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Microsoft saw $62 billion of market value erased after it said coronavirus will hit profits this year. Here are 6 other companies that have issued similar warnings — and how much they've lost (MSFT)

Thu, 02/27/2020 - 3:55pm  |  Clusterstock

  • Several companies have lowered or withdrawn their forward-looking revenue estimates as the coronavirus tears into operations.
  • Microsoft was the most recent to warn investors of the outbreak's effect on financials, announcing Wednesday its Windows and Surface businesses would see worse-than-expected sales due to supply chain disruption.
  • The announcement drove Microsoft stock down as much as 4.8% in Thursday trading, wiping out as much as $62 billion in market value.
  • Here are six industry leaders that recently cut guidance due to the coronavirus epidemic, and how much of their market cap was erased the following trading session.
  • Visit the Business Insider homepage for more stories.

More companies are updating their forward guidance to reflect coronavirus fallout, and investors aren't enjoying the results.

Microsoft announced on Wednesday its sales in the first quarter of 2020 would be lower than initially expected due to virus-related supply chain issues. The tech giant joined several other US firms quantifying the hit to their regular operations, including Apple, Mastercard, and Royal Caribbean Cruises.

The slashed projections are among the many results of coronavirus' effect on global markets. The Dow Jones Industrial Average and the S&P 500 entered correction territory on Thursday as US stocks sank for the sixth straight trading session. The 10-year Treasury yield has notched numerous record lows as investors piled into defensive assets. Gold, a traditional hedge against tumbling stocks, hit its highest level since 2013 on Monday.

Several economists are now warning investors of a prolonged hit to equity prices as the outbreak spreads further around the world. The S&P 500 could slip to its lowest level since June on virus fears, Goldman Sachs said in a Thursday note, adding that US firms will fail to grow profits in 2020. Former Federal Reserve chief Janet Yellen alerted on Wednesday that the US could fall into a recession if the coronavirus epidemic escalates.

Companies' updated forecasts serve as the most material sign yet of a direct hit to future stock performance. Here are six US firms that have cut their guidance on coronavirus fallout, and how much market cap was erased the following trading day.

Microsoft

Market cap erased on day of update: $54.7 billion as of 2:30 p.m. ET, as much as $62 billion intraday

Microsoft warned on Wednesday afternoon it would miss its initial revenue projection for the fiscal third quarter due to coronavirus' impact on its Windows and Surface businesses. The segment relies heavily on production operations in China, and the tech giant may now move manufacturing of its Surface devices outside the country, Nikkei Asian Review reported.



Apple

Market cap erased on trading day after update: $26 billion

Apple nullified its previous guidance for the March quarter on February 17, citing "temporarily constrained" iPhone supply and weak demand in China. The company previously closed all of its retail locations in China to curb further spreading of the virus. Apple deemed its now-rescinded guidance "wider-than-usual" in its last earnings report due to uncertainties surrounding the outbreak.



Mastercard

Market cap erased on trading day after update: $21.9 billion

Mastercard announced on Monday it would lower its first-quarter and full-year revenue forecasts, citing the virus' impacts on travel and e-commerce growth. The credit card company expects quarterly revenue growth to slow by 2% to 3% if the outbreak continues to grow at its current pace. Yearly revenue growth would stand "at the low end of the low-teens range" if the virus' impact is limited to the first quarter, Mastercard added. 

"There are many unknowns as to the duration and severity of the situation and we are closely monitoring it," the company said, adding it would update investors again in its first-quarter earnings call.



Coca-Cola

Market cap erased on trading day after update: $6 billion

Coca-Cola reaffirmed its full-year guidance on Friday but warned of an earnings per share hit of 1 cent to 2 cents in the first quarter. The beverage giant said the outbreak disturbed its supply chain, including the shipment of artificial sweeteners from China. Its diet and zero-sugar products were hit with an export delay, Coca-Cola said Monday in a regulatory filing.

The company expects to give more detail on the virus' effect on business in its April earnings report.



Royal Caribbean Cruises

Market cap erased on trading day after update: $1.5 billion

Royal Caribbean Cruises has issued a number of guidance updates through February as it cut more trips in Southeast Asia. The latest adjustment came Tuesday when it brought the total to 30 canceled trips. The company also issued several itinerary modifications for its business in the region.

Royal Caribbean expects the virus' impact to erase 90 cents from 2020 earnings per share, adding that the cancellation of all trips to Asia through April would add another 30-cent hit to the profitability metric.



United Airlines

Market cap erased on trading day after update: $1.2 billion

United Airlines was the first US airline to withdraw its annual revenue guidance, attributing the decision to heightened uncertainty around weakened travel activity. The company was experiencing "an approximately 100% decline in near-term demand to China" and a 75% drop in demand to its other trans-Pacific routes, according to a Monday regulatory filing.

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There are 2 types of purpose, according to a Harvard professor — but only one of them boosts company productivity. Here's the question every manager should be asking to focus on the right kind of purpose.

Thu, 02/27/2020 - 3:29pm  |  Clusterstock

  • Harvard professor Rebecca Henderson said years of research showed why the top 10% of most productive corporations are so much more productive than the rest: They are driven by purpose.
  • There are two types of purpose, she said: the one that is used to boost camaraderie and the one that is used for mission alignment. The latter leads to high performance.
  • The Better Capitalism series tracks the ways companies and people are rethinking the economy and role of business in society.
  • Visit Business Insider's homepage for more stories.

Rebecca Henderson has been a business-school professor for 20 years, first at MIT and then Harvard.

For much of those two decades, a persistent finding puzzled her and her colleagues: The productivity of the top 10% of most productive firms was growing significantly faster than that of every other firm. Economics textbooks define "productivity" as output per unit of input, or how much revenue each worker at a company contributes to its bottom line. And Henderson's findings on productivity across nearly 20 years were consistent across all industries and all Organization for Economic Cooperation and Development countries.

Before the financial crisis, the top 10% simply led the pack in productivity rate. After the crisis, the productivity of the top 10% kept sharply rising and started to drop for the others. Today, the productivity of the top 10% of most productive firms is about twice as large as the bottom 10%.

Ultimately, Henderson came to a surprisingly simple explanation: The most productive companies recognized that companies driven by purpose invested the most in long-term value and in turn created the most value overall, therefore becoming more productive.

But there are two kinds of purpose, Henderson added, and you don't want to choose the wrong one.

Purpose-driven productivity is not a measurement error, and not all purpose is equal

"I spent 20 years in windowless conference room trying to make this finding go away," Henderson told an audience of CEOs and investors gathered for the Chief Executives for Corporate Purpose's annual Strategic Investor Initiative. "Nobody believed it. It must be a measurement error."

But the studies kept consistently coming to the same conclusion. And now, ahead of the release of her book "Reimagining Capitalism in a World on Fire," she has found that companies driven by a certain kind of purpose are more productive, regardless of industry or country.

"What's going on is that there are some firms that are able to run genuine continuous improvement, that genuinely treat their employees with dignity and respect, that can run teams that work together well, that promote on the basis of performance — not just on the basis of quantitative metrics but genuinely on the basis of performance."

Henderson made an important distinction between two primary types of purpose. Organizations that used their purpose primarily to build camaraderie, creating a familial atmosphere, saw no positive or negative impact on their bottom line; those that used their purpose primarily for mission alignment, answering the "why" of everyone's work, outperformed their peers. Henderson cited research on corporate purpose by Claudine Gartenberg, Andrea Prat, and George Serafeim.

While Henderson said she would not disparage purpose's effect on camaraderie, she added, "If you really want outperformance, the data strongly suggests you need it linked to the strategy."

Natural and social capital are not 'free'

Henderson told the audience she believed capitalism was at a turning point, where a mentality of profits above all else for more than four decades has been proven unsustainable. Corporations previously assumed that natural and social capital, like the environment and workers' livelihoods, were "free" and could largely be ignored. But in the past several years, even the most jaded executives have realized that their actions affect a climate crisis and a wave of inequality-fueled populism. They are realizing that natural and social capital are now "expensive."

Henderson is part of the increasingly loud group that says if corporations do not abandon the profits-at-all-costs mentality and recognize this transition from free to expensive, countries will experience significant economic and social destabilization.

"Really transforming organizations is really, really hard. We have to do it at scale in the next 20 years and really transform the society," she said. "A purpose," as long as it's implemented correctly, "can help."

