz said of himself and his Republican colleague, Sen. John Cornyn, and pointed to one of the astronauts in particular, US Navy Lt. Jonny Kim.

"You're a Navy SEAL, with a degree to Harvard Medical School," Cruz said of Kim. "That's just ridiculous. I mean, he can kill you and bring you back to life — and do it all in space."

Since his graduation, Kim's accomplishments have catapulted him to viral fame.

"If there was a movie that came about this guy, you would've never believed it," said one of the co-hosts for the veterans-themed podcast "Zero Blog Thirty."

Kim said he first knew of the jokes after his friends and members of his Navy platoon sent him the memes.

"I think they're funny," Kim told Business Insider in an interview. "I don't take any of them seriously, but I appreciate the spirit and the comedy that people put into it."

Kim, a 35-year-old Los Angeles native, graduated from the latest astronaut candidate class and is now eligible to partake in NASA missions. He is the second Korean-American NASA astronaut after Mark Polansky.

His resume includes Navy SEAL training and over 100 combat missions during two deployments to Iraq, where he served as a sniper, medic, and navigator; he earned a Silver Star for battlefield valor. He then graduated from the University of San Diego, where he earned a degree in mathematics; and then became an officer in the US Navy.

'I made a promise to those guys who died'

Following his commission, he attended Harvard Medical School and graduated in 2017. His reason for attending one of the world's top medical schools is based on his former teammates, who were shot during a deployment to Ramadi, Iraq, in 2006. Two of his friends were killed, including one who was shot in the face.

"It was one of the worst feelings of helplessness," Kim said to The Harvard Gazette in 2017. "There wasn't much I could do, just make sure his bleeding wasn't obstructing his airway, making sure he was positioned well. He needed a surgeon. He needed a physician and I did eventually get him to one, but … that feeling of helplessness was very profound for me."

Despite an impressive portfolio, Kim said none of his career decisions were prompted by chasing medals or to seek approval, and that it is imperative to "follow your heart."

"For me ... after having some intense wartime experiences where I lost a lot of good friends that I've loved, I made a promise to those guys who died — that I'd do everything in my power for the rest of my life to make this world a better place," Kim said to Business Insider. "Because those men were great human beings and they left a void."

"I've chased that, going into medicine," Kim added. "It wasn't as simple as, 'I want to do this because it's an accomplishment.' It's never been that shallow for me."

As a father of three kids, Kim says he makes sure he imparts that outlook on life for his children: "My only expectation, which I tell my kids very, very often, is that they follow their heart."

"My kids, I love it when they tell me, 'Abba, I want to be an artist,'" Kim said, referring to the casual, Korean word for "dad." "And I say, that is awesome ... I just want you to be happy and to follow your heart."

"I never want my children to ever feel like they need to be a SEAL, or that they need to go into medicine, or be an astronaut in order to please me — because I don't think that's very fair. I just want them to live their own lives. I don't hesitate at every opportunity to remind my children of that."

SEE ALSO: 20 images from the biggest news of the US military in 2019

SEE ALSO: A former Navy SEAL commander has a checklist every new leader should review daily. Here's his best advice for avoiding 'imposter syndrome' and earning respect.

Join the conversation about this story »

NOW WATCH: A former Navy SEAL commander on how to handle stress

Carlos Ghosn's transformation from business icon to international fugitive was entirely predictable, industry leaders say. But his next act could surprise everyone.

Sat, 01/18/2020 - 12:12pm  |  Clusterstock

  • Carlos Ghosn, former CEO and chairman of the Renault-Nissan-Mitsubishi alliance, was arrested in Japan in late 2018 on allegations of financial malfeasance. His fall from power was the most extraordinary in the history of the auto industry.
  • Ghosn spent over 100 days in a Japanese jail, and posted millions in bail. While he was awaiting trial, he staged a dramatic escape at the end of 2019 from Japan to Lebanon.
  • He'd claimed he was innocent, but he was facing a nearly 100% conviction rate by Japanese prosecutors. Lebanon does not extradite its citizens to Japan.
  • Ghosn pledged to restore his reputation, and he accused Nissan of playing a "dirty game" to remove him from the alliance he'd built so that a deeper integration with Renault would be impossible.
  • Ghosn is a complicated business leader. This is the story of his rise, fall, and Hollywood-worthy escape from a Japanese justice system that he's accused of abusing his human rights.
  • Click here to read more BI Prime stories.

By early 2019, Carlos Ghosn had been through the wringer.

Haggard, gaunt, and handcuffed, he appeared in a Japanese court after being arrested at Tokyo's Haneda Airport on November 19, 2018. The authorities later indicted him on charges of concealing income and violating the trust of the company he'd rebuilt from crisis to the global powerhouse: Nissan.

Ghosn, then 64, was incarcerated at the Tokyo Detention House and held in solitary confinement. He'd already been arrested and rearrested three times. Anybody unfamiliar with the largely closed world of Japanese justice was getting a crash course in prosecutorial tactics; those who were familiar might've recalled the ordeal of Julie Hamp, who came to Japan to head up Toyota communications — the highest-ranking women ever at a Japanese automaker — in 2015 but who was arrested and held in custody for 20 days because she had Oxycontin shipped to her in the country following an operation. Never charged, she still resigned her position.

Ghosn would eventually be jailed for over 100 days, before being let out on $9 million in bail (after subsequent rearrest, his total bail would top $14 million). In April, he was arrested a fourth time, then released. Confined to a house in Japan's capital, his activities were monitored 24 hours a day.

In December, Ghosn released a statement confirming that he'd fled Japan through Turkey, an escape that would captivate the world and inspire comparisons to a spy movie. Tales circulated of Ghosn being snuck from jet to jet in a musical-instrument case, with the transfer managed by a former Green Beret turned mercenary security operative. Ghosn had fled Japan and was in Lebanon, the country of his youth, where he maintained citizenship, where he was widely revered, and where his face appeared on billboards above the message "We Are All Carlos Ghosn."

He would "no longer be held hostage by a rigged Japanese justice system where guilt is presumed, discrimination is rampant, and basic human rights are denied," he said is a statement at the time. "I have not fled justice," he added. "I have escaped injustice and political persecution."

The household-name CEO had become an international fugitive, pursued by Interpol, and effectively seeking asylum in one of his multiple homelands. Netflix had to deny rumors that it had inked a deal with Ghosn. The mighty leader hadn't just fallen; he'd slipped its chains and was on the lam. And without question, the disgraced hero was a celebrity again.

A celebrity CEO and auto-industry rock star

In November 2009, a younger Carlos Ghosn stood in the parking lot of Dodger Stadium, in Los Angeles, a man at the height of his power.

He was the most unlikely legend in the history of the auto industry, a diminutive, Brazilian-born, raised-in-Lebanon, educated-in-France citizen of the world who carried three passports. Ghosn, then in his mid-50s, had spent two decades in the relative business backwater of Michelin selling tires before jumping to Renault and forming an initially much-derided alliance with Nissan.

The LA event extended his strange rise. Ghosn had never spent time behind the wheel of a race car, as Enzo Ferrari had, his last name wasn't "Ford," and his early ascent had taken place in France, a country whose influence on the world's auto industry lagged behind the US, Germany, Japan, and, even more recently, South Korea. He wasn't introducing a new supercar, nor was he presiding over the launch of a hulking pickup or SUV, the moneymakers that Detroit cranked out by the millions every year.

Rather, Ghosn was showcasing Nissan's new Leaf all-electric vehicle, a homely hatchback (really a rejiggered Versa hatchback) that was the basis of what he called Nissan's "zero emission" strategy.

"It's a real car, not a golf cart," Ghosn told the scrum of reporters gathered in the November sunshine.

The Leaf prototype was barely more than a golf cart — offering only about 100 miles of range, it would appeal to the earliest of early adopters — but it presented Ghosn with the opportunity, using his characteristically brisk delivery, to proclaim that electric vehicles would make up 10% of global sales by 2020.

