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WHERE ARE THEY NOW: First kids of the United States

Wed, 07/03/2019 - 5:15pm  |  Clusterstock

  • Barron Trump, 13, has lived in the White House for almost two years. It's the first time since John F. Kennedy Jr. that a boy is living at 1600 Pennsylvania Ave.
  • The first kids of US presidents are in the public eye almost as much as their parents. They dictate fashion trends, appear on their parents' behalf at embassies around the world, and sometimes host senior prom in the White House East Room.
  • But when the first family departs, the spotlight typically turns away from them. We're taking a look at what they've been doing ever since.
  • Visit BusinessInsider.com for more stories.

Some first kids follow their parents into politics, some write about it, or tour the country talking about it, and others do their very best to steer clear of the limelight.

Regardless of what these well known kids end up doing after they move out of 1600 Pennsylvania Ave., they're still an important part of United States history.

Here's a look at what the first children are up to these days.

Melissa Stanger and Melia Robinson contributed to previous versions of this article.

SEE ALSO: Trump once reportedly complained the White House is a 'dump.' Photos show how surprisingly small it is.

Caroline Kennedy served as the US ambassador to Japan.

Daughter of John and Jackie Kennedy

Caroline Kennedy served as the US ambassador to Japan for three years. She was the first woman ambassador, and during her tenure former President Barack Obama strengthened his relationship with Prime Minister Shinzo Abe. She resigned from the job shortly after President Donald Trump was sworn in in 2017.

The former attorney, 61, also serves as president of the JFK Presidential Library and has written 10 best-selling books on constitutional law, American history, and poetry.

In 2019, she presented House Speaker Nancy Pelosi with the John F. Kennedy Profile in Courage Award.

Caroline is married to American designer Edwin Schlossberg and they have three children. 



Lynda Bird Johnson Robb advocates for equal rights for women and minorities.

Daughter of Lyndon and Lady Bird Johnson

At 75, former Virginia first lady Lynda Bird Johnson Robb is the oldest living child of a US president. In the '70s, she chaired the President's Advisory Committee for Women to help carry out former President Jimmy Carter's mandate to promote gender equality.

Lynda Bird, whose father signed the 1964 Civil Rights Act and 1965 Voting Rights Act, spoke at the 50th anniversary ceremony of the March on Washington and attended the remembrance banquet for the 50th anniversary of the "Bloody Sunday" assault in Selma, Alabama.

She has openly supported same-sex marriage, and she and her sister Luci Baines told Katie Couric in an interview in 2014 that she believes her father would have been, too.

In 2019, the Johnson sisters christened a warship bearing their father's name by smashing champagne bottles against the ship.

Lynda Bird has three children with husband Chuck Robb, who was the governor of Virginia from 1982 to 1986 and the state's senator from 1989 to 2001.



Luci Baines (née Johnson) chairs the private holding company her mother founded 70 years ago.

Daughter of Lyndon and Lady Bird Johnson

Like mother, like daughter: Luci Baines Johnson and her husband Ian Turpin took the helm of LBJ Asset Management Partners in the late '80s and completely turned the business around during the economic crisis.

In February 2017, Luci Baines attended a gathering in Austin, Texas, to show support for the Muslim community. A marcher who met Luci shared a post about their encounter that went viral.

Now 71, Luci Baines had four children with her first husband, Patrick John Nugent.



Tricia Nixon Cox lives a quiet life with her family in Manhattan.

Daughter of Richard and Pat Nixon

Trisha Nixon Cox, 73, accompanied her father on many campaign stops and state trips during his presidency but has steered clear of the spotlight since starting a family more than 40 years ago.

Trisha serves on the board of the Richard Nixon Foundation and is married to Edward Cox, whom she wed in the first wedding in the White House Rose Garden in 1971. The couple had one child.



Julie Nixon Eisenhower married into another presidential lineage.

Daughter of Richard and Pat Nixon

A staunch supporter of her father after the Watergate scandal, Julie Nixon Eisenhower, 70, lives on a Pennsylvania farm away from the public eye. She married David Eisenhower, President Eisenhower's grandson, uniting two of the country's most powerful political families.

She wrote a biography about her mother, "Pat Nixon: The Untold Story," and also serves on the board of her father's presidential library. She and her husband authored a memoir about her grandfather-in-law, "Going Home to Glory: A Memoir of Life with Dwight D. Eisenhower, 1961-1969." The couple had three children.



Michael Ford spent 36 years overseeing campus life at Wake Forest University.

Son of Gerald and Betty Ford

Michael Ford, who went by Mike, returned to his alma mater, Wake Forest University, in 1981 as associate dean of campus life, and retired in 2017 after 36 years.

He married Gayle Ann Brumbaugh in 1974. The couple had three children.



Jack Ford was a founding staff member of the magazine Outside.

Son of Gerald and Betty Ford

John Gardner "Jack" Ford, 67, — once President Ford's "free-spirited, shaggy-haired son" — grew into a successful entrepreneur. He founded a startup, California Infotech, which supplied electronic information kiosks to malls. He also helped launch Outside magazine.

After appearing at half a dozen Republican National Conventions, Jack served as executive director of the San Diego host committee for the RNC in 1996. 

In 1989, he married Juliann Ford. They have two sons.



Steven Ford appeared on seven seasons of "The Young and the Restless."

Son of Gerald and Betty Ford

Wild-child Steven Ford, 63, joined the cast of television soap opera "The Young and The Restless" in 1981, playing P.I. Andy Richards. After six seasons and a role reprisal in 2002, he has since appeared in a number of films, including "Armageddon," "Black Hawk Down," "When Harry Met Sally," and "Transformers."

Ford ended his tenure as chairman of the Gerald R. Ford Presidential Foundation in 2014 (though he remains on the board of trustees), but continues to honor the legacy of his father's administration, speaking at town-hall events and lectures around the country. His most requested talks are: "Inside the White House and Hollywood," and "Getting to the top with character."

He never married. 



Susan Ford Bales worked as a photojournalist for high-profile publications.

Daughter of Gerald and Betty Ford

President Ford's only daughter, Susan Ford, took up photography under the mentorship of White House photographer David Kennerly. She went on to become a photojournalist for news outlets, including the Associated Press and Newsweek.

Ford, 61, also launched National Breast Cancer Awareness Month in conjunction with her mother, and succeeded her mother as chairwoman of the Betty Ford Center. She has also been calling for better efforts to identify causes and cures to heart disease, after suffering a sudden cardiac arrest herself in 2013.

She married Charles Vance, one of her father's former secret service agents, and they had two children before divorcing in 1988. She's now married to attorney Vaden Bales.



Jack Carter ran for a Nevada seat in the US Senate.

Son of Jimmy and Rosalynn Carter

John William "Jack" Carter ran for the first major office the Carter family has sought since 1980. He sealed the Democratic nomination for a US Senate seat in Nevada, but was unsuccessful against an incumbent Republican senator in the 2006 election.

Jack, 71, spent most of his career in the investment and finance industry. He has been married twice and has two children.



Chip Carter lays low while his son carries on the political torch.

Son of Jimmy and Rosalynn Carter

Not much is known about what James Earl "Chip" Carter III, 69, is up to these days. He participated in the Democratic National Committee, served as a member of Plains City Council, and between 1995 and 2004 worked as vice president, then president and CEO, at a not-for-profit that organized international exchanges for adult home stays.

He married three times and has a son and a daughter.

His son — the grandson of President Carter — James Carter IV made headlines during the 2012 presidential election, after he helped unearth the infamous "47%" video that ostracized nominee Mitt Romney. James Carter IV later received a thank-you note from former President Barack Obama.



Jeff Carter launched a computer-electronics company.

Son of Jimmy and Rosalynn Carter

Donnel Jeffrey "Jeff" Carter, 67, co-founded Computer Mapping Consultants, a firm that became a consultancy for the World Bank in 1978 and held foreign government contracts.

Jeff married Annette Carter, and they had three children together. In 2018, his 28-year-old son Jeremy died from a suspected heart attack.



Amy Lynn Carter illustrated a children's book that her father wrote.

Daughter of Jimmy and Rosalynn Carter

Amy Lynn Carter Wentzel, 51, became a political activist in the '80s and '90s — and was even arrested at a CIA recruitment protest. She later received a master's degree from Tulane in art history and started a family in the Atlanta area with computer consultant James Wentzel. At her wedding ceremony she was not given away, saying she did not belong to anyone. She had one child with Wentzel, before later remarrying and having a second son.

Amy worked with her dad on "The Little Baby Snoogle-Fleejer," which President Carter wrote and she illustrated. The children's book is about a boy who befriends a monster.



Michael Reagan became a highly successful radio talk-show host.