SEE ALSO: Ray Dalio says that everybody is missing the key metric for saving America's economy from inequality — productivity

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5 Years A Venture Capitalist…..by Ola Brown (Orekunrin) founder of @FlyingDoctorsNG

Thu, 02/27/2020 - 5:52am  |  Timbuktu Chronicles
Ola Brown (Orekunrin) writes:
A fundamental reason why the Greentree company is able to make successful investments is the common goal we share as members of the board. Our vision is to power the growth of entrepreneurs across Africa...[more]

Trump says coronavirus could affect economic growth in the US

Wed, 02/26/2020 - 9:30pm  |  Clusterstock

  • President Donald Trump said Wednesday evening that disruptions from the coronavirus could affect the US gross domestic product.
  • The comments were a departure from a string of rosier economic forecasts that have come from the White House in recent days.
  • "This would have an impact on GDP," Trump said of COVID-19 at a news conference, making a rare appearance in the White House briefing room. "But we're still, we're doing great."
  • Visit Business Insider's homepage for more stories.

President Donald Trump said Wednesday evening that disruptions from the coronavirus could affect the US gross domestic product, a departure from a string of rosier economic forecasts that have come from the White House in recent days.

"This would have an impact on GDP," Trump said of COVID-19 at a news conference, making a rare appearance in the White House briefing room. "But we're still, we're doing great."

Trump added that it was too soon to predict the extent of the economic effects and that focus should instead be on efforts to contain the respiratory illness, which the Centers for Disease Control has warned would likely spread through communities in the US.  

"That's irrelevant compared to what we're talking about," Trump said. "We want to make sure it's safe. Safety number one." 

The Trump administration sought to downplay the risks of COVID-19 this week as concerns prompted emergency government responses and rattled financial markets. US stocks have suffered sharp losses in recent days, with investors assessing the effects of the outbreak on supply chains and other business operations. 

At the news conference, Trump said that the sell-offs were at least partly driven by COVID-19 but also pointed to potential concerns about the presidential election. He sought to shift blame for any broader economic weakness to issues at Boeing, a strike at General Motors earlier this year, and the Federal Reserve. 

Trump has failed to deliver the 3% annual GDP growth he promised as a candidate in 2016. Even before the COVID-19 outbreak, the Congressional Budget Office and other independent economists forecast growth would slow to around 2% in 2020.

SEE ALSO: White House officials express hopes that coronavirus will advance 'America First' agenda

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NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption

This luxury hotel group, backed by a 'brain trust' of investors including ex-Uber CEO Travis Kalanick, is using 3D-printing to build hotels in months rather than years

Wed, 02/26/2020 - 8:41pm  |  Clusterstock

  • Habitas is a luxury hotel group that uses 3D-printed technology to speed up the rate of construction of its hotels.
  • The Tulum-based hotel startup leapfrogs the process of hiring a contractor, digging a foundation, and pouring in concrete. Instead, it assembles hotel rooms from flat-packed structures pre-assembled from 3D-printed materials. 
  • The startup is betting that the development model - a relatively new innovation in construction tech - will give it a competitive edge in the hospitality industry, as it begins a global expansion to countries like Namibia and Bhutan. 
  • Investors like Uber's former CEO Travis Kalanick and Tinder's cofounder Justin Mateen appear to be making the same bet. The company raised $20 million in its first round of external funding in December. 
  • Visit Business Insider's homepage for more stories.

Building hotels using 3D-printing was originally just a means to an end at Habitas, according to Oliver Ripley, the co-founder and CEO of the luxury hotel startup. 

The British entrepreneur met his two other co-founders at a Burning Man festival, and was attracted to their original vision of planning events and retreats to "foster deeper human connections," as he put it. Habitas, which opened its first hotel in 2017 according to Condé Nast, pitched itself as a luxury hotel less focused on amenities, and more focused on building a community spirit more commonly found in youth hostels. 

That mission is still embedded within the luxury hotel currently based in Tulum, Mexico. Ripley stresses that the hotel doesn't offer the "chocolates-on-a-pillow" type of hospitality but the one where "we welcome you into our homes."

But perhaps a more unique element of the hotel is its construction model. Instead of hiring a developer and working with a team of contractors to build their vision, Habitas manufactures and builds its hotels in-house. 

That's where 3D-printing comes in. The luxury resort prints out the materials for a hotel room, flat-packs its basic structures, and assembles it in its final location, like Lego pieces. This process enables the company to cut the time it takes to construct a new hotel, down from five years to less than one. 

"Hospitality brands are generally management companies that don't take a development risk or look at how to disrupt the business. They're not really incentivized to take these risks," Ripley told Business Insider. "What we've managed to do is to basically go from a traditional development cycle of building a hotel in four to five years, and narrow it down to six to nine months." 

The company is currently preparing for a global expansion, and used its website to announce two upcoming hotels around Mexico, one in Namibia, and one in Bhutan. Ripley notes that this shorter development window will be crucial in ensuring that the company will scale its operations effectively. 

"We've basically shortened the build time, and reduced cost for keep. Obviously our internal capital has gone down," Ripley said. 

Fitting the Habitas brand 

3D-printing is one of the newer innovations in construction, an industry that has only recently started drawing attention from venture capital firms.

As construction labor costs continue to increase, demand for cheaper construction has spurred companies like Katerra and Procore to innovate ways to increase productivity and cut down costs.

Although this technology is perhaps adopted more sparingly in the hospitality, Ripley says that building Habitas hotels in-house makes especial sense for the hotel startup's brand, which emphasizes sustainability. 

Ripley also pointed out the heavy toll that traditional construction takes on the environment, and notes that 3D printing eliminates that impact, making Habitas hotels more nature-friendly. 

"We're able to build in a way where we're not pouring concrete into a foundation," Ripley said, noting that some of the Habitas could well be temporary in nature, thanks to the ease at which is can be assembled and disassembled. "I think that's very important if you're really striving to be fully sustainable."

A "brain trust" of investors that include ex-Uber CEO Travis Kalanick.

Habitas's pitch to disrupt the hospitality industry has allowed it to raise $20 million in funding this December from a group of tech investors including ex-Uber CEO Travis Kalanick (through 10100, his personal investment fund), Tinder co-founder Justin Mateen, and British online supermarket Ocado's CEO Tim Steiner. 

This was the first time that the company had raised money from external sources, Ripley noted. But he stressed that the round was strategic in nature, as he was looking for investors to help advise the company as it began expanding from its current base in Tulum, Mexico. 

"The reason for this round was actually less to do with raising capital, but more to do with bringing together a brain trust," Ripley told Business Insider. "So the idea was very much about looking at our business and saying, if our business is in the cross section of hospitality at technology, risk, and venture, who are the smartest minds and the smartest people that we could meet, that share our values and share our vision."

SEE ALSO: This Indian startup just raised $20 million to create new opportunities for human workers to do the tedious but important work that makes AI possible

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Cannabis retailer MedMen just posted downbeat earnings, and the new CEO said selling factories and shuttering stores might help turn things around

Wed, 02/26/2020 - 7:05pm  |  Clusterstock

  • California cannabis company MedMen posted downbeat financials for the final three months of 2019 on Wednesday afternoon. Revenue was $44.1 million, falling short of every analyst estimate collected by Bloomberg.
  • The company's financial losses also increased.
  • The company has faced a tough year, like many others in the cannabis industry. MedMen's CEO stepped down on February 1, and MedMen laid off about 40% of its corporate workforce in November and December.
  • Click here for more BI Prime stories.

California-based cannabis company MedMen released its earnings report Wednesday afternoon, showing disappointing results as a new top exec takes the helm.

MedMen reported revenue of $44.1 million in the last three months of 2019, missing the lowest analyst estimate by almost $4 million, according to Bloomberg. The company lost $35.1 million as measured by Ebitda.

MedMen's new interim CEO Ryan Lissack emphasized the pivot the company is taking as he acknowledged the challenges it faces. Lissack said the company would continue to cut costs and focus on what they do best: retail. 

"MedMen's last chapter was about pursuing growth," Lissack said. " This is a pivotal time for the company, where we can reassess the business."

MedMen is closing its Arizona operation and may shutter more stores

MedMen is discontinuing its Arizona operations — which includes three retail locations as well as cultivation and manufacturing operations. Company leaders also said they were evaluating whether to temporarily or permanently close other stores they think are not profitable. They are also in "active discussions with a number of parties" to spin off factories in different states, according to CFO Zeeshan Hyder.

Hyder also said that the company "cannot continue to invest in assets that do not hold short term returns" even if they offer long term benefits.

The company said it had cash and cash equivalents at the end of its second fiscal quarter of 2020 valued at $26 million, down from $33.8 million as of mid-2019.