It was typical Ghosn sensei, a prediction from the heroic master of commerce, adopted by Japan and placed on a pedestal of renown: the trim little guy with the permanently furrowed brow, the dramatic eyebrows, surrounded by his lieutenants, wearing a neatly tailored suit but ditching the usual necktie (Southern California, after all), pontificating while the cameras clicked and the reporters scribbled.

There was no reason to doubt his foresight (although EVs would manage just over 1% of sales in his time frame). Ghosn was, in the conservative realm of the global auto industry — and the ultraconservative Japanese corner of the industry — a complete rock star (if anything, calling him sensei was an understatement). And he knew it. With the car business reeling in 2009 from the bailouts of General Motors and Chrysler by the federal government, followed the bankruptcies of two of the once formidable Detroit Big Three, and with auto sales in America having plummeted during the financial crisis, Nissan was on its way to selling over 800,000 vehicles in the US in 2010. Before the financial crisis, the company had stunned naysayers by racking up an outsized operating profit for several years, a mass-market automaker flirting with a 10% margin.

Ghosn's elevated league included CEOs such as Sergio Marchionne, who had led Fiat out of near insolvency, then engineered the Italian automaker's acquisition of Chrysler from Chapter 11, taking the car business' biggest basket case off the US government's hands. Marchionne aspired to be like Ghosn, who had a 10-year head start on his outspoken, chain-smoking, Canadian-born emulator. (After Ghosn's escape from Japan, he'd reveal he was in active discussions with Fiat chairman John Elkann to bring Fiat Chrysler Automobiles into the Renault-Nissan-Mitsubishi alliance. Nissan declined to comment on those claims.)

The tire salesman was now the go-to CEO in the industry, the subject of his own manga comic in Japan, his career documented in two books, one of which he wrote. In the 2000s, as he willed the Renault-Nissan alliance into being, he was courted by the swashbuckling corporate raider Kirk Kerkorian and Kerkorian's car-business guy, Jerry York, to bring a struggling GM into the alliance. (Ghosn also claimed that the Obama administration's Auto Task Force overseer, former investment banker Steven Rattner, had offered him the GM CEO job in 2009. Ghosn said he regretted not taking it.)

Ford scion Bill Ford, the great-grandson of Henry Ford, has already tried to hire Ghosn to fix Ford Motor Co., but the deal died when Ghosn demanded both the CEO and the chairman-of-the-board titles. Undeterred, Bill Ford tried again in 2006, but by then Ghosn might've seen the writing on the wall. The next year, Ford would post a nearly $7 billion loss in the fourth quarter, its largest ever. The company turned to Alan Mulally, a Boeing executive, who mortgaged the Blue Oval's assets to raise $23.4 billion just as the financial crisis was hitting. The daring move saved Ford from GM and Chrysler's fate.

Ghosn's titanic reputation derived from a combination of business brutality, peculiar charisma, a constitution that didn't appear to require rest or relaxation, a technocratic and highly rational mindset, and, perhaps most important, excellent timing. In the era of globalism, there was no more prominently global executive than Carlos Ghosn ("If Davos Were a Person, It Would Be Carlos Ghosn," Bloomberg declared in 2017). He might have had offices on the ground on several continents, but his natural headquarters was the cabin of a Gulfstream at cruising altitude.

In many ways, Ghosn's media image was at odds with his business talents. His core skill involved remorselessly wielding a blade, the oldest move in the book. The auto industry in the 1990s, when Ghosn left Michelin for Renault (with Peugeot, a carmaker that's bound up with France's postwar national character), was reluctantly adapting to extreme levels of competition. For decades, many auto executives had been able to avoid tough decisions — especially in France, where employment in the industry is a thorny political issue, bound up with national price and unions — because when times are good, an ocean of money is sloshing through the business. The trick is to avoid going belly up when the tide turns.

He was dubbed "Le cost killer" for his approach. "It's sexy, there's blood in it, there's meanness," he told the Financial Times in an interview from November of 2018, published the same month as his dramatic arrest in Japan on allegations of financial malfeasance but conducted when he still had the run of the globe, including restaurants in Paris, and could still captivate journalists on the Wall Street–City of London axis.

Ghosn often distanced himself from the notion that he was a reducer of companies; he was instead a self-styled visionary, charting a new course for carmakers held back by the influence of the state or the inflexible, hierarchical history of Japan's business culture, where Nissan has always existed in the long shadows cast by Toyota and Honda.

It was, in part, smoke and mirrors and luck. Nissan attacked Honda's market share in the US the old-fashioned way, by knocking thousands off the sticker prices of vehicles while Honda refused to undermine its profits in a race to the bottom. Nissan's full-size pickup, the Titan, sold in the mid-five figures annually and was no threat to Detroit, and the carmaker's US portfolio contained a lot of slow-selling sedans.

Still, when the market swung decisively to crossover SUVs, Nissan dealers were prepared to rake in sales with the Rogue, a compact SUV that put Nissan neck and neck with Toyota's RAV4 and Honda's CR-V.

"He's not flawless, not the perfect leader," Karl Brauer, the executive publisher of Kelley Blue Book and Autotrader and a veteran industry analyst, said. He said Nissan had bolstered sales in recent years, pursuing what he termed unrealistic goals, by leaning on profit-sapping incentives and fleet sales.

"That can work for a while," he said. And it did, until Nissan retreated from the tactics in the face of posting profitless quarters. Sales, understandably, took a hit, and the carmaker lost US market share. "The chickens have come home to roost," Brauer added.

But the daily trench warfare of the business — "You have to fight for every sale," Bill Ford once told me — wasn't for Ghosn. Nor was the type of deliberate and transparent planning that Mulally brought to Ford. Ghosn, by contrast, performed leadership. And he performed it well. He understood that in the era of globalism — when vehicles built on similar engineering platforms but sold in multiple countries were mechanical commodities, and when money could flow in and out Renault and Nissan on untamed rivers — a CEO needed to symbolize his ideology. His enemy, as he was happy to remind the media once he had fled Japan and was pleading his case from Beirut, was consensus. Ghosn was running the corporate equivalent of a country, and long before Donald Trump became president in 2016, Ghosn was of the "I alone can fix it" school of strategy

Leaders in Japan, Germany, and Detroit were hunkered down and huddled with their teams, oppressed by the sheer complexity of building and selling millions of cars and trucks every month. They were provincial, small-minded, clubby. But Ghosn was expansive, globetrotting, cosmopolitan. He didn't sweat the details — he had people to do that for him. In over a decade of covering him and his adventures, I never once heard him enthuse over a specific car. No mere product was bigger than his masterpiece, the alliance itself. Even the Leaf was simply a means to a greater end: the alliance's prophetic dominance in a world going electric.

"He was never much of a rule follower, never much for boundaries," Dan Neil, the Pulitzer Prize-winning auto critic for The Wall Street Journal, told me," adding that Ghosn was "the most stylish, dandyish of car executives, up there with John DeLorean and Gerry McGovern." (DeLorean was an industry legend who flamed out in spectacular fashion with his stainless-steel-skinned sports car in the 1980s, now better know from the "Back to the Future" films, and McGovern is the outspoken design head of Land Rover and has been known to undertake wardrobe changes when showcasing a new vehicle.)

Outside the industry, Ghosn looked dazzling, but to many insiders he was a merciless egomaniac, obsessed with his own media coverage, fixated on his compensation, and determined to prevent underlings from challenging his imperious control of the alliance. He had enemies but didn't care. More dangerously, he was a Westerner who had amassed power in what was both derisively and admiringly referred to as "Japan Inc." — the post-World War II merger of Japan's nationalistic culture with its astonishing business recovery from its almost complete devastation in the 1940s.

For a non-Japanese, that power is borrowed at best. Ghosn pushed his luck too far in 2018, attempting to execute a deeper integration — but not a full merger — of Nissan and Renault. It was not, as Japan Inc. saw it, a merger of equals. He went from being a man standing in the sun in Los Angeles in 2009 to being a man locked up in a Tokyo jail cell in 2019.