Son of Ronald Reagan and Jane Wyman

Michael Reagan was adopted by the actor-turned-president and his first wife, Jane Wyman, just three years before the couple divorced. He is the last living child of this marriage.

After a stint working in aerospace, the powerboat-racing enthusiast found his niche as a political radio talk-show host. He hosted the show for over 26 years. In his retirement, Michael writes op-ed articles, contributes to Newsmax Media, and serves as president of The Reagan Legacy Foundation.

Michael, 74, has been married twice, and has two children.

 



Patti Davis is the author of multiple fiction and nonfiction novels.

Daughter of Ronald and Nancy Reagan

The first child of Ronald Reagan's marriage to Nancy, Patti Davis, 66, overcame a number of personal obstacles, including drug addiction, self-harm, and an eating disorder, and discovered her voice through her writing. She has published more than half a dozen works.

She blogs regularly on her website and in 2017, her editorial on her father's shooter went viral. In 2019, she said her father would be "horrified" about democracy during the era of President Donald Trump.

Patti married Paul Grilley in 1984. They divorced in 1990 and had no children.



Ron Reagan provides political analysis as an MSNBC contributor.

Son of Ronald and Nancy Reagan

Ron Reagan, 61, tried his hand at a number of careers, including ballet dancing, before arriving in journalism and joining MSNBC as a political analysis contributor. He has expressed strong opposition to Trump.

Ron only ever knew his father as a politician, but unlike his father has very liberal political views. The "unabashed atheist" recorded a comical PSA for the Freedom From Religion Foundation, which ran during Comedy Central's "The Daily Show" and "The Colbert Report" in 2014.

He married Doria Palmieri, a clinical psychologist, in 1980. She died in 2014.



George W. Bush served as president from 2001 to 2009.

Son of George H.W. and Barbara Bush

George W. Bush served as the 43rd president at the start of the war in Iraq.

The eldest son of President George H.W. Bush, he was criticized for his handling of the "War on Terror," Hurricane Katrina, and other challenges. Since his presidency, he has avoided the political limelight and grown more liked.

In 2019, he called for the end of the partial government shutdown on Instagram, with a photo featuring him and his wife Laura Bush handing pizza over to their Secret Service detail, who were working without pay.

Today the 72-year-old is enjoying retirement as a grandpa and an artist. He has two daughters and will welcome in a third grandchild in 2019.



John E. "Jeb" Bush is a non-resident professor at the University of Pennsylvania.

Son of George H.W. and Barbara Bush

Jeb Bush carved himself a place in politics as the former governor of Florida, along with an unsuccessful run for the White House in 2015.

The Florida resident transitioned from corporate life to public office in the '80s — first as the chairman of the Dade County Republican Party and then as the governor of the Sunshine State. During his presidential campaign, he released 33 years of tax returns — the most ever made public by a presidential candidate — as a sign to voters that he values transparency.

Since his presidential run, the 66-year-old has been spending time teaching, first as a visiting fellow at the Harvard Kennedy School, then teaching a class at at Texas A&M before being named presidential professor of practice at the University of Pennsylvania.

In 1974, he married Columba Garnica Gallo and they have three children.



Neil Bush is a director of the Bush School of Government and Public Service at Texas A&M.

Son of George H. W. and Barbara Bush

Neil Bush works as a director of Texas A&M's Bush School of Government and Public Service and as chair of the board of directors at Points of Light, the philanthropic group his father founded.

A businessman and active philanthropist, Bush, 64, also founded educational software company Ignite! Learning in 1999 after struggling with dyslexia as a child.

Neil married Sharon Bush and they had three children. In 2003, they divorced and he married Maria Andrews in 2004.



Marvin Bush is a managing partner at an investment firm in Washington, D.C.

Son of George H. W. and Barbara Bush

At 62, Marvin Bush is 41's youngest son. He's the cofounder and managing partner at Washington, D.C.-based investment firm Winston Partners.

Marvin made headlines during the 2016 presidential election when he endorsed Libertarian candidate Gary Johnson over Trump, following his brother Jeb's exit from the race.

He married Margaret Conway in 1981 and they adopted two children.



Dorothy Bush Koch authored a book about her experience as a first kid.

Daughter of George H.W. and Barbara Bush

Dorothy Bush Koch, who goes by "Doro," is the former president's youngest child and only living daughter. She is involved in a number of charities and philanthropies, and serves as the honorary co-chair of The Barbara Bush Foundation for Family Literacy.

Doro, 59, is the author of "My Father, My President: A Personal Account of the Life of George H. W. Bush," a memoir of her life as the 41st president's daughter. She also helped found a wellness company that educates people about mindfulness and holistic living.

She and her husband Robert P. Koch live in Maryland, and have four children. Two of the kids are from her first marriage with William Heekin LeBlond.



Chelsea Clinton serves as vice chair of the Clinton Foundation.

Daughter of Bill and Hillary Clinton

While her mother Hillary lost the presidency to Trump, Chelsea, 39, said a future for her in politics was a "definite maybe". She's currently vice chair of the Clinton Foundation, where she champions the group's advocacy work in global health and childhood obesity. The Stanford grad previously worked as a special correspondent for NBC News.

Chelsea has written five children's books, and she's active on Twitter discussing issues facing families, public health, and dealing with bullies. In 2019, her and husband Marc Mezvinsky announced they were expecting their third baby, a sibling to daughter Charlotte and son Aiden.



Barbara Pierce Bush is the CEO of an international healthcare equality nonprofit.

Daughter of George W. and Laura Bush

Within five years of graduating from Yale, Barbara Pierce Bush cofounded Global Health Corps, a nonprofit that recruits young professionals to fight for better access to healthcare around the world. Before that she worked at a children's hospital in South Africa and interned for UNICEF in Botswana.

She was a noted Hillary Clinton supporter during the 2016 election. In 2017, she and her sister Jenna Hager Bush released a book they wrote called "Sisters First" about growing up in a political dynasty.

In 2018, Barbara married screenwriter Craig Coyne at the Bush family's Walker Point compound in Maine.



Jenna Bush Hager is a host for NBC's "Today" show.

Daughter of George W. and Laura Bush

The younger of the Bushes' twin daughters, Jenna Bush Hager was announced as the new host for the 10 o'clock hour of the "Today" show in 2019. At the same time, she and her husband Henry announced they were expecting their third child.

Since taking over "Today" she has begun a monthly book club that's been so successful it prompted Entertainment Weekly to dub her the new "book club queen". She also serves as a board member on the Greenwich International Film Festival.

 



Malia Obama is studying at Harvard, just like her dad.

Daughter of Barack and Michelle Obama

Malia Obama is studying at Harvard University. She departed the White House in 2016 as a fashion icon and still makes headlines for her chic style.

In 2014, she interned on canceled CBS series "Extant," and in 2015, she spent the summer interning on Lena Dunham's HBO series "Girls." After finishing high school at Sidwell Friends School she took a gap year, where she interned at major film studio The Weinstein Company.

Malia turns 21 on the Fourth of July.



Sasha Obama just turned 18.

Daughter of Barack and Michelle Obama

Sasha has graduated from high school, and is reportedly heading to the University of Michigan. Before that though, she and the rest of the family flew to the South of France for a family vacation.

In 2016 she learned all about earning money, working in the takeout window at Nancy's, a seafood restaurant on Martha's Vineyard, with six secret service agents in tow. Her and her sister's reaction to meeting "Deadpool" star Ryan Reynolds also went viral in 2016.



Donald Trump Jr. likes to hunt, fish, and run the Trump Organization.

Donald Trump Jr., 41, has done his father proud rising to be executive vice president for the Trump organization, focusing on expanding the commercial and real estate side of the business, as well as previously appearing on "The Apprentice".

He played a key role in his father's election campaign, making $50,000 speeches on his behalf. He's also been criticized for the way he uses social media. And DJTJ famously met with a Russian lawyer at Trump Tower in June 2016 to get "dirt" on Clinton.

Donald Jr. likes to spend his weekends hunting and fishing or in the Catskills with his five children. He and his ex-wife Vanessa finalized their divorce in February, and he's been dating former Fox News host Kimberly Guilfoyle since spring 2018. He and Guilfoyle are on the campaign rounds for Trump's reelection.



Ivanka Trump is an official advisor for the President.

Ivanka Trump, 37, considered the president's favorite child, has been an adviser to her father since early 2017. In 2018 she was criticized for using a personal account to send hundreds of government related emails.

Before that she worked at the Trump Organization with her brothers, but resigned to avoid any conflicts of interest. She also had her own Ivanka Trump fashion brand, which she shut down in July 2018.