Lissack became interim CEO on February 1 when his predecessor Adam Bierman stepped down and faces the challenge of improving its financial performance.

"I look forward to transitioning the company into its next chapter, which will be defined by financial discipline and strategic growth to drive long-term value creation for the Company and its stakeholders," he said in a statement.

The cannabis industry has faced headwind after headwind in the past couple of months. Multi-state operators have turned away from plans to increase their geographic footprints and instead focused on their current customer bases as capital has withered and stocks have plummeted. 

A tumbling stock and a canceled deal

MedMen's stock has tumbled down from $3.25 to about $0.30. The company's monumental $682 million merger with PharmaCann fell apart in October.

"The initial wave of investors that went after this market has been tapped out or exhausted," Marc Hauser, the vice chair of the law firm Reed Smith's cannabis team told Business Insider's Jeremy Berke after the merger's collapse was announced. "Companies are having a much harder time raising capital than just 12 months ago."

MedMen also cut around 40% of its workforce late last year, including 80 corporate-level employees, in an attempt to save cash as investments in the industry have slowed down. MedMen has also seen an ongoing shakeup at the executive level in the past year. Departures include: David Dancer, the company's chief marketing officer, Chief Operating Officer Ben Cook, General Counsel Lisa Sergi Trager, and Daniel Yi, the senior vice president of corporate communications.

Former CEO Bierman was the most recent to depart. Before his exit, Bierman told Business Insider that investors were right to punish MedMen's stock, but that he was working on a turnaround along with the help from FTI Consulting, a business advisory firm, to try and get its finances back on track. 

"The investor community and the Street — they don't really get anything wrong," Bierman told Business Insider in January. "If our stock is trading at a tremendous discount to our peer set, there's a reason for it."

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Lowe's says its website has been a huge drag on the company, but it's hopeful that an overhaul will boost its sales

Wed, 02/26/2020 - 6:35pm  |  Clusterstock

  • Lowe's CEO Marvin Ellison spoke about the company's omnichannel strategy during the company's Wednesday earnings call.
  • In response to a question about brick-and-mortar sales, Ellison said that the company is hoping that an e-commerce overhaul will boost the performance of its physical stores.
  • "We think it's part and parcel that Lowes.com has to improve," Ellison said. 
  • Visit Business Insider's homepage for more stories.

Lowe's is hoping to boost its brick-and-mortar sales by upping its e-commerce game, CEO Marvin Ellison said during an earnings call with analysts Wednesday.

Ellison shared his thoughts on the retailer's omnichannel approach in response to a question from Cleveland Research Company CEO Eric Bosshard, who asked the leadership team what had been limiting core brick-and-mortar sales. Bosshard also asked what steps Lowe's planned to take to bolster its physical stores in 2020.

In its fourth-quarter earnings, Lowe's posted a comparable sales increase of 2.5%, down from the 3.2% growth the retailer saw a year ago.

"Our sales growth was driven almost entirely by our U.S. brick and mortar stores, supported by our investments in technology, store environment and the Pro business," Ellison said in a statement posted on the company's website.

In the call, Ellison elaborated that the home-improvement retailer anticipated that an e-commerce overhaul would prompt a spike in Lowe's in-store sales.

"A lot of home improvement transactions begin online," Ellison said in response to Bosshard's question. "They may not consummate online, but they begin online. It is a true omnichannel environment, where research and also product education happens online and then it drives traffic to the store."

Ellison went on to say that limitations to Lowe's digital operations may be softening physical store sales.

"Not only does it hurt your dot com sales, it actually hurts your brick and mortar sales because it limits the amount of traffic where people will show up after having quality, efficient research and decide to buy," he said.

And e-commerce is one area where Lowe's has historically fizzled, according to its own leadership team.

Back in November 2019, Ellison said the company was lagging when it came to its digital capabilities. At the time, the CEO said that it was "difficult" to increase dotcom sales "correctly" and in a financially responsible manner. 

"I would argue that there's not a brick-and-mortar retailer in the US that is our size that has such limited growth in the dotcom business," Ellison said during the November call. "Most US retailers that announce their comp growth for the quarter typically will have a dotcom number that starts with 20% growth, which is typical in this day and age. We're not there yet but we know how to get there."

Lowe's is now in the process of switching from a 10-year-old system to Google Cloud. In a statement, Ellison said that the retailer has a "detailed road map in place to modernize our e-commerce platform and accelerate Lowes.com sales."

"We think it's part and parcel that Lowes.com has to improve, and when that improves it lifts the entire company from an e-commerce standpoint, from an omni-channel standpoint, and from a brick-and-mortar perspective," Ellison said. 

SEE ALSO: Home Depot and Lowe's are gearing up to hire 133,000 employees for the springtime rush

DON'T MISS: Lowe's CEO says e-commerce has largely been a 'mystery' for the company, and it reveals a stark reality for the home-improvement chain

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From Salesforce to Disney, it's hard for some CEOs to say goodbye

Wed, 02/26/2020 - 6:25pm  |  Clusterstock

Welcome to this week's edition of Trending, the newsletter where we highlight BI Prime's biggest tech stories. I'm Alexei Oreskovic, Business Insider's West Coast bureau chief and global tech editor.

If this is your first time here, this is how you can get Trending in your inbox every week.

This week: From the tower of Salesforce to the kingdom of magic, change is in the air

Did someone make Tuesday the official day of CEO goodbyes?

Within the span of minutes after the markets closed on Tuesday, Walt Disney CEO Bob Iger and Salesforce co-CEO Keith Block each announced they were stepping down. (If you need a third to make it a trend, Jason Droege, the head of Uber Eats, delivered his adieu by tweet on Tuesday too).

Iger has teased his exit from the top job at Disney for years. The surprise was that he finally went through with it. Block, on the other hand, was only 18 months into a co-CEO job alongside Salesforce founder Marc Benioff — a gig that was by all indications supposed to end with Block taking over the candy shop eventually.

The timing of these CEO departures is, of course, coincidental. But they say something about the unpredictable nature and dynamics of CEO successions. When you're the boss, it's hard to say goodbye. And that's even more so in the world of tech, where founder-CEOs have more clout (with or without dual-class stock structures) than in other businesses.

Whatever the assumptions were about Block being the heir to the Benioff throne, the reality, as Paayal Zaveri reports, is that Benioff and co-founder Parker Harris are still extremely engaged in how the company is run. 

Benioff may have other interests in philanthropy and public policy, but he's still firing on all cylinders at Salesforce.

If it sounds familiar, that's because we've seen this movie before. Larry Ellison is putatively the Chairman and Chief Technology Officer at Oracle, with Safra Catz as CEO (and until recently Mark Hurd, who died in October, serving alongside Catz as co-CEO). 

These CEO jobs are not just titular. Catz, and Block, truly run major transnational corporations. But the ultimate power at the company lies elsewhere.

At one point, Dell had an "Office of the CEO" comprised of Kevin Rollins as chief executive and Michael Dell as Chairman. Michael Dell was said to be preparing for a second act in something new; perhaps politics, people speculated. The second act turned out to be Dell taking over as CEO again, and transforming the PC maker into an enterprise services business. 

Paayal points to a new crop of rising stars at Salesforce, including ex-Facebook CTO Bret Taylor and Adam Selipsky, the chief of recent Salesforce acquisition Tableau. Some analysts reckon these execs are more suitable heirs to Benioff's freewheeling company and corporate culture than the buttoned-down Block.

But I've got a feeling that no matter who has the CEO title, Salesforce will remain a Marc Benioff production for a long time to come.

Read the full story here: The sudden departure of Salesforce co-CEO Keith Block could show how Marc Benioff is preparing a new generation of talent to take the reins at the cloud giant

A shopping list for Satya

Speaking of CEO successions, the reign of Satya Nadella has become one of the most remarkable turnaround stories in modern tech history. Microsoft may not have been in imminent danger of collapse, but it was stuck in a funk that even Bill Gates, who served as Chairman during the troubled years prior to Nadella becoming CEO, could not find a way out of.

Nadella's transformation of Microsoft is a story that's still being written. Microsoft has evolved from a PC software company to an enterprise cloud computing giant. And the company has made some significant acquisitions, including GitHub and LinkedIn. And analysts expect Satya to keep shopping — to the tune of $2 billion this year, according to one analyst.

Ashley Stewart takes a look at some of the next potential acquisition targets that Microsoft could go after. The list is based on speculation and analysis from people who follow the sector closely — there's nothing to suggest deal discussions are underway with any of these companies. Some of the names on the list are big players themselves, others less so. 