The ensuing months — which saw Ghosn imprisoned for more than three months, cut off from communication with his wife, stripped of his chairmanships of Nissan, Renault, and Mitsubishi, released and rearrested repeatedly, placed in legal limbo after posting millions of dollars in bail money, awaiting a trial on only one of the charges lodged against him at an undetermined future date — did not depict Japanese justice in a flattering light. Medieval was more like it. Ghosn wasn't simply in legal trouble. He was being humiliated, degraded, destroyed.

Free in Lebanon, he called it an "unspeakable ordeal," imposed on him by a "corrupt system, designed to break my spirit and coerce my confession."

It looked nothing like what would've happened to Ghosn in the US. But as an industry source told me, "People don't get it — that's just how it is in Japan."

The 3 phases of Carlos Ghosn

Ghosn's ascent in the global auto industry, once he left Michelin after 18 years, could be separated into three phases.

The first phase, when he was newly arrived at Renault in the 1990s and preparing to create the alliance with Nissan, featured a down-to-earth leader who, according to a source who worked closely with him at the time, would carry his own bags off a commercial airline. Sure, he flew first class, but it was a far cry from a later version of Ghosn, cloistered in his Gulfstream.

This was when Ghosn developed his reputation for both ruthlessness and operational genius.

"He was super smart, driven, and had incredible energy," former GM, BMW, and Chrysler executive Bob Lutz, one of the most outspoken people in the business, told me shortly after Ghosn was arrested in 2018. (Lutz had known Ghosn for decades, going back to the Michelin days.)

"He knew everything," another source told me. "He made decisions quickly and took responsibility."

In the risk-averse culture of Japanese corporations, this was a revelation. The buck stopped with Ghosn: If a vehicle was a hit, he took credit, but if it failed, he accepted the blame.

(Ghosn continued to demonstrate an ability to manage an enormous amount of information when he summarized and countered the charges against him at a press conference held on January 8, 2020, ranging from details of funds that were sent to the Middle East to declines in market capitalization at Nissan, Renault, and Mitsubishi.)

Phase two saw the Ghosn mythology take shape, as the alliance thrived against all odds (such match-ups in the auto industry have a rocky track record: Chrysler was at various times conjoined with Daimler and collaborating with Maserati). Even though Nissan's resentment toward Renault's eventual 43% stake was festering by 2018, in 1999 Nissan was a wreck, in desperate need of $5 billion from the French, with Ghosn part of the deal that yielded a 37% Renault stake and that promised to return Nissan to profitability after the automaker had lost billions of dollars and taken on billions more in debt.

"It was brilliant to do an alliance instead of a full merger, with all the delays and politics that would have involved," a source who has worked for major US and European carmakers said. (Unequal voting rights, with Renault harboring decision-making power, were, however, always a sore point. Ghosn said that it created a "big bitterness" in Japan.)

These were the golden years, when Ghosn became Nissan's CEO in 2001 and began to groom — at least to outward appearances — his successors. Men like Carlos Tavares, now CEO of France's PSA Group, which bought GM's long-struggling Opel division in Europe in 2017. Tavares is turning Opel around and has undertaken a 50-50 merger with Fiat Chrysler Automobiles that would create the world's second-largest automaker, behind the VW Group. From Portugal, Tavares shared a language with the Brazilian-born Ghosn — and learned to share an appetite for slashing costs.

And men like Andy Palmer, a street-smart punk-rock enthusiast from England who spent over two decades at Nissan before taking his marketing acumen to Aston Martin in 2014. It was no easy assignment: Aston had endured seven bankruptcies. But Palmer steered the automaker, famous for its James Bond associations, to a 2018 public offering (but not out of the woods, as the marque almost immediately began to renew its historic travails, as a public company).

These were high-profile assignments for high-profile executives. But they were also the results of Tavares and Palmer having few choices within Renault-Nissan. There was an iron ceiling, and it was named Carlos Ghosn.

Phase three occupied the period from the late 2010s through Ghosn's semiretirement, when he stymied the desires of consiglieres such as Tavares to take over chief-executive roles at the alliance and, ominously, began to believe his own endlessly adulatory press, according to industry observers.

Nissan upgraded his private jet to the top-of-the-line Gulfstream V (and later upgraded it again to a G650). He shuttled among his numerous residences, cultivating what Lutz called a "God-like CEO" status. He had US dealers ship a small fleet of Nissan Armada SUVs to Brazil, for his personal use.

"He was a total despot," Lutz told me "He'd hire people, and, after a certain period, fire them with never a word of explanation."

Lutz added that he'd heard stories about how Ghosn reminded the peons on the industry of his lofty position by swaggering around auto shows while a lackey played the Great Man's personal theme music on a boom box. The image fit. My lasting memory of Ghosn during this period was watching him, in the aftermath of the election of Donald Trump in 2016, hold court at the 2017 Detroit Auto Show. Clearly baffled by what Trump might mean for Renault-Nissan and its global operations, Ghosn attempted to define what he thought "America first" might mean, before passing the mic to one of several underlings to fill in the blanks.

It was a preview of Ghosn's looming political blind spot. His trust in his team was his Achilles' heel. When he was arrested in 2018, he later said he was shocked. He had no idea it was coming.

Obsessed with his compensation and haunted by his reputation as nothing but a cost-cutter

During his imperious phase, Ghosn divorced his wife of 28 years and remarried four years later, celebrating his nuptials with a lavish party at the Palace of Versailles outside Paris. And while the alliance continued its impressive run — by 2016, it would add Mitsubishi, and it ended 2018 as the largest automaker by sales in the world, at nearly 11 million vehicles — Ghosn privately seethed, as he had for years, over his compensation and the perception that his success owed more to being Mr. Cost Killer than it did to any overarching vision for the future.

He was, for example, nagged by Toyota's progress with gas-electric hybrids, such as the Prius, a source told me. Beneficially, this drove Ghosn to quixotically support the Leaf at a time when there was almost no market for battery-electric vehicles. Leaf would go on to become the best-selling electric car of all time.

The fixation, however, also led Ghosn to become an advocate for Better Place, a startup that emerged from Israel's tech scene in the mid-2000s, pursuing battery-swapping as a solution to the limited range and long recharging times of electric cars. Better Place's founder and CEO, Shai Agassi, was a charismatic Davos Man who complimented Ghosn's evolving third-phase persona, and in 2008 Renault-Nissan struck a deal with Better Place to supply electric vehicles to the company. Battery swapping never took off, and, by 2013, Better Place was heading into a liquidation bankruptcy.

Ghosn also continued to nurse grudges, particularly when it came to money. He had perks galore, including homes in Brazil and Lebanon owned by Nissan (Ghosn is now living in the Beirut property). But like all high-ranking Japanese auto executives, he was paid less than his peers outside Japan. He was underpaid relative to, say, General Motors CEO Mary Barra: She made $23 million in 2017 while Ghosn made $17 million. But Barra's compensation was a mix of salary and stock, while Ghosn brought home his millions through three separate companies.

The alliance had responded to his complaints by concocting assorted sketchy compensation arrangements with Ghosn. None of it would have passed muster at a less complicated enterprise, but the sprawling, multinational nature of the organization made it possible.

In his defense, Ghosn said some payments in question were both signed off on by Nissan and considered as deferred compensation and never dispensed.

In response to a request for comment, Nissan shared a "Special Report to Improve Governance," delivered to the board of directors on March 27, 2019. It detailed Ghosn's compensation arrangements and explained why they were both unorthodox and how they led to Ghosn's dismissal from Nissan, following his arrest. Nissan declined to comment on the charges against Ghosn in Japan. (Renault didn't respond to a request for comment, but Nissan provided references to Renault and Mitsubishi's media statements.)

Nissan's North American communications representatives provided a statement. "Nissan discovered numerous acts of misconduct by Ghosn through a robust, thorough internal investigation," the company said, adding that it "determined that he was not fit to serve as an executive, and removed him from all offices."

It went on: "The internal investigation found incontrovertible evidence of various acts of misconduct by Ghosn, including misstatement of his compensation and misappropriation of the company's assets for his personal benefit."