In her early life she modeled for brands like Tommy Hilfiger and Versace. She later appeared on "The Apprentice" as well as appearing on an episode of "Gossip Girl".

She is married to real estate developer Jared Kushner, who also works with her at the White House. They have three young children.



Eric Trump started a charitable foundation.

Eric Trump, 35, like his older brother Donald Jr., is an executive vice president at the family business, has appeared on "The Apprentice", and also enjoys hunting. He has been criticized for hunting animals in Zimbabwe.

In 2007, Eric created a charitable foundation to raise money for St Jude Children's Research hospital in Tennessee, but later stopped fundraising to avoid confusion around donations in the wake of his father's run to be president. In 2017, the foundation came under fire when a Forbes report alleged that thousands in donations were funneled to the Trump Organization.

In 2014, he married Lara Lea Yunaska. They're expecting their second child.



Tiffany Trump is studying law in Washington.

Tiffany Trump, 25, is the only daughter from the president's second marriage to television personality Marla Maples. She studies law at Georgetown University after graduating from the University of Pennsylvania in 2016.

When she was 14 she released a single called "Like A Bird" , and said she was considering becoming a professional singer on "The Oprah Winfrey Show." She was later profiled as one of the "Rich Kids of Instagram" and has 1 million followers on the social network.



Barron Trump brought his class to meet his dad at the White House on a field trip.

Son of Melania and Donald Trump

Barron Trump, 13, relocated to the White House after living at Trump Tower in Manhattan when his dad took office to finish out the school year. He is the first boy to live in the White House since John F. Kennedy Jr.

Barron is attending St. Andrew's Episcopal School in Maryland, where tuition costs about $40,000 a year.

In May 2017, he took his classmates to meet his dad at the White House.



How I've managed to keep my rent (relatively) affordable for 14 years in Los Angeles, one of the most expensive housing markets in the US

Wed, 07/03/2019 - 3:00pm  |  Clusterstock

  • I've lived in Los Angeles for 14 years and managed to keep my rent affordable by paying no more than one-third of my take-home pay.
  • One way I did that was by choosing areas that are rent-controlled and relatively more affordable.
  • I've also downsized to save on housing costs, and written a letter to my landlord after I proved myself to be a good tenant, asking for a freeze on my rent.
  • Visit Business Insider's homepage for more stories.

It's no surprise that living in Los Angeles isn't cheap. In fact, a recent report reveals that Los Angeles is the third most rent-burdened city in the U.S. However, there are ways to keep your rent relatively affordable.

Of the three places I lived on my own in Los Angeles — a studio in West LA (2005 to 2010), a one-bedroom bungalow in West LA (2010 to 2018), and a one-bedroom cabin near Pasadena (2018 to the present) — my rent was never more than one-third of my take-home pay.

Here's how I was able to keep my housing costs relatively affordable:

Live in less-expensive parts of town

In December 2005, after six months of landing my first "real," full-time job for a small publishing company, I moved into a tiny studio apartment. It resembled a long closet and cost $675 a month. And my one-bedroom bungalow, a couple blocks over, was $895 a month when I moved in the summer of 2010.

I chose Palms partly because it was near my work and close to my boyfriend's apartment at the time, which was in Santa Monica. But the real kicker was that the housing was far less expensive than in adjacent areas. Palms, while has become more gentrified in recent years, is known to be populated by college students and young families that are just starting out.

Look for rent-stabilized buildings

Both my studio and one-bedroom apartment were under rent stabilization ordinances. In the City of Los Angeles, rent stabilization applies to rental properties that were built on of before October 1, 1978. If that's the case, the maximum your rent can increase is 3% every 12 months.

Check if your city has rent stabilization ordinances, and if it applies to a particular rental property. That could prevent your landlord from increasing your rent substantially in a given year.

Write a letter to the landlord

When I was in my studio apartment, I wrote a letter to my landlord stating that I received a small raise that barely covered the rising cost of living due to inflation. I pointed out in the four years I lived there, I was a non-rowdy tenant who was never once late on paying her rent. My landlord agreed to a temporary hold on increasing my rent. In the five years I lived there, my rent increased from $675 to $790 a month.

Downsize to a smaller apartment

In the summer of 2018, I received notice that the one-bedroom apartment I had been living in for eight years was sold and I was given four months to relocate.

At the time, I was paying a little under $1,100 for my 500-square-foot apartment. It had been eight years since I entered the housing market in Los Angeles. I found that it would cost me roughly double to rent a similar apartment in the same area. And for the same price of what I was currently paying, I would need to get a roommate.

After frantically searching for a few months, I decided to move a little east. I landed on a tiny cabin in the canyon area just east of Pasadena. While technically in Los Angeles county, I would be moving to the San Gabriel Valley.

The kicker? I would be spending a few hundred dollars more, but would be downsizing from 500 square-feet to a hair over 300-square-feet. However, it came with a small yard. Not only would I be saving on rent, but I wouldn't need to purchase more furniture, and my utility bills would be less expensive.

To own a home or not

Is homeownership in my cards? That's a big maybe. I partly chose to move to a smaller place outside of Los Angeles proper so I could save in general, and possibly for a house down the line. The median cost of a home in Los Angeles is $600,000, which is on the higher end of what I can afford.

What's more, being single and living on variable income as a freelance writer makes it feel more scary to commit to a 30-year mortgage. Talking to fellow self-employed freelancers who bought homes, I know that the process to applying for a mortgage typically requires more paperwork, as lenders want to make sure you have enough income to make your payments.

While I'm not living in the lap of luxury, keeping my housing costs low has afforded me freedom from stress and the ability to put money toward savings. While rent in Los Angeles is more than most places in the US, I've found there are ways to keep your housing costs lower than the average. It can take a bit of planning, research, and willingness to make a few trade-offs.

Join the conversation about this story »

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WeWork isn't even close to being profitable — it loses $219,000 every hour of every day

Wed, 07/03/2019 - 2:52pm  |  Clusterstock

  • WeWork, the coworking-space company, is valued at $47 billion, but it's hemorrhaging money.
  • WeWork is losing $219,000 hourly. In 2018, the company's losses and revenues both doubled, to $1.9 billion and $1.8 billion, respectively.
  • As WeWork moves toward an initial public offering, it will need to convince investors that it's a worthwhile long-term investment and can survive an economic downturn despite its losses.
  • Visit Business Insider's homepage for more stories.

WeWork, the 9-year-old coworking startup now operating under the We Company umbrella of companies, may have a whopping $47 billion valuation, but it's hemorrhaging money: $219,000 every hour of every day during the 12 months leading up to March, according to the Financial Times.

In 2018, WeWork's losses and revenue both doubled, to $1.9 billion and $1.8 billion, respectively, according to FT. Though the company in March projected $3 billion in revenue in the next year, it lost $700 million in the first quarter of 2019.

In April, CEO Adam Neumann announced WeWork confidentially filed initial-public-offering paperwork in December as the We Company, which also includes Neumann's coliving venture, WeLive, and the "conscious entrepreneurial school" WeGrow. As the company moves toward an IPO, it will need to convince investors that its significant growth makes it a worthwhile long-term investment despite equally large losses. 

SoftBank CEO Masayoshi Son is the major investor in WeWork and a mentor to Neumann (his wife, Rebekah, refers to Son as "Yoda"). Son has invested more than $10 billion in WeWork. In December, Softbank was expected to invest $16 billion in WeWork but ended up investing only $6 billion, with $1 billion of that going toward existing shares, prompting renewed scrutiny of its business model.

Uncertainty about WeWork can be boiled down to three concerns: the stability of its model (pairing long-term office leases with short-term occupants and what that might look like during a recession), its categorization (Should WeWork be compared against tech companies or real-estate companies?), and the wild card that is Neumann.

New York magazine's Intelligencer published a profile of Neumann in June, depicting the CEO as zany and idealistic. Neumann forbid employees from expensing meals containing meat last summer. His commencement speech at Baruch College in 2017 recounted his early years in New York City, which he spent clubbing and "hitting on every girl in the city."

When asked about his personal superpower, Neumann brought up a character from the TV show Heroes ("Neumann neglected to mention that this was the show's villain: a serial killer who murdered people to get their powers," Reeves Wiedeman wrote for New York magazine.)

A surfing fan, he has seemingly blurred the lines between his personal interests and WeWork's, investing on behalf of the company in a wave-pool startup called WaveGarden and the big-wave surfer Laird Hamilton's so-called superfood startup, which sells things like "performance mushrooms," powdered coconut water infused with beets and turmeric, and highly caffeinated coffee.

And yet, Neumann's ambition and salesmanship are the forces that have skyrocketed his company to a nearly $50 billion valuation in under a decade. 