Read the full story here: Here are the 11 companies that experts think Microsoft could try to acquire in 2020, including Salesforce, Twilio, and Workday Here are some of the latest tech highlights:

Walmart just took a big step in its move to break Amazon's control over 3rd-party sellers and is officially letting sellers sign up for its fulfillment service

Tech startups have a new 'exit' strategy. Why private equity firms have started plowing billions into acquiring startups.

This ex-con hacker just made over $100,000 in a single day helping companies plug up their cybersecurity

Suddenly losing her job inspired this marketing pro to start a project to help Chicago's laid-off tech workers find their next gig — and break the shame of layoffs

A leaked video shows the head of Microsoft's competitor to Amazon's Twitch telling employees to stay positive, not 'complain and nag'

And more goodies from across the BI newsroom:

WeWork paid over $2 million in cash to a woman who threatened to expose claims of sex, illegal drugs, and discrimination in a horrifying 50-page document

Inside the $1 billion race to develop breakthrough batteries that could store up to 40% more energy and revolutionize our phones, cars, and planes

The 21 most influential digital creators based in New York who rule Instagram, YouTube, and other social-media platforms

That's it for this week. As always, thanks for reading, and remember, if you like this newsletter, tell your friends and colleagues they can sign up here to receive it.

— Alexei

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Microsoft says it won't meet its sales forecast for the upcoming quarter because of the impacts of the coronavirus (MSFT)

Wed, 02/26/2020 - 5:35pm  |  Clusterstock

  • Microsoft said it would fall short of its sales forecast for the upcoming quarter because of the continued spread of the coronavirus.
  • The "uncertainty related to the public health situation in China" has affected Microsoft's Windows and Surface hardware businesses, Microsoft said.
  • The forecasts for other parts of Microsoft's business didn't change.
  • Meanwhile, Microsoft could move the production of its Surface devices out of China because of the virus, according to a report from Nikkei Asian Review citing unnamed sources.
  • Click here to read more stories from BI Prime

Microsoft on Wednesday said it would miss its sales forecast for the upcoming quarter because of the impact of the coronavirus on its Windows and Surface businesses.

The business segment Microsoft calls "More Personal Computing" — which includes revenue from licensing Windows to PC manufacturers and its line of Surface hardware — is unlikely to hit the company's predicted $10.75 billion to $11.15 billion in revenue "due to uncertainty related to the public health situation in China," Microsoft said.

The forecasts for other parts of Microsoft's business are unchanged. Microsoft shares were down about 2% in after-hours trading immediately following the announcement to about $167 per share.

The updated guidance comes after Microsoft canceled events in China in Shanghai, Taipei, and most recently Hong Kong related to its Ignite conference

"As Microsoft closely monitors the impact of the COVID-19 health emergency, our top priority remains the health and safety of our employees, customers, partners, and communities," Microsoft said Wednesday. "Our global health response team is acting to help protect our employees in accordance with global health authorities' guidance."

Meanwhile, Microsoft could be moving production of its Surface devices out of China because of the virus, according to a report from Nikkei Asian Review citing unnamed sources. Microsoft declined to comment to Business Insider on the report.

The update comes after Microsoft last quarter had what appears to be the best quarter for its Windows business since Satya Nadella became CEO in 2014 and started refocusing the company on the cloud. It was thanks to Microsoft ending support for Windows 7, its operating system that was used on millions of PCs since its launch in 2009, and encouraging users to upgrade to Windows 10 or buy new PCs that come preinstalled with it.

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White House officials express hopes that coronavirus will advance 'America First' agenda

Wed, 02/26/2020 - 5:13pm  |  Clusterstock

  • For some administration officials, the coronavirus outbreak could present an economic opening in the US.
  • As President Donald Trump vies for re-election in November, it could advance an "America First" agenda.
  • The administration has renewed focus on ways to "strategically" move certain supply chains back to the US since the outbreak in late 2019, White House trade adviser Peter Navarro told POLITICO on Wednesday.
  • Visit Business Insider's homepage for more stories.

Despite growing fears about how the novel coronavirus could disrupt American business and financial markets, the Trump administration has maintained an rosy outlook toward the economy in recent days. 

Administration officials have appeared hesitant to align with independent forecasters saying the fast-spreading respiratory illness could chip away at global growth. And for some, there is even a potential tailwind: that the outbreak could advance an "America First" agenda as President Donald Trump vies for re-election in November. 

In an interview with POLITICO published Wednesday, White House trade adviser Peter Navarro said it was "cynical" to say that officials saw room for economic gains from what has been named COVID-19. 

But the administration has renewed focus on ways to "strategically" move certain supply chains back to the US since the outbreak in late 2019, he said, a signature campaign promise for Trump. The White House press office declined to comment to Business Insider.

"All we're doing here is seeing the chess board," Navarro told POLITICO. "This is a case where, for our public health and economic and national security, we need to do just that."

Navarro has established himself as the most hawkish trade adviser under Trump, but similar sentiment was echoed by others in the White House in recent weeks.

In January, Commerce Secretary Wilbur Ross said the coronavirus could "accelerate the return of jobs to North America."

"Well, first of all, every American's heart has to go out to the victims of the coronavirus. So, I don't want to talk about a victory lap over a very unfortunate, very malignant disease," Ross said in an interview with Fox Business Network. "But the fact is, it does give businesses yet another thing to consider when they go through their review of their supply chain."

SEE ALSO: The coronavirus is raising alarm among consumers, the powerhouse of the US economy

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Bond king Jeff Gundlach claims Bernie Sanders is responsible for the market sell-off — even as other experts cite coronavirus fear

Wed, 02/26/2020 - 5:02pm  |  Clusterstock

  • Jeff Gundlach, Wall Street "bond king" and DoubleLine Capital CEO, claimed Bernie Sanders' frontrunner status in the 2020 Democratic primary is a reason for stocks' tumbling prices.
  • "The market is digesting a better than 50% chance of Bernie getting the nomination," Gundlach told CNBC in an email.
  • The comments are at odds with the numerous economists and analysts pegging the downturn to growing worries that the coronavirus will drag on global economic growth.
  • Visit the Business Insider homepage for more stories.

Wall Street "bond king" Jeff Gundlach believes Sen. Bernie Sanders and his surging Democratic primary campaign is to blame for the stock market's recent tumble.

Several economists and analysts say otherwise, pegging the spike in volatility to heightened coronavirus concerns.

The DoubleLine Capital chief executive told CNBC in an email that the progressive candidate's frontrunner status is spooking investors and sending the market into a downward spiral. Sanders is enjoying a hefty lead over other candidates after winning the vast majority of delegates in the Nevada caucus and tying with former South Bend Mayor Pete Buttigieg for delegates in New Hampshire. The senator from Vermont's ascension in the primary race is playing a key role in pushing markets lower, Gundlach claimed.

"If this stock market reversal is due exclusively to the virus, then why is United Healthcare down far more than [the S&P 500]?" Gundlach asked CNBC's Scott Wapner in an email. "Why is healthcare as a sector broadly not outperforming?" Answer to these questions: The market is digesting a better than 50% chance of Bernie getting the nomination."

Read more: Goldman Sachs reveals the 10 best stocks to buy now for a market comeback from the coronavirus-driven plunge

The comment arrives as US stocks turn negative after a brief morning recovery on Wednesday. The move matches the dips seen in global markets earlier in the day and extends a gloomy week for investors exposed to risk assets. The S&P 500 and Dow Jones Industrial Average both wiped out their year-to-date gains on Tuesday after falling the most since 2018 the day prior. The 10-year Treasury bond sank to a fresh record-low on Wednesday as coronavirus worries drove investors to traditionally defensive assets.

Numerous experts have warned the outbreak is more serious than recent stock prices reflected. Equities stood at record highs just weeks ago despite frequent updates showing the epidemic spreading further around the world. Should the virus turn into a global pandemic, Oxford Economics projects the fallout will knock 1.3% — about $1.1 trillion — from world economic growth in 2020.

The outbreak is pushing the world economy "to the brink of a global recession" and investors should start taking defensive positions to protect their wealth, Nigel Green, CEO of financial services firm deVere Group, said Wednesday.

Read more: 26 units and $1 million a year: Here's the 'supercharged' real-estate-investing system a former engineer used to flee corporate America in just 3 years time

The coronavirus is responsible for more than 2,760 deaths and has infected more than 81,000 as of Wednesday morning. Though the epidemic is concentrated in China, new deaths in Iran, Italy, and South Korea ramped up fears of the virus further damaging the global economy. Brazil confirmed its first coronavirus case on Wednesday, marking the first case in South America.