For Ghosn, the pay maneuvers were not only justified — they were the right thing to do, given his perceptions about his pay disparity. He resented that people resented him for wanting what he thought he deserved, a source explained.

The situation might've persisted even as Ghosn relinquished his CEO roles and entered his 60s. But then he miscalculated.

Again. He had already miscalculated in anointing Hiroto Saikawa as Nissan's CEO in 2017. Saikawa represented the restoration of Japan Inc. at the helm of Nissan, where Ghosn's reign had caused the Japanese to resent the outsized contribution, compared to Renault's, that Nissan made to the alliance's bottom line.

As chairman of the alliance, Ghosn had undertaken a gamble. The merger that he had so deftly avoided in the late 1990s and early 2000s would no longer be dodged. Nissan and Renault would become one. And FCA could join, creating a global auto giant.

The response, a source told me, was an orchestrated removal of Ghosn from power by Japan Inc. It was a palace coup, with the unwitting king apprehended after he got off his private jet at Tokyo's Haneda Airport, herded into a small room where authorities were waiting, then thrown in jail for months, left to the devices of Japanese justice and its near-100% conviction rate.

In an emailed statement, Japan's minister of justice argued that the high rate of conviction was a positive feature of the nation's system. "There is an established practice in Japan's prosecutors offices only to indict a suspect where there is a high likelihood of court's conviction based on sufficient evidence, so as to avoid an innocent person to suffer from the burden of bearing judicial expenses," the statement read.

Of course that explanation didn't alter the widespread impression that in Japan one was presumed guilty before being proven innocent. And once Ghosn fled to Lebanon, what had been a theory about why he'd been lured to Japan only to be arrested after his plane landed became a key part of his official defense.

"The facts demonstrate that the investigation was never about finding the truth; it was initiated and carried out for the specific, predetermined purpose of taking down Carlos Ghosn to prevent him from further integrating Nissan and Renault, which threatened the independence of Nissan, one of Japan's iconic, flagship companies," his lawyers argued in a statement released a week after his escape, responding to Nissan's claims about its own probe into Ghosn's alleged malfeasance.

Ghosn's control had been under assault for some time. At Nissan board meetings, executives would nod approvingly as Ghosn outlined plans — then block them. Ghosn was uniquely vulnerable to this stalling tactic because he had always ringed himself with yes-men.

"This type of person is surrounded by sycophants 24/7," Lutz told me. "Nobody can survive that much adulation. They slowly believe that rules are not for them."

Ghosn's loyalists, however, just appeared to affirm his directives. Behind his back, they were sharpening knives.

Resentment had built up. An industry source told me that Nissan executives who had flourished under Ghosn were enraged that he was screwing up a sweet deal. He had pushed his luck too far, based on an exaggerated impression of his own capabilities and reputation. He was wrecking the good work that everyone had accomplished at Nissan and for the alliance.

Ghosn took the opposite view. He argued that he'd stepped back from Nissan in 2017 to concentrate on fixing Mitsubishi and tending to the alliance. But the leaders he put in charge took a growing group of companies and $20 billion in cash and sent Nissan into a tailspin.

A 4-decade career comes to an end in a single day — or does it?

Ghosn's reign, it turned out, was enforced by the cultish devotion he'd engendered over three decades. It was so fragile that it collapsed, utterly, in one day. By the time he made his daring escape from Japan as 2019 was giving way to 2020, he'd been a guest of the Japanese courts for over a year and was CEO of nothing, chairman of nothing. His fate was entirely uncertain, despite Lebanon's lack of an extradition treaty with Japan.

Even his professions of innocence were greeted with suspicion. He accused Nissan's leaders of treachery, of attempting to distract from their own incompetence. In a video released by his lawyers in April 2019, before he was rearrested, he said Nissan has played a "dirty game."

Nissan stuck to its official statement. "The consequences of Ghosn's misconduct have been significant," the company said. "In addition to his prosecution in Japan, the US Securities and Exchange Commission concluded that Ghosn's conduct, including his schemes to underreport his compensation, was fraudulent." (Ghosn paid a $1 million fine to the SEC, without admitting guilt, while Nissan paid $15 million to settle an investigation over $140 million in pay that was allegedly arranged for Ghosn but never distributed.)

Ghosn had already lost focus. Sympathy for the Cost Killer had arisen because he was seen as a victim of harsh Japanese justice. He was like a political prisoner, denied due process, cruelly kept from talking to his wife, at times confined to a spartan jail cell, later prohibited from accessing the internet anywhere but at his lawyers' office, his cellphones confiscated along with his passports.

It was an extraordinary, disturbing approach to take with someone alleged to have committed white-collar crimes. Ghosn hadn't murdered anyone, after all, nor plotted against the Japanese state. At his worst, he was a vainglorious hustler, not a violent criminal who needed to be behind bars.

But Ghosn's goal, it seemed, wasn't to put this system on trial but rather to strike back at Nissan. By then he was swinging at ghosts. Saikawa had stepped down as he, too, became ensnared by the widening investigation of the carmaker's financial policies. (Ghosn accused Saikawa's successor, Makoto Uchida, of being a coconspirator in his arrest.)

Ghosn sounded like he sought restoration. But his career was over, his legend in ruins. His best play was to stoke international disgust for his treatment, to become an advocate for reform on the Japanese systems.

I was told not to bet on that. He was going to settle scores. And to a degree, he did, holding a press conference in Beirut (conducted in English, French, and Arabic) that lurched from a detailed defense against the various charges to a portrayal of himself as a victim in Japan to attacks on Nissan executives.

"Power corrupts, and absolute power corrupts absolutely," Lutz told me, quoting Lord Acton's dictum.

In Ghosn's case, we might add, "And when it does, it vanishes forever."

Or does it?

"Whatever we think now, he was the man who saved Nissan when Nissan needed saving," Brauer said. "Some consulting, a board seat … then back in a leadership position. I wouldn't be surprised."

If Ghosn could prove his innocence, he could stage a comeback even more impressive than his turnaround of the 86-year-old Japanese company.

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NOW WATCH: How can a CEO cut jobs and still be a hero? We asked Carlos Ghosn, who has famously turned around several companies

When my dad died unexpectedly at 55, his life insurance was my security blanket. So it's a no-brainer to spend $134 a month to protect my own kids.

Sat, 01/18/2020 - 10:18am  |  Clusterstock

  • My dad was a healthy, active man until he developed Lou Gehrig's disease. When he died two years after his diagnosis, his life insurance meant my family didn't have to stress financially while we were grieving.
  • Despite that, I still didn't get life insurance for myself. At the time, I didn't have anyone depending on my income so I figured I didn't need it.
  • But once I became pregnant with my first child, my husband and I bought policies right away. Now, I pay about $1,600 a year for peace of mind.
  • Life insurance will never be cheaper than it is today. Lock in your rate with Policygenius »

Nothing in life is predictable. I learned that truth when my father, a healthy, athletic, 55 year old, was diagnosed with Lou Gehrig's disease in 2009. The disease was swift; my father died two years after his diagnosis. 

For many people, the unexpected loss of a vibrant family member will lead to questions of financial stability. My father was, after all, the head of our household, and the one who was responsible for managing our financial futures. 

But he was also savvy. When he was much younger, he had invested in a life insurance policy. When he died, that meant that no one had to worry about survival in the days, weeks, months, and years after his death. 

When you're busy picking up the pieces from the loss of a loved one, financial survival can be low on the list of priorities. I was fortunate that I didn't have to sort through anything beyond my own grief. 

Still, death can feel far off when you're in your 20s and 30s. Life insurance for myself wasn't actually something I considered after my father's death. No one was counting on me for their survival, after all. So what did it matter? 

Becoming a parent changed everything

I didn't start thinking about life insurance in any meaningful way until I became pregnant myself. Suddenly, my life was about more than just me. How was I going to provide for a baby if my husband, our primary breadwinner, died? How would he manage to afford childcare without my income, in the event that something happened to me? 