"There are hundreds of co-working companies around the world, but what has long distinguished WeWork is Neumann's insistence that his is something bigger," Wiedeman wrote.

According to WeWork's website, the company has 743 coworking sites open and coming soon in 124 cities in more than 36 countries. FT reported that WeWork has 485 offices and was in 105 cities as of the first quarter of 2019; New York magazine reported that the company has 12,000 employees. WeWork is the largest private office tenant in Manhattan.

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An NYC broker who represents multimillion-dollar clients says people have a common misconception about why their homes aren't selling — and correcting them is one of the most difficult parts of her job

Wed, 07/03/2019 - 2:48pm  |  Clusterstock

Working in the real-estate industry can have its ups and downs. 

Business Insider spoke with top Manhattan real-estate broker Lisa K. Lippman to get her take on the biggest challenges of the job. 

Lippman is a broker at the luxury real-estate firm Brown Harris Stevens, where she was the No. 1 broker in 2016, 2017, and 2018. In the past four years, she has sold over $1 billion worth of real estate and was named the No.4 broker in Manhattan by The Wall Street Journal in 2016. 

Read more: 17 real-estate agents reveal the worst parts of their jobs

And while Lippman represents multimillion-dollar clients across Manhattan, her days are far from smooth. Here's what she considers to be the biggest challenges of the job: 

Explaining to sellers that they may lose money

Lippman told Business Insider that since the luxury market is no longer a seller's market, a lot of sellers have to come to terms with the fact that their properties are no longer valued at the same prices they were a few years ago. 

"In this market, the biggest challenge is explaining to sellers that they may lose money on their property or at the very least make a lot less than they imagined a few years ago," Lippman told Business Insider in an email.

Convincing clients that marketing isn't the problem

Lippman says that when dealing with a property that isn't selling, clients often blame the agent's marketing efforts. However, Lippman explained it has nothing to do with marketing and everything to do with the property being overpriced. 

"The truth is, that if a property is marketed with great photographs, a clear floorplan, is on all the major websites, and the listing broker does broker open houses and e-blasts, and still no one calls to see it, or not enough people do, then the listing is overpriced," Lippman told Business Insider. "No amount of marketing will coax buyers in to see a property they deem overpriced. Sellers can get very frustrated by this."

There is just too much inventory

Lippman explained that if and when a property gets an offer, sellers have to act fast or the buyer will move on to another option. In order to prevent losing a potential buyer, sellers have to engage — as long as the offer is reasonable. 

"It's often hard to explain to a seller that their property does not have the same cache as before, or at least that people have so many second and third choices!" Lippman told Business Insider. 

Read more: An NYC broker who has sold over $1 billion of luxury real estate in the past 4 years and works 16-hour days says she uses 3 simple tricks to stay organized

The challenges Lippman lists are just a few of the many real-estate agents face on a daily basis. Business Insider's Katie Warren previously reported that many real-estate agents say that managing clients' unrealistic expectations can be the hardest part of the job.

Other challenges real estate agents struggle with are having to be available 24/7, dealing with endless emails, having mistrustful clients, and inconsistent income.

SEE ALSO: An NYC broker who has sold over $1 billion of luxury real-estate says her wealthy clients are used to first-class travel service — and it's impacting which amenities they look for in their homes

DON'T MISS: 11 things that make a home unsellable, according to real-estate agents

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Your credit card can probably help you get cash, a replacement card, or a place to stay during an emergency abroad. Here's how it works.

Wed, 07/03/2019 - 2:14pm  |  Clusterstock

When you're traveling abroad, there are two cardinal rules: Never run out of cash, and whatever you do, don't lose your passport.

But things happen. Whether you lost your wallet in a piranha-infested river while getting into a dugout canoe or had your purse stolen from a hotel room, suddenly being in a foreign country without cash is a scary situation that could happen to anyone.

Fortunately, Visa, Mastercard, and American Express have you covered. They all offer a surprisingly rich set of benefits to assist stranded travelers. It's better to avoid needing these services, though, so this guide will also help you prepare for the unexpected.

Confirm information on file before you go

Before you travel, call your banks to notify them that you're doing so, and in which countries you plan to use the cards. This allows them to update their records so that your purchases aren't incorrectly flagged as fraudulent. It also allows you to verify the information they have on file for emergency cash purposes.

If you need to obtain emergency cash or a replacement card, the information you provide needs to match the bank's records exactly. You don't want to wait until you're stranded in the Seychelles to discover that your details aren't up to date with the bank.

Keep a copy of your cards

Without pulling out your wallet, can you name every card in it, along with the card numbers? If not, it's a good idea to take a picture or photocopy of all of your cards before you lose them, so if necessary, it's easier to cancel them later. While you're doing that, it's also a good idea to make a copy of your passport, consular visas, and other important travel documents.

Travel with multiple cards (with no foreign transaction fees)

The first rule of international travel is to avoid foreign transaction fees. The second rule is to expect the unexpected.

This includes your small, local credit union suddenly freaking out and shutting off your cards because there's no possible way that you could really be in Japan. Right before a long holiday weekend. Even though you've been to Japan at least once a year for the previous three years. And because it's a holiday weekend, there isn't anyone around to turn your card back on. NOT THAT THIS HAS NEVER HAPPENED TO ME (and I definitely didn't spend four days in Tokyo visiting only free places to which I could walk, and eating only vending machine food).

Even if you carry a really great debit card, like my favorite ATM-fee reimbursing Charles Schwab debit card, it's still a good idea to have more than one bank account (with different banks) and different ATM cards. And, of course, more than one credit card, of more than one type. Don't just bring two Visa cards; bring a Visa, a Mastercard and/or an American Express card. That way, in an emergency, you have multiple ways to get help.

Reduce your attack surface

In some cases, it's unavoidable: You're in transit, and at your most vulnerable. However, once you are established, it's a good idea to leave most of your cards in a secure location (such as in the hotel safe at the front desk) and take only "walking around money" with you when you leave. This can make all the difference between a minor hassle and a major problem.

When you're carrying everything, and at your most vulnerable, it's best to distribute your money and cards in multiple locations. That way if some of your valuables are lost or stolen, you won't lose all of them.

Emergency cash vs emergency assistance vs replacement cards

Getting help from your credit card companies should be viewed as an emergency service, not a cheap service. It's there if you need it, and generally very good, but it's better to avoid needing it in the first place.

Visa, Mastercard, and American Express all offer a concierge for Emergency Assistance. The specific services available will depend upon your card (the more premium your card, the more services are offered). However, the basics needed by most stranded travelers are covered by every card product: food, shelter, emergency transportation and emergency medical care. All three card companies can assist you in arranging these, which will be charged as purchases to your account.

The good news is, Emergency Assistance services can really come through in a pinch. Service providers who work with credit card companies are used to dealing with stranded travelers.

Better yet, the credit card companies don't charge to provide emergency assistance to stranded travelers; these services are just part of the benefit of carrying the card. The bad news is that credit card providers are most focused on convenience, acceptance of their card product as payment, and the ability to do business in the English language. This means that the pricing isn't always as cheap as you could otherwise find online and you'll be limited in your selection. And, since these services are subject to your credit limit, it's best to carry multiple cards to ensure sufficient funds.

Emergency cash is a service you can request through the concierge. If you ask for emergency cash, your credit card company can send you a wire via Western Union, MoneyGram, or similar. While you can pick up cash in local currency, and in as little as two hours, this service is not cheap! You'll be charged for a cash advance plus wire transfer fees plus foreign transaction fees billed by the wire service (these are significant in the case of Western Union and MoneyGram).

Additionally, it's harder to get banks to approve this service than other emergency services because cash is a higher risk to them. This service is subject to your credit card's cash advance limit, and may be subject to additional limitations.

Emergency card replacement is exactly what it sounds like: Usually within 48 hours, a new card will be delivered via express courier to your hotel or guest house. While you generally won't be charged for the card replacement service, you'll often be billed about $50 for shipping.

For example, suppose you were expertly pickpocketed on the train, and you're now stranded in a strange city with no wallet or money. One call to the concierge, and your credit card company comes to the rescue! You're put up in a 4-star hotel with a restaurant and gift shop, both of which allow you to charge purchases to your room. They'll send a car to pick you up, billed to your room of course. You'll have everything you need, but it won't be cheap — it's all conveniently billed to your credit card account. Your bank wouldn't approve emergency cash (only emergency purchases), but 48 hours later, a replacement card shows up, along with a $50 shipping charge for each. It was a lot more expensive than you planned, but your vacation wasn't ruined, and the experience will be something to laugh about later.