Gundlach also decried the prolonged move of investment capital into passive funds. The billionaire suggested Monday and Tuesday's drops showed "the dark side of momentum investing (which is exactly what defines 'passive')," adding that a poorly performing market creates a dangerous cycle for passively managed investments.

"The market goes down in a knee jerk way on the Bernie rise, but the market going down makes Bernie's polls go up on his rejection of a market based economy. Which makes the market go down another leg," Gundlach wrote. "Rinse and repeat."

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

Coronavirus vaccine developer Moderna soared 30% as US stocks suffered their worst stretch in years. Here are the 10 investors that benefited most — and how much they made.

An inside look at the debate around pandemic bonds, which have $425 million hinging on how deadly the coronavirus ends up being

Here's why investors are pouring millions into Amazon-focused startups even as adtech funding dries up

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Inside a massive gathering of top private-equity players, where slumping returns and coronavirus concerns are dominating conversations

Wed, 02/26/2020 - 4:39pm  |  Clusterstock

  • The blowout private-equity confab, SuperReturn, is underway in Berlin, Germany, and Business Insider was on the ground to document the opening day. 
  • Just before kickoff, attendees were hit with news that would hang over the day's events: reports that coronavirus was spreading, with more than 80,000 people infected, and a Bain & Co report that US private equity returns essentially matched US stocks the past decade. 
  • Kewsong Lee, co-CEO of The Carlyle Group, said that his firm was monitoring portfolio companies and doing everything it can to help its employees through the coronavirus scare, but expressed optimism as well. 
  • There was also industry chatter about what might happen as we reach a late economic cycle, and how private-equity firms are positioning themselves for a downturn. 
  • Below we set out to chronicle the big takeaways from the day's events, with quotable sound-bites from private equity's glitterati. 
  • Click here for more BI Prime stories.

Just before the start of SuperReturn, the annual private-equity confab that's drawing thousands of investors, lawyers and consultants around the world, attendees were hit with news that would hang over the day's events. 

The World Health Organization announced that coronavirus cases outside China were accelerating, infecting about 80,000 people in nearly 40 countries, with at least 2,600 people dead. That caused global stocks to tumble

At the same time, an industry report from consulting firm Bain & Co offered a worrisome outlook on the state of private-equity investing.

Its findings showed that U.S. buyout funds essentially matched U.S. stocks over the past 10 years, and that PE shops were having a harder time getting good returns, given the amount of dry powder — more than $1.5 trillion — which has driven up prices for deals.  

"If you draw a trend line between the 10-year return in 1999 and the 10-year return today, it would show a decline of 6 percentage points over that period," the authors of the report wrote. 

These topics kept cropping up throughout the first day of the SuperReturn conference here in Berlin, where CEOs and other executives of some of the largest private-equity shops have flocked to network, do deals, and market their businesses. 

Taking the stage Wednesday, Kewsong Lee, co-CEO of The Carlyle Group, told Bloomberg anchor Matt Miller that he was concerned about the coronavirus, especially as it affected Carlyle employees, but that he thought the global economy would power through the upheaval. 

"My guess is the impact will be greater than people think because this is such an unknown and uncertain situation that's still evolving," said Lee. "People are just starting to appreciate the magnitude."

Carlyle is monitoring its portfolio companies carefully, he said, and with travel down, logistics and supply chains have been disrupted, he said.

"You can't have 40, 50 percent of the world's second-largest economy be sequestered in the way it has been and not have an impact globally. You can't have an economy that in some shape or form touches 55 percent of manufacturing output globally, and not have an impact on the world."

But he also expressed some optimism. 

"Yes, the short-term impact is quite real, but the central banks are being accommodative," he said in an attempt to quell fears of its toll on the economy, noting that we should "continue to see low, steady growth over the long-term." 

As for the Bain report, Lee said private-equity has outperformed the public markets historically, and that the amount of private deal opportunities has expanded along with the amount of capital ready to deploy, so it didn't necessarily mean doom and gloom for PE investors. 

"The real question isn't, 'Can we put it to work?" he said. " I can put a lot of money to work tomorrow. The issue is what are the right situations to put our capital into? Because driving value and creating returns when we are paying such high prices are exceptionally difficult."

Those comments were just a few of an action-packed first day at SuperReturn, chock-full of speaking engagements and quotable sound-bites from private-equity's glitterati.

The event was held mostly in a large dark room with five big screens behind the main stage, featuring video of panel participants so the whole room could see.

Walking throughout the conference, held in the spacious ground-floor of the InterContinental Hotel, one could pick up on some of the biggest topics that were top of mind for attendees.

Of course, many held private meetings in executives' hotel suites a quick elevator ride away, ready to sell their funds to prospective investors, or talk about a proprietary deal. 

But there was also industry chatter, including worries about what might happen as we reach a late economic cycle, and how private-equity firms are positioning themselves for a downturn. 

Jeff Aronson, co-founder of Centerbridge Partners, expressed as much on stage when he spoke to how his private equity firm of more than $25 billion in assets under management, was increasingly structuring deals with layers of credit and equity to protect the firm in the event their investment cratered in a recession. 

These so-called "structured equity" deals have expanded at his firm, he said.

Historically these deals consisted of about 37% of Centerbridge's investments, he said, but last year they made up about half of the capital Centerbridge deployed.

The reason?

"Because we don't know what will happen, we would rather trade some upside for some downside protection," he said. 

Aronson likened the activity to buying insurance on your home when there hasn't been a fire for years. Some might decide that they've wasted money on premiums and stop paying insurance.

"We don't think that way," he said. "Even though we may have given up some upside, that downside protection, which we have not had to avail ourselves to, we think is really valuable."

One side-effect of the economic cycle is that Centerbridge is not doing any distressed-for-control investing, given that, in Aronson's words: "if you're a troubled company in today's U.S. economy, there is probably something deeply wrong." 

To make sure PE shops get their investments right, executives should be laser-focused on finding healthy streams of positive free cash flow in companies they invest in, said Aronson and other speakers. 

"Every time investors get disconnected from cash flow, they lose money," said Michael Arougheti, CEO of Ares Management, in an interview with John O'Sullivan, a columnist with The Economist. 

"Go back to the simple understanding that the way we pay back a loan is through cash flow and the way we create sustainable value ...  Nobody gets hurt and we all do well."

For the most part, though, many PE execs seemed little-fazed by how it's getting harder and harder for private equity to achieve high returns.  

Regarding the Bain report, Leon Black, CEO of Apollo Global Management, said that when he saw the news that public equity performed better than private equity, "my feeling was, 'great.'"

"Sometimes the Celtics win. Sometimes the Lakers win," he jokingly told his interviewer, Hartley Rogers, chair of Hamilton Lane.

"Even the Knicks win some 50 years ago. Which is a sad story for me as a New Yorker, but a good memory."

Black pointed to all the take-private deals PE shops do — Apollo alone did 80 over the past three decades, he said — as well as IPO exits. 

"Having a robust public market is in everybody's interest," he said.

SEE ALSO: The biggest private-equity investors are jetting to Berlin this week to talk deals. Insiders say these 5 themes will dominate conversations.

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SEE ALSO: It's only going to get harder for private-equity giants to find cheap things to invest in, and that will be a huge drag on returns over the next decade

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2 reasons why the Capital One Venture has become one of my favorite cards for travel rewards

Wed, 02/26/2020 - 4:34pm  |  Clusterstock

 

When I think of the Venture card from Capital One, I think of a lot more than the clever commercials with Alec Baldwin and Jennifer Garner. Over time, this card has gone from middle-of-the-road to a top-tier option for earning travel rewards.

After adding new benefits and features over the last few years, the Venture card certainly ranks among my top five general travel rewards cards and is a perfect starting point for someone looking to earn and redeem flexible rewards, with some good benefits to boot. Here's a deeper look at what the Venture offers and why it's worth a fresh look, even if you didn't think it was the right fit in the past.

Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back. 

Improved rewards earning (and burning)

This card starts you out with a 50,000-mile bonus after you spend $3,000 in the first three months. You'll earn a flat 2 miles per dollar on every purchase, which makes it easy to earn miles quickly without worrying about which card to use where.

Read more: The best credit card sign-up bonuses available now

The easiest way to redeem, and a perfect starting place for people new to travel miles and points rewards, is the Capital One Purchase Eraser feature. This gives you 1 cent per mile to erase any past travel purchase. You can also book travel through the Venture portal to get the same value when booking new travel.