The world before you have children feels full of possibility. And while becoming a parent is joyful and emotional and unparalleled, it also comes tinged with a little darkness. 

While the looming specter of death feels distant for an ordinary 30-something, that specter feels a lot more real once babies enter the picture. 

At night, I contemplated what would happen if one of us died, cataloging unlikely scenarios, falling prey to the worst impulses of predicting tragedy. We are healthy parents. But so was my dad. Didn't we need a safety net? 

And so, my husband and I embarked on a journey to secure life insurance policies. Because we were a little older — 36 and 41 — whole life insurance policies were not an option. 

Whole life insurance remains in force for a person's entire lifetime, assuming you pay your premiums. Once the insured dies — no matter how many years go by in between — the policy pays out to the beneficiaries. At our ages, whole life was just too expensive.

Term life insurance, on the other hand, is a type of insurance that provides coverage for a set period of time. It is a less expensive option, especially for older people. 

Life insurance is loosely based on life expectancy, so the older you are (and the more health problems you develop), the more expensive your policy. Given our circumstances, and the fact that we became parents a little later in life, term policies were the right fit for us. 

Life insurance brings me peace of mind

I can't be sure, in motherhood, that I will always have the answers, just like I can't be sure that I will always have the same amount of money in my bank account. Situations change. Jobs change. The only thing I'm certain about, now that I'm a parent, is uncertainty. 

But, even though I don't necessarily know where I'll be in 10 years, or what our lives will look like, I know that my children will be protected, even if I'm not around. 

I took out a $2 million life insurance policy, expecting that the money, if necessary, could cover my children's college education, as well as aid in their care without me here. 

It's a 30-year term and, because of my overall good health and age, my premium comes to $134 a month, or a little over $1,600 a year. I choose to pay the premium annually because it saves me a little money, but I put aside the money each month in a savings account. 

It may seem macabre to contemplate how my children's lives will go on without their parents. We all want the best for our kids, and imagining worst-case scenarios feels, at times, like a spiral into needless fear. 

But, as someone who lost a parent prematurely, I also know that the untamed grief that comes with loss should not arrive with any additional unsolvable problems. 

Regardless of age, whether they're 3, 13, or 33, I want my kids to be able to survive once I'm no longer here to take care of them. Providing them with a security blanket in the form of life insurance helps me sleep a little better at night. 

And so now, regardless of what our financial life looks like, or how much we are — or are not — able to save, I feel confident that my kids (there are two of them now) will be OK. 

Parenting is a scary, fraught experience. For me, life insurance is the security blanket that makes everything a little less scary. 

Term life insurance will never be cheaper than it is today. Lock in your rate with Policygenius »

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NOW WATCH: The bizarre history of the Yule Log Christmas special

The man who founded a biotech that got sold to Eli Lilly for $8 billion reveals why he's staying on at the pharma giant

Sat, 01/18/2020 - 9:57am  |  Clusterstock

It's been a year since Loxo Oncology sold itself to Eli Lilly for $8 billion, after a whirlwind 18-day sale process.

And in an unusual turn, Loxo CEO Josh Bilenker is still with the company. 

It's not uncommon for biotechs to be acquired and absorbed into the development pipelines of larger pharmaceutical companies, at which point the executive teams depart to join other endeavors.

Read more: The inside story of Eli Lilly's 18-day race to secure an $8 billion deal in time for the 'Super Bowl' of healthcare

But in the case of Loxo, Bilenker, along with Jake Van Naarden, Loxo's chief business officer and Nisha Nanda, Loxo's chief development officer, have stayed on to lead the business unit.

As of January, the organization has combined with Lilly Research Laboratories cancer research to create a company-within-a-company model. When the drugs are ready to launch, their responsibility will transfer to Anne White, who leads the oncology business unit at Lilly. 

"I think founders, if they care about the medicines they help create, should care about seeing them approved and launched," Bilenker told Business Insider on the sidelines of the J.P. Morgan Healthcare Conference in San Francisco. "There are a lot of examples in our industry where people wipe their hands the minute the deal closes."

Never miss out on healthcare news. Subscribe to Dispensed, our weekly newsletter on pharma, biotech, and healthcare.

When that happens, he said, during the hand-off there's room for error, and a lot of the oral history around how the drug's been developed gets lost.

"That hurts the medicine," he said. "It shouldn't happen. If you're a team, you're committed to seeing that through."

Loxo was founded in 2013 by Bilenker, a former medical officer at the FDA. The company's taken the approach of developing drugs that act on cancerous genetic mutations rather than focusing on the type of cancer a person has. 

The FDA approved its first drug, Vitrakvi, in 2018 not by tumor type, but rather by the genetic mutation the drug targets. Bayer has full rights to the drug, but Loxo has others in development including selpercatinib, a drug that targets mutations in the RET gene found in some non-small-cell lung cancer patients and in some thyroid cancer patients. 

"It was always very clear that they were going to make sure that Selpercatinib was successful," White said. "And I was very impressed by that."

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NOW WATCH: Here's what happens to your brain when you get a concussion

'We fell short in Q4': WeWork only hit 73% of an internal enterprise growth target for 2019, leaked memo shows

Sat, 01/18/2020 - 9:54am  |  Clusterstock

  • WeWork only hit 73% of a key growth target, according to internal data obtained by Business Insider. 
  • The company is betting on enterprise customers – companies with more than 500 employees – as a more stable and profitable customer base than small businesses.
  • WeWork added 108,000 enterprise desks last year, which was only 73% of its target. 
  • For more stories about WeWork, click here. 

WeWork is focused on inking deals with big companies, betting that working with Fortune 500 businesses like IBM and BlackRock will provide more stability and value than small startups and freelancers. 

But the embattled office company came in under target for adding desks with big businesses last year, according to data obtained by Business Insider. 

"While we fell short in Q4, you never gave up," one executive wrote to employees in communications reviewed by Business Insider.

Because the company has not released its fourth-quarter financials to bondholders – last year's numbers came in late March – it's not yet possible to get a full accounting of WeWork's bottom line. But the leaked numbers, along with third-party data, provide key indicators of the company's economic picture.

The following figures come from the North American enterprise team, which focuses on leases with companies with over 500 employees. They are unaudited.

  • 2019: 108,000 new desks for enterprise clients in North America, representing 73% of the target.
  • 2019: $1.9 billion in "committed revenue" – noncancelable contracts that will turn into revenue – which represented 113% of the goal.
  • Fourth quarter: 21,000 desks added, with more than $240 million in committed revenue. 

Committed revenue is an important metric that WeWork tracks in quarterly reports to bondholders. In its third-quarter presentation reviewed by Business Insider, the company had a total of $4.3 billion in committed revenue backlog in the third quarter. 

"WeWork signed fewer new leases in the fourth quarter of 2019 as we put in place our go-forward strategy that's focused on profitable growth," a spokeswoman for WeWork said in a statement. She declined to comment on the numbers leaked to Business Insider. 

WeWork added a total of 253,000 new desks through the third quarter of 2019, compared with 140,000 over the same time period in 2018, per investor documents reviewed by Business Insider. The company did not break out how many of those desks were for enterprise customers.

Overall, enterprise made up 43% of WeWork's third-quarter memberships – up from 34% a year ago. 

Overall, the company lost $1.3 billion in the third quarter, compared with $500 million in the third quarter of 2018, according to its third-quarter financials reviewed by Business Insider.

In the spring, Artie Minson, who is now one of WeWork's co-CEOs, told Business Insider that WeWork was "really just getting started" with enterprise clients.

"From an employer standpoint, WeWork is a better experience for their employees and meaningfully cheaper on a per-employee basis" than traditional office space, Minson, then WeWork's copresident and chief financial officer, said. "The CEOs like us and the CFOs like us."

WeWork, in turn, likes those clients back. Big businesses sign average commitments of 23 months, compared with 14 months for non-enterprise clients, per an October WeWork investor presentation

Money-losing deals with Sprint and Bank of America

Some of WeWork's enterprise deals were done at a loss last year, according to the person familiar with the deals, including Sprint and Bank of America. A representative for Sprint declined to comment, and a representative for Bank of America did not respond to a request for comment.