How to get help

The following are phone numbers that you can call to get help:

  • Visa: 1-800-VISA-911 (1-800-847-2911)
  • Mastercard: 1-800-MCASSIST (1-800-622-7747)
  • American Express: For replacement cards, call 1-800-964-8542. For Global Assist, which can help with emergency cash, you can call 1-800-554-2639

You might notice that these numbers are all US toll-free numbers. These are not reachable when calling from outside the US, but there's a workaround: Skype! You can use Skype to call US toll-free numbers at no charge, even when calling from overseas. Note that the phone robots can be very frustrating to use with Skype, so it's best to just dial 0 until you get a human.

Visa, Mastercard, and American Express also offer local numbers in many countries around the world. It isn't a bad idea to call in advance to ask for the local phone number in the country (or countries) where you'll be traveling. That way, you can call from a local phone for help.

Despite the advertising, don't expect your bank to show up in a helicopter ready to save the day. Instead, expect them to provide a limited set of services designed for stranded travelers or those with medical needs. They'll be executed relatively well, but they won't be cheap!

Find the right credit card for your needs, travel or otherwise, with CreditCards.com's free CardMatch tool »

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Boeing just announced $100 million for families of 737 Max crash victims. It likely won't be enough. (BA)

Wed, 07/03/2019 - 1:39pm  |  Clusterstock

  • Boeing announced a $100 million fund for families of 737 Max crash victims.
  • According to Boeing, the funds will "address family and community needs of those affected by the tragic accidents of Lion Air Flight 610 and Ethiopian Airlines Flight 302."
  • However, a lawyer for 23 victims' families says that the announcement is going over poorly.
  • Visit Business Insider's homepage for more stories.

Boeing on Wednesday announced that it had set aside $100 million in funds for the families of victims of the two 737 Max crashes.

According to Boeing's press release, the funds will "address family and community needs of those affected by the tragic accidents of Lion Air Flight 610 and Ethiopian Airlines Flight 302."

Boeing said "These funds will support education, hardship and living expenses for impacted families, community programs, and economic development in impacted communities. Boeing will partner with local governments and non-profit organizations to address these needs. This initial investment will be made over multiple years."

However, Robert Clifford, a lawyer who is representing the families of 23 victims on the Ethiopian Airlines crash, told Business Insider that the announcement is not going over well with the families he's spoken with.

"At best it's a gesture, at worst it's a token effort to address problems that aren't foremost on the minds of these families," he said. "What's foremost on their minds is getting back remains from the crash site, so they can hold memorials and get some closure — why isn't Boeing putting that money towards speeding up the process?"

Read more: American Airlines is suspending its first route because of the 737 Max grounding

Boeing faces numerous lawsuits and investigations in the aftermath of the two crashes of the new model aircraft — one in Indonesia in October, 2018, and one in Ethiopia in March of this year.

The planemaker sent this statement to Business Insider:

"The pledge is independent of the lawsuits filed by the families and loved ones of those onboard Ethiopian Airlines Flight 302 and Lion Air Flight 610. We've been assessing a variety of ways to assist the families and communities impacted and determined that this is a constructive step that we can take now. As the investigations continue, Boeing is cooperating fully with the investigating authorities. We won't comment on individual lawsuits directly."

Following the second crash, aviation authorities worldwide grounded all various of the 737 Max due to safety concerns with the Maneuvering Characteristics Augmentation System (MCAS) Boeing designed for the aircraft to compensate for larger engines than previous iterations of the 737.

Lawsuits have been filed by families in several countries, including the US, Indonesia, Kenya, France, and Ethiopia. One widow from France is suing Boeing for $276 million — one day of earnings for the company in 2018.

More than 400 pilots are also suing Boeing over missed wages as the plane remains grounded, while airlines with the grounded aircraft in their fleets are also seeking compensation.

Another criticism: the lack of any details in the announcement.

"What does Boeing mean when they say they're going to 'give money to communities,'" Clifford said. "Are these funds advancements? Who's an eligible claimant? What's the process? What counts as 'education?' The announcement creates more questions than it provides answers."

SEE ALSO: Here are all the investigations and lawsuits that Boeing and the FAA are facing after the 737 Max crashes killed almost 350 people

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The 6 winners and losers at the summer box office so far

Wed, 07/03/2019 - 1:39pm  |  Clusterstock

Coming off a record-breaking 2018 at the box office, which was fueled by a summer season where every title didn't just do incredible business at the multiplex but often times surpassed industry expectations, many in Hollywood looked at the summer 2019 slate and saw dollar signs. 

"Avengers: Endgame," "Aladdin," and a slew of sequels from X-Men to Godzilla. Heck, this year's summer season could be bigger than 2018!

Everyone has come back to Earth. 

Outside of "Endgame," a few other Disney releases, and "John Wick: Chapter 3 - Parabellum," there hasn't been much motivation to go to the theaters this summer. There were sequels from stale franchises like "Godzilla: King of the Monsters," "Men In Black: International," and the final X-Men release for Fox, "Dark Phoenix." And offerings from the independent film space, like "Booksmart" and "Late Night," also were busts. It has all led to a 7% drop in ticket sales compared to last summer, according to Comscore.

Though there may be brighter days ahead — as "Spider-Man: Far From Home" looks to do big business over the long 4th of July holiday weekend, and titles like "The Lion King," Quentin Tarantino's "Once Upon a Time in Hollywood," and "Fast & Furious Presents: Hobbs & Shaw" coming out in the coming weeks — so far the 2019 summer season has been a big letdown. 

Here's a breakdown of the six big winners and losers of the summer box office so far:

SEE ALSO: 4 alternatives to MoviePass to consider if you're looking for a new movie-theater subscription service

Winner: "John Wick: Chapter 3 - Parabellum"

The third movie in the Keanu Reeves franchise proved that it isn't going away anytime soon and it can go up against any other franchise. 

The movie, made for $75 million, came on the scene in the middle of May, and with a $56.8 million opening weekend, dethroned "Avengers: Endgame," which had been at the top of the domestic box office for the previous three weeks. Since then, "Parabellum" has been in the top 10 at the US box office and worldwide has earned over $300 million. Neither of the previous titles in the franchise broke $200 million worldwide. 

Lionsgate has announced that "Chapter 4" is in the works. 



Loser: Indie Movies

What this summer has proven is that audiences are only going to the movies that are sure things. And that has hurt the independent film space. 

Annapurna Pictures decided to go against the grain and release its coming-of-age tale "Booksmart" on 2,500 screens. Hoping that its close to 100% Rotten Tomatoes score and feel-good backstory of an all-female creative team would cause the movie to be the must-see title of the summer. Sadly, that didn't happen. The movie had a $7 million opening, and since its May 24 release has only earned $21 million.

For "Late Night," Amazon Studios went with the usual playbook for an indie, doing a small limited release and then go wide. But the Mindy Kaling-scripted/starring Sundance fest darling that Amazon paid $13 million for US rights didn't do any better than "Booksmart." It brought in $246,000 on four theaters in its limited release and then only brought in $5.2 million when it went wide on 2,200 screens. To date, it has only earned $13 million domestically



Winner: Disney

There are three things you can't avoid in this world: Death, taxes, and Disney's hold on the box office.

The studio has been the life blood for the movie theater business in the past, but this year it is literally carrying the biz on its back. Disney has the top four highest-grossing movies of the year, domestically (three of them — "Endgame," "Aladdin," and "Toy Story 4" — are summer releases) and an incredible 36% of the domestic market share

The studio kicked off the summer with "Avengers: Endgame" and broke numerous box office records in the process. Even Aladdin, a movie that didn't work for critics (56% on Rotten Tomatoes), made over $800 million worldwide. And Disney isn't done — it still has the live-action remake of "The Lion King" coming out before the summer ends.



Loser: Lame Sequels

Sequels have been a hallmark of the summer movie season. In some years, like 2018, they generate major coin ("Jurassic World: Fallen Kingdom," "Mission: Impossible - Fallout"), while in others, like this one, they just stink

From "Men In Black: International" to "Shaft," studios aren't just putting out bad sequels this summer, but sequels to IPs that have been dormant for years. Sorry, but I don't know anyone who has been asking for another "Shaft" movie since the last one was in theaters 19(!) years ago.

Some were calculated gambles. Warner Bros.' "Godzilla: King of the Monsters" is part of the studios' MonsterVerse and will next face off against King Kong in "Godzilla vs. Kong" in 2020, s o Warner Bros. had to release the movie and keep its fingers crossed. Disney had its hands tied with "Dark Phoenix;" when the studio bought Fox, the X-Men title came with it. Its poor performance just confirms that Disney has to press pause and figure out how to fit the mutants into the Marvel Cinematic Universe. 

For moviegoers, all these bad movies let them ditch theaters and stay on their couches watching their favorite streaming services. 