Capital One also offers the ability to transfer miles to partner airlines. There is a list of 15 airline partners. While JetBlue is the closest option to a major US carrier, some are partners with big US airlines and allow you to book partner awards in the US. Of course, they are also great for flying to their home countries and regions in many cases. Capital One recently added two hotel partners as well: Accor and Wyndham.

It's trickier to know exactly how much value you'll get when transferring unless you do the math on each award redemption as you go. Venture miles transfer at a 2:1.5 ratio or 2:1 ratio depending on which partner you choose.

If you redeem for premium business or first-class bookings, you'll probably get a whole lot more in value than the 1 cent per mile offered by the Purchase Eraser. But in some cases, you could end up with less than 1 cent per Venture mile, so you should always compare and run the numbers to make sure you get at least 1 cent.

Read more: Chase Sapphire Preferred vs. Capital One Venture — credit card comparison

Improved Venture card benefits

The card has all the benefits you'd expect in exchange for a $95 annual fee. These include no foreign transaction fees, travel accident insurance, and rental car collision damage coverage.

For purchases, new cardholders get purchase protection and an automatic extended warranty through their Visa Signature benefits. I'm going through the process of an extended warranty claim right now, and I'm so glad I have this benefit.

And don't forget about that TSA PreCheck or Global Entry credit of up to $100. Global Entry is definitely the best option if you have this credit. If that's the route you go, it's worth $20 per year. Don't leave that offer on the table.

Read more: Capital One Venture card review

My verdict

Thanks to the benefits Capital One's added over the last year, the Venture card has risen into my top-five list for the best travel rewards credit cards. For a card with an annual fee of just $95 (waived the first year), it's excellent for its 2x earning rate and easy Purchase Eraser redemptions. And the benefits are not too shabby, either.

A couple of years ago, Venture was an okay card that didn't get me all that excited. But these days, it's worth a serious look. It isn't my personal number-one card, but it is a great choice for a lot of people and one I would certainly recommend considering.

Click here to learn more about the Capital One Venture card »

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I didn't believe in saving for retirement in my 20s, but I changed my ways when I realized how much I'd have to save each month to retire by 65

Wed, 02/26/2020 - 4:13pm  |  Clusterstock

For most of my 20s, I didn't believe in the idea of retiring. How could I? I was struggling to figure out what kind of career I wanted and, every few years, I landed at a new company, in a new industry, starting at the bottom of the heap.

On the first day at every job, I'd roll my eyes when asked if I wanted to contribute any of my monthly earnings to a 401(k) account. At 75% of the five companies I worked for in my 20s, they didn't match the contribution, which made me struggle even more with the idea of opening a retirement fund. Why plan for retirement when I can hardly plan for right now?

But as I watched my parents reach retirement age and have the money needed to stop working, my thinking started to shift. I was about to turn 32 and had been so fiercely against planning for my financial future that when I finally woke up and realized the big mistake I was making, I was extremely behind on saving for retirement.

I decided to change my ways. First, I had to settle on a goal retirement age; I chose 65, since retiring any younger seemed impossible and, by that age, I'll (hopefully) be able to use Medicare, collect Social Security, and withdraw cash from my retirement accounts without a tax penalty.

Setting up my retirement savings strategy

Now that I had a retirement age in mind, I was able to work backward. I used a retirement calculator to estimate what I should be putting aside monthly and contributing to my retirement fund, based on factors like my age, salary, and how much I've put away so far. It allowed me to see what number I should aim for.

The retirement calculator spit out a number higher than I feel I can afford to put away right now, but it gave me a goal to strive for. I've decided to cut back on my expenses by 15% to begin to increase my monthly contributions, hoping to make that percentage larger by the end of the year.

Next, I decided to catch up on educating myself around retirement funds, where I should put my money, and the kind of account to open. I read a handful of books and met with a local financial adviser who told me that, since I'm self-employed, a SEP IRA makes the most sense for me at this point.

I also made a promise to myself to attend a retirement fund management workshop, online or in person, twice a year to stay up to date on managing this money. 

Finally, I found myself working harder and making smarter financial decisions around spending and saving money because now I have a true retirement plan in place. Before, the idea of retiring seemed like a myth or a long-lost goal. But now I have an age to work toward and an amount of money I hope to see in that retirement fund when I turn 65.

I'm 31 now. It does feel like a long time away, but at least when the day comes to retire, I will be proud of how my younger self actually had a plan.

Talk to a financial planner today to get help with your retirement strategy. Use SmartAsset's free tool to find a qualified professional »

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By age 30 I'd saved $0 for retirement, but a strategic plan means I should be able to retire in 20 years

Wed, 02/26/2020 - 3:49pm  |  Clusterstock

Like a lot of millennials, I long assumed I'd never be able to retire, so I didn't bother saving for retirement. I also felt like I could barely make a dent in a savings account for most of my 20s anyway, as I was busy paying off debt and trying to find a decent-paying job.

However, as I approached 30, my mindset changed. I started to think more about what I wanted my future to look like, and not just a year or two in advance, but a decade or two. I also watched my dad and stepmom retire in their early 50s, more than a decade before most of their peers.

Suddenly, I wanted to be able to retire early. The only problem was that I felt way too far behind.

I started at age 30 with $0 saved for retirement

My savings account balance hovered around $0 for most of my 20s. The few times I managed to save up money, or contributed to my 401(k) for a few years, I just as quickly drained it to travel or move across the country.

At age 29, I finally paid off all my debt and started a small emergency savings fund. By the time I turned 30, I was debt-free, and I'd built up my emergency savings fund to cover a year's worth of basic living expenses. However, by my 30th birthday, I still had $0 saved for retirement.

I kept saving, though, and a few months into my 30th year I had enough extra money stashed away to invest in index funds with Vanguard. I opened an account and finally started my retirement fund with a $10,000 balance.

Making a 20-year savings plan to retire by age 50

I decided to set a goal for myself to retire by 50, despite having just started saving at age 30. That would give me 20 years to save and invest enough money to retire.

My dad's original goal was to retire by 50, so it seemed like a good age to me. Learning about the FIRE movement (financial independence, retire early) also inspired me to do this. It's all about changing up your lifestyle so you can increase your savings rate as much as possible, and then investing all of your savings until you have enough money invested that you can draw a salary from the dividends your investments earn.

Most members of this movement aim to retire much quicker, often within the next 10 years, or in their 30s and 40s. They do this by living frugally and saving at least 50% of their income, (a lot save 75%). In retirement, they often continue to live just as frugally.

To be honest, I'm not interested in living frugally, now or in retirement. So, I decided to meet the FIRE movement in the middle and give myself 20 years to save for retirement and achieve "financial independence," meaning I could live off my investments. To achieve this, you need to achieve a net worth that's 25 times your annual living expenses.

Using an early retirement calculator, I set my age to 30, my annual income to $80,000, my annual expenses to $45,000, and my current net worth to $10,000. These numbers gave me the magic age I was looking for: financial independence by 50.

With my savings rate at 44%, this plan is considered too spendy for most people in the early retirement movement. However, I felt that it was a reasonable compromise that would allow me to fully enjoy my life now while still achieving financial independence early on in life.

Under my current plan, my monthly expenses have to stay below $3,750 so that I can save $2,917 each month. If my income increases dramatically, I'll try to increase my savings rate along with it instead of falling prey to lifestyle inflation and spending all of that extra money. That way, I might retire even earlier, or I have an extra cushion in case my income ever takes a hit.

How I increased my savings rate

Switching to remote work and self-employment has, ironically, helped me save a lot of money. I have control over my income and can learn new, lucrative skills that allow me to demand higher rates and make more money. 

I can also work from anywhere in the world, allowing me to live in low cost-of-living areas while making a higher salary. I moved abroad where I can afford to live the lifestyle I want without going into debt.

My strategy for keeping my savings rate up is to focus on keeping my three biggest fixed costs to a minimum: housing, transportation, and food. To be fair, I don't always keep my food costs to a minimum. But I make up for it by finding places to rent that are extremely low cost, by either living outside of city centers or renting with roommates, and getting around on foot and by public transportation. I don't own a car.

This won't work for everyone. Your own preferences and needs will dictate where you can and can't cut costs. However, if you're willing to make some big changes to your current life, it's possible to retire a lot earlier than you think.

Talk to a financial planner today about retiring early. Use SmartAsset's free tool to connect with a qualified professional »

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Review: The Delta SkyMiles Blue card earns bonus miles on your everyday spending, without an annual fee

Wed, 02/26/2020 - 3:28pm  |  Clusterstock

 

The partnership between Delta and its credit card issuer, American Express, goes back over two decades. But the airline and bank started an exciting new chapter with an overhaul of their portfolio of co-branded credit cards in January 2020.