Bank of America was one of the nine banks working on WeWork's initial public offering, which was ultimately shelved. WeWork signed deals with a number of those banks for office renovations or memberships, including UBS and Citi. It's common for companies set to go public to do business with IPO advisers, including banks and law firms.  

Adam Neumann, who was ousted as CEO in September, often pushed for deals to be done regardless of the economics, said multiple people who worked closely with him. 

WeWork chairman Marcelo Claure, who SoftBank installed in September to right the company, was the CEO of SoftBank-owned Sprint until May 2018. SoftBank is WeWork's largest investor.

In November, Claure brought in Publicis, the ad agency holding company, to WeWork, and tapped Publicis chairman Maurice Levy as interim chief marketing officer. Publicis was the ad agency for Sprint during Claure's tenure. 

Leases show fourth-quarter slowdown

Another fourth-quarter metric indicates a future slowdown in WeWork's activity. Per real estate company CBRE, WeWork signed just four new US leases with landlords in the fourth quarter. Those leases represented a 93% drop from an average of 2.54 million square feet leased over the previous four quarters. Real estate data is notoriously opaque; data from another major real estate company, JLL, says that WeWork had no new leases in the fourth quarter. 

As WeWork inks fewer deals with landlords, the company will have less space to then sublease in the future. 

All flexible office companies surveyed by CBRE saw a slowdown in the fourth quarter, but WeWork had the most significant change.

Knotel leased 80% less space in the fourth quarter than its one-year average, per CBRE. On Friday, the company laid off 7% of its staff in a restructuring first reported by The Real Deal.  

"Knotel has grown from two employees in one city to 500+ people in 17 cities over the past four years to become the leading global flexible workspace platform, and our business will continue to evolve and change to best meet the needs of our customers," a Knotel representative said in a statement to Business Insider. 

CBRE called the industry slowdown "expected" after WeWork decided to slow its rapid expansion.

On Friday, Business Insider published 58 pages of correspondence between the SEC and WeWork about the coworking company's IPO filing and questions or concerns the agency had about the document. 

Have a WeWork tip? Contact this reporter via encrypted messaging app Signal at +1 (646) 768-1627 using a non-work phone, email at, or Twitter DM at @MeghanEMorris. (PR pitches by email only, please.) You can also contact Business Insider securely via SecureDrop.

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NOW WATCH: WeWork went from a $47 billion valuation to a failed IPO. Here's how the company makes money.

Tesla is on a tear, with no end in sight. That means the naysayers' case is in ruins. (TSLA)

Sat, 01/18/2020 - 9:26am  |  Clusterstock

  • Tesla's stock price has rallied 100% over the past three months and is now at an all-time high above $500 per share.
  • The company's market cap, at about $92 billion, is almost as much as Ford's and GM's combined.
  • The rally has been driven not by Tesla's familiar up-and-down story, nor by CEO Elon Musk's cult of personality, but by facts and fundamentals.
  • Tesla sold over 100,000 more vehicles in 2019 than in 2018 and has been posting profitable quarters.
  • The fundamentals aren't going to change; there are no looming plot twists, and consequently the naysayers' case now lies in ruins.
  • Click here for more BI Prime articles.

At the risk of invoking a cliché, I'll point out that Tesla isn't a company whose stock trades on fundamentals, but rather on a story.

Think about that. At a simple level, the fundamentals are facts, while the story is an illusion — a suspension of disbelief. When I was in my 20s, I spent a lot of time on story, before I dropped out of a doctorate program in literature at NYU. Stories have plots, subplots, plot twists, complicated characters who do complicated things. Stories can turn on a dime: in the space of a page, comedy becomes tragedy. As an author, you want to take readers on a ride.

For years now, story has dominated the debate around Tesla. And some large-scale characters, ranging from CEO Elon Musk to big-name hedge-funders like Jim Chanos and David Einhorn, have populated the tale. Even the minor characters have been interesting, and the plotlines and plot twists have been endless.

But the truth is that this story — something of an epic, really — filled a vacuum. Established automakers such as Ford and General Motors, have less lively stories because their actual businesses are so ... busy. The fundamentals — the business facts — produce millions of vehicles every year.

Tesla has only recently joined that club: 2019's total sales were about 367,000, a notable move up from 2018's roughly 250,000. But just a couple of years back, the company barely sold 50,000.

Story trumped fundamentals — but that's all changed in a hurry

The sprawling, obsessively detailed, constantly argued over Tesla story happened only because there wasn't enough production or sales to stop it. If Tesla had built a competent franchise dealer network in the US (or joined with an existing mega-dealer) rather than trying to sell vehicles direct to customers, and if Tesla had hired a seasoned contract manufacturer to build some vehicles and meet demands sooner, the story would have petered out in 2017 or 2018.

Didn't go that way, and thus we got an insane episode of Musk tweeting his way into an SEC investigation and eventual settlement, a pitched battle between the #TSLA fanboy and the #TSLAQ bankruptcy crowds, and a preoccupation with Tesla's inner-workings that resembled Cold War Kremlinology.

But look what's happened since Tesla's output of actual cars has picked up: the stock has been on a tear, blasting through $300 per share, $400 per share, and (remarkably) $500 per share in a matter of months. Tesla's market cap, at $90 billion, is nearly equal to GM's and Ford's combined.

This isn't a rally story. Tesla completely dominates the electric vehicle market and can now look forward to potential competitors having to spend, spend, and spend some more if they want to duke it out for market share. This is going to be painful because the traditional automakers won't have to break a sweat to build EVs, but they'll be forced to expend millions if not billions of dollars convincing consumers to buy them. 

Tesla, meanwhile, isn't spending anything, and hasn't. That doesn't constitute a first-move advantage so much as an only-mover leg up. Electric cars were stupid risky in the past, but Tesla gobbled up that risk. Now, the reward.

Busting through three resistance levels on the stock in three months is mind-blowing. And there isn't necessarily anything on the horizon to slow Tesla down. It reports fourth-quarter and full-year 2019 earnings in late January, and they're expected to be positive. If Tesla meets or beats, look out above. The 100% return of the past three months could look like a tame precursor, as Tesla's substantial short interest is decisively flushed out of the action.

Tesla has challenges, but the old story is over

Tesla has some looming challenges. The biggest is that as it sells more Model 3 vehicles — and soon, Model Y SUVs — at lower price points to less well-heeled buyers, it's going to be highly stressed on the service front. Like any relatively new automaker, Tesla's vehicles lack ironclad reliability, so the company compensates consumers with a great warranty. 

But without dealerships, Tesla doesn't have a solid built-in servicing model. Poor service means often means that owners who aren't living with fleets of vehicles at home fail to buy again from a manufacturer. Up to this juncture, Tesla has been selling to patient early adopters who probably own two or three cars; now that it's moving toward single-vehicle households, it could endure some pain.

That's merely the cost of doing business, however. With shares above $500, Tesla can now effortlessly make good on its convertible debt obligations and, should it want to, raise additional capital to bolster its balance sheet. I think that would be smart, and if Tesla goes for it in 2020, the approximately $5 billion that the company has in cash could swell to $10 billion, and Tesla could start to deleverage.

This leaves Tesla's naysayers, so previously dependent on a story, with not much to use to push the stock around. The facts are the facts, the fundamentals are the fundamentals, and if you think the market for EVs could grow in the US, Europe, and China, then Tesla stock looks cheap in a world were EVs now make up just 2% of global sales.

I'll use the analogy of a predicted snowstorm to depict the naysayers' plight. The weather report is uncertain: we could get a few inches, but we could also get a blizzard. The discussion is speculative: What would we do in the worst case, assuming that it probably won't happen? 

But then, the blizzard comes. And you have no choice but to surrender and dig yourself out.