Winner: Streaming

Want to know how lame the summer movie season has been? According to Netflix, nearly 31 million accounts watched Adam Sandler's new movie ("Murder Mystery") the weekend it launched on its service in mid June.

Streaming continues to fill the void when going to the movies isn't worth it. And streaming's role is only going to increase with the launch of services like Disney Plus, Apple TV Plus, and others coming soon from WarnerMedia and Comcast.



Loser: Movie Theaters

Though theaters were riding high at the beginning of the season with the incredible business "Endgame" gave movie chains, things have slowed. In fact, the box office is down 10% compared to this time last year, according to Comscore. 

The big three — AMC, Regal, and Cinemark — can sustain the roller-coaster ride that is exhibition, but smaller chains can't. Dull titles keep people home and have movies playing to barely full theaters, which is death for an exhibitor. The only solace is that help (hopefully) is on the way. 

After the summer, there are still big titles on the way, like "It: Chapter 2," "Joker," "Gemini Man," "Jumani: The Next Level," and "Star Wars: The Rise of Skywalker." 

It's still possible that 2019 could be a big year for the movies.



Dispensed: A trial date for Elizabeth Holmes, new management at uBiome, and the primary care trends we're tracking

Wed, 07/03/2019 - 1:38pm  |  Clusterstock

Hello,

It seems like only a few short days ago that I was in your inbox filling you in on upcoming digital health IPOs, and the AbbVie-Allergan megamerger. And that's because it was!

Thanks to the holiday, I figured I'd slot this week's Dispensed, our weekly healthcare newsletter, into your inbox while folks are still around (I, myself, plan to take advantage of the four-day weekend). 

There's a surprising amount of news to get into in this abbreviated newsletter so let's dive right in.

But first: New to our newsletter? You can sign up for Dispensed here.

Late Friday afternoon, we caught wind that Theranos founder Elizabeth Holmes and ex-president Sunny Balwani have had their trial dates set. Jury selection is slated to begin the week of July 28, 2020, with opening statements beginning August 4.

Before the weekend was out, Erin Brodwin and I nailed down a scoop on the latest development in the uBiome saga.

Cofounders Jessica Richman and Zachary Apte have left the board, and interim CEO John Rakow departed the company. In their place, the board's installing two new board members and put in place an executive team that specializes in turnarounds. 

All of uBiome's top execs are out at the embattled poop-testing startup that's at the center of an FBI investigation
  • All three top leaders at microbiome-testing startup uBiome have left their posts, according to an internal memo obtained by Business Insider on Sunday.
  • Three new people will now serve as uBiome's interim CEO, CFO, and chief operating officer, according to the memo: Curtis Solsvig, Robin Chiu, and Karthik Bhavaraju.

Relatedly, Erin spoke to an entrepreneur based in Chile who says uBiome owes him nearly $600,000. Read her latest here. 

Want to catch up on all our uBiome coverage? Here's a page summing up every twist and turn so far, with likely more ahead.

Clarrie Feinstein and I went to go see the new health clinic set up on the floor of a coworking space and run by startup Eden Health. Walk by too fast and you might miss it on your way to get cold brew on tap or pop into the workout studio.

It's an interesting bet that healthcare is an amenity — one typically only available to large companies — that tenants of coworking spaces might want as well. We teamed up with our finance/real estate expert Meghan Morris to bring you some more context to the trend. 

WeWork rival Convene is betting a healthcare startup can help it win new customers by bringing office clinics to the masses
  • Convene, a WeWork rival, has partnered with the healthcare startup Eden Health to deliver primary care in its workspaces. The companies just opened their first clinic in Convene's New York offices in midtown Manhattan.
  • Eden plans to open at least 24 more health clinics in partnership with Convene over the next 18 months.
  • Convene CEO Ryan Simonetti called the partnership a means to provide quick access to healthcare and win over tenants.

Elsewhere in primary care, I spoke with two health systems — Geisinger and Intermountain — that are rethinking how they approach primary care. Instead of paying per visit, they're looking to pay per patient, per month, in the hopes that this will keep patients healthier and out of the hospital where care gets more expensive. 

Both operate their own health plans, which gives them some flexibility in finding new ways to pay for the more preventive side of medicine. 

Big hospital systems are borrowing an 80-year-old idea to keep patients healthy and cut costs, and it could be the future of healthcare
  • Major health systems are rethinking their approach to primary care.
  • The goal is to give doctors more time with patients while making them more responsible for their patients' health.
  • Rather than getting paid for each visit or procedure, health systems like Geisinger and Intermountain are working to get paid a large fixed sum each month to take care of all of a patient's health needs.

I touched on this last week, but in June I spoke onstage with health insurance startup Clover Health's CEO Vivek Garipalli. A big theme we hit on is what he's learned since venturing into the world of insurance — not an easy task. 

Clover Health set out to upend healthcare for aging Americans. 5 years and $925 million in funding later, it's proving more challenging than expected.
  • If Vivek Garipalli, CEO and founder of Clover Health, could do it over again, he's not sure he'd get into the health insurance business.
  • "If I knew then what I know now, as to how hard that would be, I can't say I would have done it again," Garipalli, who founded Clover in 2014, told Business Insider onstage at an insurance technology conference in New York.
  • Over the past five years, Clover's brought in $925 million in funding. It now covers about 40,000 members.

With that, I hope everyone has a great long weekend, or at the very least a restful Friday workday! I'll be spending the Fourth down in Virginia, where I'm really hopeful it's peach season.

Feel free to send me all your juiciest tips, gossip, or favorite summer fruit cobblers to lramsey@businessinsider.com, or find the whole team at healthcare@businessinsider.com. 

- Lydia

Join the conversation about this story »

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The world's biggest video game retailer, GameStop, is dying: Here's what led to the retail giant's slow demise (GME)

Wed, 07/03/2019 - 1:16pm  |  Clusterstock

  • GameStop is, by far, the world's largest video game retailer.
  • The company had been in steady decline for years, but the bottom has dropped out of its stock price in 2019 — from $16 a share in January to just $5 by July.
  • The company is "a melting ice cube," the Wedbush analyst Michael Pachter told Business Insider. "For sure it's going to go away eventually."
  • Here's how GameStop ended up in such dire straits.
  • Visit Business Insider's homepage for more stories.

The world's biggest video game retailer, GameStop, is in serious trouble.

In the past six months, the company's stock value has dropped by two-thirds — from about $15 in January to just $5 by July — and it reshuffled its C-suite.

Like Blockbuster Video and Tower Records before it, GameStop faces major challenges to its business model from the internet. As more people buy video games through digital storefronts, fewer buy games on physical discs from GameStop.

But that's far from the only issue with the company, which has suffered a staggering series of self-owns through poor acquisitions, half-hearted initiatives, and an inability — or unwillingness — to evolve.

SEE ALSO: GameStop crashes after the video game retailer reported another disastrous quarter, new leadership frustrates Wall Street

The problems began in 2013.

In 2013, the current console generation kicked off with the launch of both the Xbox One and the PlayStation 4.

And with those consoles, a big shift happened: Every game was available through the digital storefronts operated by Sony and Microsoft (PlayStation Network and Xbox Live, respectively).

The implications of that were huge for the world's biggest game retailer. The foundation of GameStop's business is selling video games on discs. And with the digitization of console games, the company was facing an existential threat along the lines of iTunes' impact on record stores.

"Downloads became a thing and GameStop's business declined," the Wedbush analyst Michael Pachter, who covers the video game industry, told Business Insider in an interview on Tuesday. "They were just kind of oblivious to it."

And this is how the issues really began: from GameStop's inaction.



At the same time, GameStop took a big bet on an expensive new business: Spring Mobile. Then, it doubled down on that bet.

In 2013, GameStop embarked on a new initiative: smartphone stores.

"They just kept buying chains, and they were paying top dollar," Pachter said. "And then the earnings went down as soon as they bought them."

First, there was Spring Mobile, followed by the purchase of hundreds of storefronts from AT&T. By 2016, GameStop owned and operated just shy of 1,500 mobile-phone stores under the Spring Mobile name. 

Those stores were expected to generate about $1 million apiece. And when they didn't generate that kind of money, they quickly became an expensive liability.

"It turned into a complete disaster," Pachter said. "These stores were going to do a million apiece. So with 1,500 stores you're looking for $1.5 billion in revenue and double-digit margins. So $150, $200 million profit, and I think they got to $80. They were just never even close."

Before the acquisitions, GameStop had cash in the bank and zero debt. By 2018, when Spring Mobile was sold for $700 million, the company was swimming in debt.