Among the most rewarding of the new developments is the fact that the high-end Delta SkyMiles® Reserve American Express Card now gets cardholders into both Delta Sky Clubs and Amex Centurion lounge when flying Delta, and will refund cardholders up to $100 to cover the application fee for either Global Entry or TSA PreCheck. It also now offers the opportunity to earn up to 60,000 Medallion Qualification Miles (MQMs) toward elite status through spending each year. The one downside is that the annual fee has been increased from $450 to $550 going forward.

But at the other end of the spectrum, with no annual fee, the Delta SkyMiles Blue Amex card still offers some exciting benefits. Here's what you need to know.

Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back.

Delta SkyMiles Blue American Express Card Details

Annual fee: $0

Welcome offer: Earn 15,000 bonus miles after spending $1,000 in purchases on your new card in your first three months of card membership. Offer expires April 1, 2020.

Earning: 2 miles per dollar on Delta purchases and at restaurants, 1 mile per dollar on everything else

Travel benefits: 20% back on in-flight purchases of food, beverages and audio headsets, ability to Pay with Miles when booking on Delta.com

Other benefits: No foreign transaction fees

Click here to learn more about the Blue Delta Amex card »

Here's a detailed review of the card's specific benefits.

Welcome offer

The welcome offer for the Delta Blue card is lower than those available at this time from some of the other Delta co-branded cards. For instance, the Delta SkyMiles® Platinum American Express Card is currently offering new applicants up to 100,000 bonus miles — 80,000 after you spend $3,000 in the first three months, and another 20,000 miles after your first account anniversary. That said, the Delta Platinum card has a $250 annual fee and the spending requirement to earn the welcome bonus is higher, at $3,000.

By comparison, you only earn 15,000 bonus miles with the Delta SkyMiles Blue Amex card, but you only have to spend $1,000 in the first three months to qualify. That number of miles might not wow you, but it's not bad for a card with no annual fee, and thanks to Delta's frequent award flight flash sales, 15,000 miles is now enough for some economy award tickets within the US and abroad.

This is also the highest welcome offer for the Delta Blue card – in the past it's actually been just 10,000 miles after you spend $500 in three months – so if you've been thinking about applying, this current offer is probably your best bet.

Read more: The best ways to use Delta miles

Earning and category bonuses

The second way in which the Delta SkyMiles Blue card stands out is that it earns bonus miles not just on Delta purchases, but also those made at restaurants worldwide (not just in the US, as was previously the case). That's a pretty great earning formula for a no-annual-fee card.

Just to take two quick comparisons, the Blue's big brother, the Delta SkyMiles® Gold American Express Card, earns 2x miles on Delta purchases and at both restaurants and US supermarkets, but costs $99 per year to carry (though the annual fee is waived the first year). Meanwhile, American Airlines' card with no annual fee, the American Airlines AAdvantage MileUp℠ Card, earns 2x miles on eligible American Airlines purchases and at grocery stores. So the Delta Blue card is trying to get back in the game with a competitive earnings edge.

Read more: The best no-annual-fee credit cards

Travel benefits

Here's where the Delta SkyMiles Blue card might fall short for some frequent flyers. Delta's other cards offer members valuable day-of-travel perks like free checked bags and priority boarding. This card's main travel benefit is a 20% discount on in-flight purchases of food, beverage and audio headsets. Unfortunately, it does not apply to Wi-Fi purchases.

Other benefits

With the recent benefits overhaul, the Delta SkyMiles Blue Amex card no longer levies foreign transaction fees, which will make it more useful for folks traveling abroad since they won't be paying a ridiculous 2.7% surcharge on their purchases.

Read more: The best credit cards with no foreign transaction fees

The card also comes with secondary rental car insurance and typical inclusions like a one-year warranty extension benefit for items you buy and purchase protection that covers you for damage or theft up to 90 days after a purchase up to $1,000 per item and $50,000 per calendar year.

Is the Delta Blue card right for you?

The Delta SkyMiles Blue card's two strengths are earning potential and the fact that it has no annual fee. These two factors make it a good choice for specific types of Delta travelers.

First, if you already earn Medallion elite status with Delta on a regular basis, you enjoy perks like a free checked bag and priority boarding anyway, without needing a co-branded credit card to provide them for you. So this card might be an attractive alternative to its more expensive brethren.

Second, if you're actually making a substantial number of Delta purchases and spend a lot at restaurants, this card's earning rate is quite good — especially considering you don't have to pay annual fee to hang onto it year after year. Finally, if you already have some of Delta's other cards and want to earn a welcome offer complete with a haul of bonus miles, then this card could be a good alternative to applying for some of the others in the portfolio.

On the other hand, if a $99 annual fee doesn't seem expensive, you're probably better off applying for the Delta Gold card. Right now, it is fielding a welcome offer of up to 70,000 bonus miles – 60,000 miles after you spend $2,000 in the first three months, plus another 10,000 miles after your first account anniversary.

The Delta Gold Amex card earns 2 miles per dollar on Delta purchases and at restaurants as well as US supermarkets, which is another potentially lucrative earning opportunity for everyday shoppers. Plus, if you spend $10,000 on the card in a calendar year, you can score a $100 Delta flight credit, which offsets its annual fee. Finally, this card offers several travel benefits the Blue version does not – namely, a free checked bag for the cardholder and up to eight companions on the same reservation, and priority boarding ahead of the general announcement.

With no annual fee, the Delta SkyMiles Blue American Express card is a strong earner and a decent option for both occasional Delta flyers and those with elite status who value earning over day-of-travel perks. However, if you want to commit to Delta in a more substantial way (at least for the time being), then one of the airline's more premium cards is likely a better choice for your needs.

Earn 15,000 miles: Click here to learn more about the Delta Blue card »

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Tim Cook said he'd answer questions about the 'fairly dynamic situation' of coronavirus at Apple's shareholder meeting, then closed the meeting without addressing it (AAPL)

Wed, 02/26/2020 - 3:15pm  |  Clusterstock

  • The ongoing coronavirus outbreak was not a major talking point during Apple's annual shareholder meeting, despite the fact that it prompted the company to revise its March quarter revenue guidance earlier this month.
  • Apple CEO Tim Cook briefly touched on the outbreak, calling it a "fairly dynamic situation" that has posed "a challenge" for the tech giant.
  • Although the coronavirus wasn't a major talking point during the meeting, some advocates of shareholder proposals did bring it up in their talking points.
  • The ongoing spread of the virus has made it difficult make predictions about Apple's performance and the status of its future products. For example, the company did not provide a new estimate when it revised its revenue guidance for the March quarter. 
  • Visit Business Insider's homepage for more stories.

The global coronavirus outbreak has become the biggest near-term threat to Apple's business, disrupting production of its most important product, the iPhone, and causing the company to temporarily shutter half of its retail stores in China. 

But Apple glossed over the topic during its annual shareholder meeting on Wednesday, as CEO Tim Cook largely ignored the coronavirus during his talk, leaving some attendees at the event surprised and perplexed.

Speaking just over a week after Apple announced it would miss its sales targets for the quarter because of the outbreak, Cook briefly touched on the outbreak, calling it "a fairly dynamic situation" and saying that it has caused "a challenge" for the firm.

"First priority is the health and safety of our employees and our partners," Cook said during the meeting. "That's where our energies are."

Cook said he would try to answer any questions shareholders had during the Q&A portion of the meeting. But of the nine questions that Cook answered, four of them submitted in advance and handpicked by Cook, the topic never came up again. 

"I figured there would be prepared statements," said Ajit Rao, an Apple shareholder from Denver who travelled to Apple's Cupertino headquarters for the meeting. "There was a little of that, but there was no detail."

The coronavirus outbreak caused global stocks to plummet earlier this week, and on Tuesday US health officials warned the the disease's spread to the US was "inevitable."

An Apple representative declined to comment on why none of the pre-submitted questions Cook chose to answer at the meeting pertained to the coronavirus topic.

Questions about the effect on upcoming iPhone models 

In a rare move, Apple revised its quarterly revenue guidance earlier this month citing supply constraints and weakened demand caused by the outbreak. The revision came after the company temporarily closed its stores, corporate offices, and contact centers in China. Apple corporate offices and contact centers have since reopened, and the company has resumed business at more than half of its retail stores in China, as Bloomberg reported. 

But Apple said its iPhone manufacturing sites are ramping up more slowly than expected, which is part of the reason it said it does not expect to meet its estimated revenue of between $63 billion and $67 billion for the March quarter.