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NOW WATCH: Why hydrogen cars will be Tesla's biggest threat

THE HEALTHCARE PAYMENTS REPORT: The strategies payments leaders are using to take advantage of the $3.7 trillion opportunity in US healthcare

Sat, 01/18/2020 - 9:02am  |  Clusterstock

The US healthcare payments market is enormous: Healthcare expenditure hit $3.65 trillion in 2018, per projections from CMS, and this spending is only expected to accelerate.

But the industry is at a tipping point. Better-informed and more critical customers, along with a push to combat the complex and opaque medical billing process, are creating demand for innovation in the healthcare payments space.

Despite a titanic market size and room for innovation, digital transformation is occurring incrementally at best. In fact, 90% of healthcare providers still leverage paper and manual processes for collections, according to data from a report commissioned by InstaMed and compiled by Qualtrics.

And even when healthcare providers offer digital solutions like online portals to customers (which 60% do), they seem to be falling short: While the majority of consumers claim they want to make appointments (68%), fill out registration forms (68%), and pay healthcare bills (61%) online, the share of consumers who actually do so hovers around 30% for those use cases. Discrepancies like these make healthcare payments a greenfield for lucrative digital innovation.

In The Healthcare Payments Report, Business Insider Intelligence looks at the healthcare payments process, including the types of healthcare payments, the stakeholders making them, where those payments are going, and what's driving change in the market. We then examine payments companies' innovations from the past year that address healthcare payments' most pressing challenges, analyze why they're lucrative, and discuss how other payments companies can learn from the innovations to furnish their own solutions.

The companies mentioned in this report are: InstaMed, JPMorgan, Liquid Payments, Patientco, Waystar

Here are some of the key takeaways from the report:

  • The US healthcare payments market is massive: Total US healthcare expenditure hit $3.65 trillion in 2018, per projections from The Office of the Actuary in the Centers for Medicare & Medicaid Services. For reference, consumers spent slightly less on retail purchases — $3.63 trillion — in 2018, per Internet Retailer.
  • But healthcare payments innovation has failed to keep up with consumer demands due to providers' reliance on legacy processes, and this may be hurting providers' bottom lines. 
  • Healthcare payments are complicated by the different stakeholders — providers, payers, and patients — that have a role in each transaction. These stakeholders' needs are shifting as the market changes: Consumers are taking a more active role in paying for their healthcare while states are pivoting toward a model that compensates providers based on the quality of their services rendered rather than the quantity.
  • Some payments firms are successfully adapting to the shifting market by creating digital solutions that balance the evolving needs of the entire healthcare payment value chain. 

In full, the report:

  • Outlines the structure of the current healthcare payments market.
  • Analyzes the forces and stakeholders driving change in the market.
  • Highlights companies that are implementing innovative solutions in the healthcare payments space, and offers key takeaways that other players can apply to their own approaches.

Interested in getting the full report? Here are three ways to access it:

  1. Purchase & download the full report from our research store. >> Purchase & Download Now
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Construction tech is looking to disrupt an industry that's notoriously slow to embrace change — insiders say these are the 10 contech startups to watch in 2020

Sat, 01/18/2020 - 8:18am  |  Clusterstock

  • Construction labor costs continue to increase and construction productivity has been flat for decades. These forces have created demand for cheaper construction, leading to the application of new tech like machine learning, robotics, 3D-imaging, and drones. 
  • While the sector hasn't seen nearly as much attention as fintech or its cousin, proptech, it has received $27 billion in funding since 2008, according to McKinsey partner Jose Luis Blanco. There are two contech unicorns —  Procore and Katerra. 
  • We've polled construction tech experts, VCs, and analysts to create a list of 10 of the hottest contech startups to watch in 2020.  
  • Read more BI Prime stories here.

With proptech funding booming and experts predicting that housing prices will continue to rise in the 2020s, a new slew of construction technology — or contech, for short — startups have emerged that are aiming to make building cheaper, easier, and safer. 

Construction labor costs continue to increase and construction productivity has been flat for decades. These forces have fueled demand for cheaper construction, leading to the application of new technologies like machine learning, robotics, 3D-imaging, and drones. 

While the sector hasn't received nearly as much attention as fintech or its cousin, proptech, it has received $27 billion in funding since 2008, according to McKinsey Partner Jose Luis Blanco. He noted that much of the funding has come from M&A, though that is beginning to change. 

"Since 2015 — a peak year for VC investments — construction tech space has been able to sustain a relatively high level of investment from VCs," Blanco wrote Business Insider. 

This VC backing has minted two unicorns in the space.

Katerra, a SoftBank-backed modular construction company, has raised $1.2 billion and reports value it as high as $4 billion. But the tail-end of 2019 was bumpy for the company. Katerra's cofounder, Fritz Wolff, left as the company pulled out of six projects, closed a factory, and laid off more than 100 people, according to a report from The Information.

Procore, a construction management software startup, has raised $304 million. Crunchbase reported that the company is considering an IPO that might value it at more than $4 billion.

While Procore and Katerra get the most attention, they're far from the only players in the field. We've polled a list of construction tech experts, VCs, and analysts to create a list of ten of the hottest construction tech startups (in no particular order). 

Rabbet is a construction finance platform that brings paper forms online.

Rabbet, founded in 2017, is a software startup that aims to bring the highly manual process of construction finance online. The company has raised $8.1 million in total funding from backers as diverse as Goldman Sachs, proptech fund Camber Creek, incubator Y Combinator, and financial services fund QED Investors. 

Rabbet's software uses machine learning to analyze documents, allowing information to be digitally shared and used across banks, developers, and contractors. Goldman Sachs' own construction group uses the software, according to Rabbet's CEO

Built Robotics is a manufacturer of tools that make construction vehicles autonomous.

Built Robotics, founded in 2016, manufactures equipment that turns normal construction vehicles into autonomous vehicles. It has raised a total of $48 million.

The company's most recent funding round was led by Next47, Siemen's venture capital arm, and included funds from proptech fund Fifth Wall, NEA, and Founders Fund

Built Robotics sells and installs conversion tools to construction companies, and then charges the company a fee every time the autonomous mode is used. The equipment uses lidar, sensors, and cameras to make sure the machine is aware of its environment. 

Avvir creates a digital twin of construction in real-time.

Avvir, a company that's created building information modeling software, was founded in 2017. The software uses laser scans and machine learning to notice mistakes in construction, automatically update a digital model of the building with any changes, and to monitor progress.

Avvir is in pilot with Facebook, ExxonMobil, Goldman Sachs and the New York City Economic Development Corporation. 

The startup has raised $2.5 million in seed funding in a round led by Khosla Ventures that included proptech VC MetaProp.

Rhumbix brings paperwork to a mobile platform, connecting construction workers directly with other stakeholders.

Rhumbix, founded in 2014, is a mobile platform that connects construction workers directly with administrators and project stakeholders. The app brings paper workflows to a worker's mobile device, allowing for real-time communication and data collection about material usage and labor productivity. 

Rhumbix has raised $34.9 million in funding to date. Its most recent round, a $14.3 million round this July, was led by Blackhorn Ventures, a VC that invests in industrial companies, and Tenfore holdings. The company has also received funding from Greylock Partners and contech venture fund Brick & Mortar Ventures


Openspace uses hard hat-mounted cameras to create a real-time 360 degree map of a worksite.

Openspace, founded in 2017, uses helmet-mounted cameras and software to stitch together 3D renderings of work sites for contractors and developers alike. The company has raised $17.5 million in funding. 

Its most recent round, a $14 million Series A round, was led by Lux Capital, and included funding from Tishman Speyer, JLL's venture arm, Suffolk Construction, proptech fund Navitas Capital, and WeWork.

WeWork, JLL, Tishman Speyer, and Suffolk Construction were all customers before the funding.


Plant Prefab makes prefabricated buildings with an emphasis on sustainability.

Plant Prefab, founded in 2015, builds sustainable prefabricated homes. The company closed a $6.7 million round led by Amazon's Alexa Fund earlier this year. It had previously raised a $3 million seed round that included funding from ex-Twitter CEO Ev William's Obvious Ventures, which is also one of the largest stakeholders in Beyond Meat. 