"I estimate they spent about $1.5 billion buying all these stores — $700 million in cash and $800 million in debt — and ended up selling for $700 million," Pachter said. 

The company "went from no debt and generating about $400 million in cash, to $800 million in debt and generating $300 million in cash," he said.



By 2018, GameStop was looking for buyers from private equity — but its suitors couldn't convince financiers that GameStop was a smart buy.

At about $16 a share in late 2018, GameStop was apparently fielding interest from private-equity groups looking to purchase the ailing retailer — but those suitors couldn't persuade banks to finance the purchase.

There are, no doubt, several reasons for this.

Pachter speculated that it's largely a measure of uncertainty about the future of game consoles. In late 2018, it wasn't clear whether the next PlayStation and Xbox consoles would even have disc drives. And if they didn't have disc drives, there would be no discs to sell — thus cutting out the core of GameStop's business.

But now, in mid-2019, we know the PlayStation 5 and the next Xbox ("Project Scarlett") will have disc drives — both Sony and Microsoft have confirmed as much.



After GameStop announced its inability to go private, its stock price fell off a cliff and is now just over $5 a share, putting GameStop's value at just over $500 million.

In the wake of GameStop's inability to sell in late 2018, the company's stock has been in free fall. From January 28 to January 29, the stock dropped from about $15 a share to about $10 a share. Another similar drop happened June 5, and the company's stock has yet to bounce back.

GameStop is now valued at $543 million, its stock price just above $5 a share. When it was up for sale in late 2018, it was asking for $16 a share. In the past six months, the company's stock has lost about $1 billion in shareholder value.

At the same time, the company's C-suite has seen a major shake-up. Its latest CEO, George Sherman, took over the company in May. Before him, Mike Mauler lasted just three months in the role.



But don't count GameStop out: With new consoles on the horizon that still play game discs, GameStop's business model isn't out the door just yet.

In 2019, you can still buy music on compact discs and movies on Blu-ray discs. You could, of course, just stream music through one of several services, or you could buy a digital version of whatever album. The same could be said for movies.

That said, the world in which Sam Goody and Tower Records did good business selling music and movies on physical media (read: discs) is long gone.

But that doesn't mean the business model is dead.

"I definitely think it's a melting ice cube," Pachter said of GameStop's disc-based business model. "For sure it's going to go away eventually. And for sure their future will be truncated and eliminated the day that discs stop being manufactured."

But that doesn't mean the disc-based business model is leaving just yet — with new consoles from Microsoft and Sony coming in 2020 that play discs, "they just got a seven-more-year reprieve starting in 2020," Pachter said. "GameStop's got about 10 years before that ice cube is fully melted."

Do you work for GameStop? Got a news tip? Get in touch with this reporter at bgilbert@businessinsider.com.



Markets Live: Wednesday, 3rd July 2019

Wed, 07/03/2019 - 6:15am  |  FT Alphaville

Live markets commentary from FT.com

Continue reading: Markets Live: Wednesday, 3rd July 2019

The Mustang and the minivan have an amazing shared history (FCAU)

Tue, 07/02/2019 - 11:04pm  |  Clusterstock

  • Lee Iacocca died on Tuesday, July 2, 2019, at age 94.
  • He is credited as the father of the Ford Mustang and for rolling out the first minivan at Chrysler, a company he saved from bankruptcy in the early 1980s.
  • Here's how the minivan came to be.
  • Visit Business Insider's homepage for more stories.

In late 1983, the first minivan rolled off out the factory at Chrysler. The Plymouth Voyager and Dodge Caravan transformed mobility for the suburban American family. 

Today, the minivan is a staple of the American suburban landscape. But just a couple of decades ago, the idea of a van with the driving dynamics of a car was truly revolutionary. 

At its peak in 2000, automakers sold nearly 1.4 million minivans to American families. Although the crossover SUV has taken over as the sales leader for the family-car market, there are still plenty of buyers that prefer the utility and car-like driving experience of the minivan.

Here's how the minivan came to be. Remarkably, it shares some history with the iconic Ford Mustang!

In 1974, Ford president Lee Iacocca and a team of engineers headed by Hal Sperlich saw the need for a front-wheel-drive, car-based family van.

Fortune



A decade earlier, both Iacocca and Sperlich helped lead the creation of the Mustang.

Sperlich's team concocted a special prototype van. Since Ford didn't have a front-wheel-drive platform on which the van could be built, they instead used a chassis and engine from Honda.

With the runaway success of the Mustang, Iacocca had become an auto-industry titan by the early 1970s ...

Yet, he was still afraid that company boss Henry Ford II would kill off his pet project. So Iacocca and Sperlich kept their prototype van hidden in the basement. According to Iacocca, Ford's management was a hesitant to sign off on the unorthodox van and the project was tabled.

By the late 1970s, Sperlich and Iacocca left Ford to join crosstown rival Chrysler. At that time, the Chrysler was in terrible shape. In 1980, US government was forced to guarantee almost $1.5 billion in loans to keep the company going.

US Government



Fortunately for Iacocca and Chrysler, Ford allowed the departing executing to take the rights to his "mini" van project with him.

By 1983, Lee Iacocca's Chrysler minivan was ready.

On November 2, 1983, the first minivan — a Plymouth Voyager — rolled off the production line in Windsor, Ontario. That's right, the first minivan was actually Canadian!

Initially, the minivan was sold under the Plymouth Voyager and Dodge Caravan monikers.

The upscale Chrysler Town and Country variant followed in 1990.

People loved the van's roomy interior ...

... abundant cargo-hauling ability ...

... easy-access sliding door ...

... all wrapped up in a peppy car-like package.

Before the car-like Chrysler minivan, vans were either boxy affairs like the VW bus or ...

... truck-based affairs, such as the Ford Econoline.

The Chrysler vans were an immediate smash success — 209,000 sold in the first year.

Autoblog



Soon, rival carmakers launched their own minivans, such as the Chevrolet Astro and ...

... Ford Aerostar.

Toyota spruced up their plainly named Van to better compete.

Volkswagen did the same with its venerable Vanagon.

In Europe, Renault launched their Espace just months after the debut of the Chrysler.

The success of the minivans along with the company's K-car sedans saved Chrysler from the brink of financial disaster. By the early 1990s, the company was turning out iconic cars such as the Dodge Viper RT/10.

By the minivan's 10th birthday, the market had matured. Chrysler held as much as 40% of it. But its competitors had also stepped up their game.

In the early '90s, Toyota introduced the innovative but quirky Previa.

Ford dumped the truck-based Aerostar for the car-based Windstar.

GM introduced a trio of car-based minivans sold by its Chevrolet, Oldsmobile, and Pontiac divisions.

In 1995, Honda unveiled its underpowered and undersized Odyssey van.

Smaller players, such as Nissan, Mazda, and Mercury, all entered the market.

In 1996, Chrysler responded with the third-generation Dodge Caravan, Chrysler Town and Country, and Plymouth Voyager. In its first year out, the Caravan captured Motor Trend's coveted Car of the Year award.

The new Chrysler vans featured updated interiors and engines, marking significant upgrades in comfort, utility, and performance.

By the late 1990s, Honda and Toyota learned their lessons. They dumped their unorthodox designs and followed Chrysler's playbook. In 1997, Toyota launched their Kentucky-built Sienna minivan based on the company's award-winning Camry V6 sedan.

A year later, Honda launched their larger, more powerful Odyssey. By 2001, the minivan market peaked, with nearly 1.4 million sold.

Automotive News



During the mid-2000s, minivans sales began to slip.

Consumers began trending toward big SUVs, like the Cadillac Escalade or ...

... crossovers like the Jeep Cherokee for family-hauling duties.

Today, minivan sales are a mere fraction of what they were in their heyday. Fiat Chrysler's vans still hold one-quarter of the market, while Ford and GM have abandoned the market.

The Honda Odyssey and ...

... Toyota Sienna are the only other industry heavyweights left.

Kia's Sedona and ...

.... the Nissan Quest are also available but make up a much smaller share of the market.

Although today's minivans have gotten, bigger, faster, more refined, and more luxurious, they all still trace their roots back to the little Chrysler van that could from the 1984 model year.

Auto industry leader Lee Iacocca, credited with saving Chrysler, has died at age 94

Tue, 07/02/2019 - 10:44pm  |  Clusterstock

  • Lee Iacocca, a major figure in the automobile industry, who previously served as president of Ford and chairman of Chrysler, died on Tuesday at the age of 94. 
  • Iacocca is best known for helping launch the Ford Mustang in the 1960s and for reviving Chrysler under his leadership and saving it from bankruptcy in the 1980s.
  • "He played a historic role in steering Chrysler through crisis and making it a true competitive force," Fiat Chrysler Automobiles said in a statement.
  • His daughter confirmed to The Washington Post that he had died of complications from Parkinson's disease at his home in Bel-Air in Los Angeles. 