The coronavirus wasn't a focal point during the meeting, but some advocates of shareholder proposals did mentioned it in their remarks. One advocate speaking on behalf of a proposal for Apple be more transparent with investors about its policies on freedom of expression, cited the coronavirus in her statements, for example. She said that the repression of free speech in China could restrict the ability of people to communicate about the outbreak.

Not all shareholders said that they were disappointed by Apple's lack of an update on the coronavirus. Louise Freerks, a resident of Cupertino who has been an Apple shareholder since 1995, said the news is already saturated with information. "How much more can you say," she said.

The coronavirus has made it difficult to make predictions about Apple's performance and its future products. The company did not issue a new estimate for its March quarter revenue, but only said that it did not expect to meet the target range it had initially set. Reports on whether or not Apple's upcoming devices will be delayed have also been mixed. Bloomberg reported that the rumored low-cost iPhone Apple is said to be working on is still on track to debut in March, while Nikkei Asian Review suggested the launch may be delayed, for example. 

But despite this uncertainty, some analysts have said that they do not expect the ramifications from the coronavirus to materially impact Apple's business in the long term. 

"If this is truly one time in nature, if it is just a supply chain disruption, if it doesn't really alter the fundamental long-term outlook, investors will give them a pass," Robert Muller, an enterprise hardware analyst for RBC Capital Markets, previously said to Business Insider.

Timothy Arcuri, an analyst with UBS, said in a research note on Monday that investors are likely to pay closer attention to Apple's expected iPhone 12 launch in the fall.

SEE ALSO: Apple's rare revenue warning left out something major — and it's a sign of how difficult it is to predict the coronavirus' impact on business

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Coronavirus vaccine developer Moderna soared 30% as US stocks suffered their worst stretch in years. Here are the 10 investors that benefited most — and how much they made. (MRNA)

Wed, 02/26/2020 - 3:14pm  |  Clusterstock

  • Investors are posting multimillion-dollar gains from Moderna's soaring stock price, profiting from the company's bid to offer a coronavirus vaccine.
  • Moderna spiked 30% between Monday and Tuesday's trading sessions. The biotech firm was one of the few US stocks to post major gains while the broader market slumped on intensifying outbreak concerns.
  • Here are the top 10 Moderna shareholders and how much they profited from the two-day rally, ranked in ascending order.
  • Watch Moderna trade live here.

Investors are pulling in hundreds of millions of dollars worth of gains from soaring biotech stocks as the race for coronavirus drugs intensifies.

Drug developer Moderna spiked 30% between Monday and Tuesday's trading sessions, beating out a plunging market by shipping the first coronavirus vaccine for human testing. The firm submitted vials of mRNA-1273 for phase one trials in the US just 42 days after identifying the key RNA sequence to target, according to a Monday press release.

Moderna shares gained 2% on Monday as the broader market slumped the most in two years. The biotech company soared as much as 43% in Tuesday's session before paring some gains.

Moderna's stock jump arrived one day after biotech company Gilead notched a similar uptick. The firm soared as much as 11% Monday after a World Health Organization official said its remdesivir compound could be the best bet for treating coronavirus cases. Gilead's drug is undergoing human trials in China, with results expected to be released in April.

Here are the top 10 shareholders to ride Moderna's two-day stock rally, ranked in ascending order of profit. Gain figures are calculated from the spike between February 21's close and the closing price on February 25. Holdings data are sourced from Bloomberg.

10. Stephane Bancel

Shares held: 7,456,986

Gain:$41,237,133

About: Bancel serves as the biotech company's CEO and as a venture partner for Flagship Pioneering, the firm that founded Moderna. He previously acted as CEO at French diagnostics company bioMérieux and at Eli Lilly and Company.



9. OCHA LLC

Shares held: 7,953,216

Gain: $43,981,284

About: Bancel serves as the majority equity holder and sole managing member of OCHA. The CEO has previously used the LLC to buy Moderna stock.



8. Boston Biotech Ventures

Shares held: 9,232,886

Gain: $51,057,860

About: Boston Biotech Ventures serves as another holding firm for Bancel to buy and sell Moderna shares. 



7. TAS Partners

Shares held: 10,828,850

Gain: $59,883,541

About: TAS serves as a holding company for Dr. Timothy Springer and Dr. Chafen Lu. Springer has helped several young biotech companies get off the ground, and was among Moderna's biggest shareholders before its initial public offering.



6. Robert S. Langer

Shares held: 11,509,357

Gain: $63,646,744

About: A scientist, inventor, chemical engineer, and professor at MIT, Langer serves on Moderna's board of directors. He has helped found several other biotech firms, both on his own and in partnership with venture capital firm Polaris Partners.



5. BlackRock

Shares held: 11,724,018

Gain: $64,833,820

About: BlackRock holds Moderna shares across several investment products. Moderna is the highest-weighted company in BlackRock's iShares Genomics Immunology and Healthcare ETF.



4. Fidelity

Shares held: 16,034,456

Gain: $88,670,542

About: Fidelity holds millions of shares of Moderna through the numerous index funds it offers to clients.



3. Vanguard Group

Shares held: 17,319,037

Gain: $95,774,275

About: Investment adviser giant Vanguard holds millions of Moderna shares through several of its funds, including its Total Stock Market Index Fund, Small-Cap ETF, and Extended Market ETF.



2. AstraZeneca

Shares held: 25,499,325

Gain: $141,011,267

About: AstraZeneca and Moderna announced an exclusive partnership to develop messenger RNA therapeutics in 2013 for numerous serious diseases and cancers. AstraZeneca made an upfront investment of $240 million for exclusive access to targeting specific diseases through the therapeutics.



1. Flagship Pioneering

Shares held: 50,867,600

Gain: $281,297,828

About: A well-known healthcare venture capital fund, Flagship Pioneering founded Moderna in 2010. The biotech company's CEO joined Flagship in 2013 and serves as a venture partner.

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

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Wall Street thinks Disney's new CEO Bob Chapek will be the company's profit protector as it undergoes a radical transformation



The next chapter for African genomics #Nigeria is poised to become a hub for genetics research, but a few stubborn challenges block the way.

Wed, 02/26/2020 - 3:08pm  |  Timbuktu Chronicles
From Nature:

In the affluent, beach-side neighbourhoods of Lagos, finance and technology entrepreneurs mingle with investors at art openings and chic restaurants. Now biotech is entering the scene. Thirty-four-year-old Abasi Ene-Obong has been traversing the globe for the past six months, trying to draw investors and collaborators into a venture called 54Gene. Named to reflect the 54 countries in Africa, the genetics company aims to build the continent’s largest biobank, with backing from Silicon Valley venture firms such as Y Combinator and Fifty Years. The first step in that effort is a study, launched earlier this month, to sequence and analyse the genomes of 100,000 Nigerians...[more]

Millions of wealth managers are racing to lock down next-gen financial advisers as they prepare for a wave of adviser retirements. Here are their playbooks for recruiting, succession, and pay.

Wed, 02/26/2020 - 3:00pm  |  Clusterstock

Among the biggest stories in wealth management today is the industry's plans around its financial adviser talent.

Around one-third of the industry, or some 111,500 advisers, will retire within the next decade, the industry research firm Cerulli Associates said in a February report. Meanwhile, traditional wealth managers are dealing with how to better attract and keep younger people through their rigorous adviser training programs.

Maintaining a strong pipeline of talent is not only a matter of survival for the profession that's aging and already under pressure from purely digital startups, but is also key to holding onto client assets that would otherwise fly out the door with exiting advisers, analysts say. Further, wealth firms need to be in position to win business from younger, more digitally native customers as they inherit wealth from baby boomers that have benefited from the long-running bull market.

"You have more advisers leaving the industry than we've been able to attract, and at the same time, you have wealth being created at a rate faster then we can even pursue," Jeff Tucker, the head of FAA sourcing and development at Morgan Stanley, told us in a recent interview.

Addding to the industry's urgency are big growth plans. Wall Street firms and beyond are expanding or adding financial planning and money-management services as stock-picking and investing advice alone is largely being automated out. 

Business Insider is tracking how the industry is trying to shape the financial advisers of the future with competitive pay, fresh recruiting strategies, and a focus on technology. We're also reporting on how new advisers are trying to succeed in a fiercely competitive space. Below is a selection of stories Business Insider has published around these themes.

Have an idea for another story, or a tip? Contact this reporter at rungarino@businessinsider.com.

Wealth management firms' recruitment plans An inside look at how advisers are trained Financial advisers' evolving wealth-tech How retiring advisers transition assets to the new generation

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