The company recently launched a line of scalable small homes to provide housing quickly after last year's Woolsey Fire in Southern California. The combination of sustainable building and a collection of homes created for disaster response are extra-timely as 14.6 million acres of Australia has burned in the ongoing bushfires

Factory OS is one of the largest modular housing manufacturers, with two warehouses in the Bay Area.

Factory OS, founded in 2017, is a modular residential construction company that builds multi-family homes in their two factories in the San Francisco Bay Area.

Founded by Bay Area developer Rick Holliday, the company announced an undisclosed fundraise earlier this year from AutoCAD creator Autodesk and Citigroup's Spread Products Investment Technologies initiative and its affordable housing branch, Citi Community Capital. 

Factory OS builds multifamily buildings in its factory using an assembly line. Similar to Plant Prefab, the company is planning to build a Rapid Response Factory that will respond to natural disasters.

Google placed Factory OS's first order in 2017 for 300 homes for their employees. 

Branch Technology has created the world's largest freeform 3D printer and is using it to build homes.

Branch Technology, founded in 2014, is a 3D printing company that is developing technology to create fully 3D printed structures.

So far, it has created the world's largest freeform 3D printer and the world's largest 3D printed structure. Instead of typical 3D printing, which is created by printing layers and layers of material, Branch's printer creates a lattice-like structure that is then filled with an expandable foam. 

The company is in the process of building Curve Appeal, which it claims will be the first freeform 3D printed home. Branch has raised $7.2 million since its founding. The most recent round was led by MetaProp

Spacemaker has created design and construction simulation software that studies how different designs fit into the environment.

Spacemaker was founded in 2016 in Norway. The company's flagship product is an AI simulation tool that creates and analyzes thousands of potential developments on one site. The software analyzes the surrounding landscape, local regulations, and demographic data to simulate how different potential designs would impact the environment and the future occupants of the space. 

Spacemaker raised $25 million this year in a Series A round led by European investor Atomico and included funds from British proptech fund Round Hill Ventures and Nordic property developer OBOS.

Mighty Buildings is a stealth-mode startup that has attracted big dollars to lower construction costs with 3D printing.

There isn't much information about Might Buildings, but the experts we spoke with confirmed that there is a lot of hype.

The company's website only contains a form to enter its Beta Program, though Khosla Venture's website contains the following description: Mighty Buildings is a YC (W'18) stealth-mode startup, working on a disruption of the construction industry with 3D printing tech and composite materials.

The company's SEC-D forms show that the company has raised roughly $33 million so far, with Crunchbase recording a variety of investors, including Khosla Ventures and Y Combinator.

'Tariffs will absolutely bankrupt our business': US companies warn against Trump's plans to tax wine and cheese imports

Sat, 01/18/2020 - 8:17am  |  Clusterstock

  • The US has threatened to levy tariffs of up to 100% on $2.4 billion worth of products from France. 
  • In testimony before US trade officials this month, US businesses warned that the tariffs would raise prices for consumers and lead to job losses. 
  • "The proposed tariffs would force the price of these wines to the point where they would be unsellable," one company told the US trade office.
  • Visit Business Insider's homepage here.

The US has threatened to levy tariffs of up to 100% on $2.4 billion worth of products from France, a move meant to retaliate against a tax on digital services the European nation passed this summer. 

France is just the latest country to crack down on the charge that large technology companies avoid taxes through subsidiaries in other countries. The Trump administration criticized the policy, saying it disproportionately affected American technology companies like Facebook and Google and is inconsistent with international tax policy. 

But the retaliatory tariffs Trump proposed — on wine, cheese, handbags and other products —  have drawn widespread backlash from domestic companies. In testimony before US trade officials this month, they warned the tariffs would raise prices for consumers and lead to job losses. 

Find the full testimony transcript here.

SEE ALSO: A cyberattack on a major US financial institution would affect more than a third of bank assets, New York Fed warns

Besides the nearly 300 employees in South Carolina and the other employees across the U.S., please consider the following potential impacts from a tariff of 100 percent on Le Creuset products. And admit an immediate freeze on hiring for all open positions, severe economic hardship on approximately 115 local business partners, postponing or canceling of the $3.2 million expenditure of local capital improvement projects. -Le Creuset

It would actually disproportionately harm Americans, consumers, workers, retailers and restaurants. American workers will suffer greater harm than French workers. -Staub

I can say without doubt that were this tariff to be enacted and include sparkling wines, my business would suffer greatly. At best, it would be the loss of a significant amount of revenue, and at worst likely leading to drastic losses in sales, profitability, and potentially leading to layoffs. -Cutting Edge Selections

We are a small business that supports other small businesses. And because of this, we have a unique outlook as to how far-reaching the ripple effect of these potentially catastrophic and blatantly protectionist tariffs could be to hundreds of thousands of Americans. -Selection Massale

As a small business owner, a business that I have been involved in building now for 15 years, I can assure the committee that the results of any increased tariff burden -- and, indeed, the 25 percent tariffs that have already been levied on most of our products -- run the risk of putting us out of business. -Vintage '59 Imports

I wish I could compile and cite the specific numbers of jobs, the businesses, and the local tax coffers that will be damaged by the increased tariffs. Unfortunately, I didn't have time because I have a small business to run. Hopefully, I will have the opportunity to continue running it. -CopakeWineWorks

If these tariffs come to past, the only possible end result I can see from my company is to shrink and lay people off. That's the best case scenario. The worst case scenario is that I can't maintain the debt load I have from still paying back my former business partner and mortgage and I have to shut down. -Devenish Wines

With regards to the proposed 100 percent tariffs I will say with all seriousness and without exaggeration that I do not know how we would be able to survive. Without a doubt we would have to lay people off, which would be very hard considering we have a team of about 20 employees, whom we all appreciate and care about. -Chambers Street Wines

Any tariff action taken here would either significantly increase consumer cost or more likely price the product out of the market, leaving the consumer with less choice in the marketplace. -Bel BrandsUSA

The overall health of our company, as we operate our two production plants in the United States, providing U.S. jobs in rural areas, is dependent on these imports. Imposing tariffs cause serious economic harm to us, reduces US jobs and the overall viability of our U.S. operations. -Materne North America

"We are the largest online retailer of wine, and the effects that this tax would have on our company are beyond measure. Our colleagues, who are smaller businesses who you are going to hear from, would feel the effects on a much greater scale. As you have heard and will continue to hear, they will no longer be operational.

Among the three major markets these tariffs would affect it is the U.S., not Europe, that would see the most damage, and China who would see the benefits. It is, without hyperbole, that I tell you that the proposed tariffs would be the greatest threat to the wine industry since Prohibition in 1919. -Tribeca Wine Merchants


The implementation of a 100 percent tariff on French sparkling wines will result in at least a 150 percent increase in the shelf and wine list prices, factoring in the margins of each participant in the government-mandated 3-tier system. These increases would decrease consumption, eliminate demand, and generate no incremental funds. -BNP Distribution Company

The proposed tariffs would force the price of these wines to the point where they would be unsellable. And that's not even to mention the completely untenable cash flow issues that we have of having to pay these tariffs upon arrival at the port. If you could imagine having to pay double for a container when the wine arrives rather than having the typically 90 days to pay a bill. -Bowler Wine

We are pretty sure that if the French cheese tariff increased then the consequence will be just that micromarket will vanish in the air and disappear forever. And there is no way that American production would replace it. -INTERVALExport


Our plan for 2020 was to continue to develop our New York and California distribution by hiring two full -- two more full-time employees. Instead, the proposed tariffs, which range from 25 percent to 100 percent tariffs in French wine, will absolutely bankrupt our business and further hurt our U.S. customers' ability to purchase and sell wine. -Avant Garde

Revenue and jobs would also be negatively affected at the over 40 American companies with whom we spend $5 million per year on products and services to support our business. I've already laid off one position due to the extreme uncertainty around the DST and Airbus disputes. -Laurent-Perrier US

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