Lee Iacocca, a major figure in the automobile industry who previously served as president of Ford and chairman of Chrysler, died on Tuesday at the age of 94. 

Iaccoca's daughter confirmed to The Washington Post that he had died of complications from Parkinson's disease at his home in Bel-Air in Los Angeles. 

"The Company is saddened by the news of Lee Iacocca's passing," Fiat Chrysler Automobiles said in a statement. "He played a historic role in steering Chrysler through crisis and making it a true competitive force. He was one of the great leaders of our company and the auto industry as a whole. He also played a profound and tireless role on the national stage as a business statesman and philanthropist."

He is best known for helping launch the Ford Mustang in the 1960s and for reviving Chrysler under his leadership in the early 1980s, saving it from bankruptcy.

He first landed a job at the Ford Motor Company as an engineer, but soon realized that his talents were better suited to selling cars rather than making them, according to his personal website.

He soon moved up the ranks and became president of Ford, helping launch the Mustang and Lincoln Continental Mark III. But reported clashes with the company's CEO, Henry Ford II, led him to be fired from the company in 1978.

Soon after he became chairman of Chrysler. To turn around the company on the brink of bankruptcy, he persuaded Congress to approve $1.5 billion in federal loan guarantees for new car, which the company paid back early and with interest. He also took a series of drastic cost-saving measures — including cutting executive salaries, closing factories, and more.

In addition to helping the company rebound, his larger-than-life status as a businessman extended into appearing in Chrysler commercials in the 1980s. He also helped in the development of the minivan, transforming mobility for suburban American families.

In 1982, President Ronald Regan recruited Iacocca to chair a campaign to restore the Statue of Liberty, a foundation he continued to serve as a board member until his death. He said the restoration project was "very special" to him, as both of his Italian parents immigrated to the US through Ellis Island. 

In 1992, Iacocca retired, though he still remained close to Chrysler in the years that followed, even promoting the company in ads through his famous catch phrase: "If you can find a better car, buy it." He appeared in a Chrysler commercial with Snoop Dogg in 2005, and said of his encounter with the rapper, "I spent 24 hours with Snoop Dogg and didn't understand a word he said to me the whole time."

Iacocca was involved in philanthropy, starting the Iacocca Family Foundation to fund diabetes research following the death of his first wife Mary in 1983, with whom he had two daughters. Later in life, he invested in the casino business and launched a line of imported olive oil alongside his son-in-law. 

In 2007, he wrote a book critical of American leadership titled "Where Have All The Leaders Gone?," which was especially critical of President George W. Bush and his administration.

"We've got a gang of clueless bozos steering our ship of state right over a cliff, we've got corporate gangsters stealing us blind and we can't even clean up after a hurricane much less build a hybrid car," he wrote in his book. "But instead of getting mad, everyone sits around and nods their heads when the politicians say, 'Stay the course' ... I hardly recognize this country anymore."

Late United Auto Workers Union President Douglas Fraser, who agreed to concessions that helped Chrysler avoid bankruptcy, once called Iacocca "the greatest communicator who's ever come down the pike in the history of the industry."

"I don't know an auto executive that I've ever met who has a feel for the American consumer the way he does."

SEE ALSO: The Mustang and the minivan have an amazing shared history

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Insurtech Research Report: The trends & technologies allowing insurance startups to compete

Tue, 07/02/2019 - 6:03pm  |  Clusterstock

Tech-driven disruption in the insurance industry continues at pace, and we're now entering a new phase — the adaptation of underlying business models. 

That's leading to ongoing changes in the distribution segment of the industry, but more excitingly, we are starting to see movement in the fundamentals of insurance — policy creation, underwriting, and claims management. 

This report from Business Insider Intelligence, Business Insider's premium research service, will briefly review major changes in the insurtech segment over the past year. It will then examine how startups and legacy players across the insurance value chain are using technology to develop new business models that cut costs or boost revenue, and, in some cases, both. Additionally, we will provide our take on the future of insurance as insurtech continues to proliferate. 

Here are some of the key takeaways:

  • Funding is flowing into startups and helping them scale, while legacy players have moved beyond initial experiments and are starting to implement new technology throughout their businesses. 
  • Distribution, the area of the insurance value chain that was first to be disrupted, continues to evolve. 
  • The fundamentals of insurance — policy creation, underwriting, and claims management — are starting to experience true disruption, while innovation in reinsurance has also continued at pace.
  • Insurtechs are using new business models that are enabled by a variety of technologies. In particular, they're using automation, data analytics, connected devices, and machine learning to build holistic policies for consumers that can be switched on and off on-demand.
  • Legacy insurers, as opposed to brokers, now have the most to lose — but those that move swiftly still have time to ensure they stay in the game.

 In full, the report:

  • Reviews major changes in the insurtech segment over the past year.
  • Examines how startups and legacy players across distribution, insurance, and reinsurance are using technology to develop new business models.
  • Provides our view on what the future of the insurance industry looks like, which Business Insider Intelligence calls Insurtech 2.0.
Subscribe to an All-Access pass to Business Insider Intelligence and gain immediate access to: This report and more than 250 other expertly researched reports Access to all future reports and daily newsletters Forecasts of new and emerging technologies in your industry And more! Learn More

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Bank of America has landed a slew of senior dealmakers and is planning more hires to win over rich families and sovereign wealth funds

Tue, 07/02/2019 - 5:48pm  |  Clusterstock

  • Bank of America's investment bank is on the rebound from a tough year in 2018, adding a slew of senior dealmakers and winning blockbuster deals as it claws back market share. 
  • The firm has hired nearly two-dozen senior investment bankers globally this year, according to people familiar with the matter. 
  • More hiring is in the offing as well, as the bank announced last week efforts to build out its coverage of ultra-wealthy families and sovereign wealth funds. 
  • Click here for more BI Prime stories.

Bank of America's investment bank has experienced a sharp turnaround in fortunes midway through the year following a disappointing campaign in 2018 that saw the firm lose market and key executives.

In 2019, under new corporate and investment banking chief Matthew Koder, the firm is adding a slew of senior bankers and landing high-profile deals as it claws back market share and jockeys for position on the industry league tables. 

The bank has made nearly two-dozen senior hires this year across its global investment banking and capital markets operations, according to people familiar with the matter. Some of the hires have not yet been announced as the bankers haven't started work at the firm yet.

"Under new management, Bank of America has signaled it's committed to being one of the top players, and that's quite clearly been borne out in the number of high-quality MDs they're trying to hire worldwide and so far have hired worldwide year to date," Julian Bell, regional managing director for the Americas for executive search firm Sheffield Haworth, told Business Insider.

Just in recent weeks the bank has internally announced several additions, according to memos seen by Business Insider:

  • Gregg Polle is leaving Moelis & Company and joining the firm this summer as a managing director and vice chairman in the mergers and acquisitions group.
  • Rick Sherlund, previously the co-head of technology investment banking at Perella Weinberg, is joining as a vice chairman in technology investment banking. 
  • Jared Birnbaum, a consumer and retail debt capital markets banker most recently at Deutsche Bank, joined as an MD.

Others that have joined the firm's senior ranks this year: Jamie Turturici, previously with JPMorgan Chase, as an MD in tech equity capital markets; John Collmer, previously with JPMorgan, as head of equity private placements; Neil Abromavage, previously with Deutsche Bank, as an MD in financial institutions investment banking, and Tom Bradshaw, as an MD in industrials investment banking. 

A Bank of America spokesman declined to comment.

More senior hiring is expected at Bank of America this year as well, as the firm makes a push to grow its coverage of sovereign wealth and pension funds as well as ultra-wealthy families. 

In a memo sent last week by investment banking co-heads Jack MacDonald and Thomas Sheehan, the firm announced it was building out its team covering global sovereign wealth funds and public pension fund clients, which it described as a $9 trillion market. They tapped Woody Boueiz, who was already running the group but also previously served as co-head of the Middle East and North Africa region, to handle the initiative as his primary focus. 

The bank also announced last week the appointment of Andreas Loulloupis as head of Global Private Capital Family Office Investment Banking, according to an internal memo. He previously served as an MD in the bank's European financial sponsors group. 

A person familiar with the firm's strategy said more senior hires were planned for each of these build-outs.

Landing blockbuster deals and righting the ship

That the firm is hiring should come as little surprise. Following a tumultuous year in 2018 that saw the firm lose ground in investment-banking revenues, especially in US M&A, and resulted in the departure of global chief Christian Meissner, the bank made plans to hire 50 senior dealmakers to bolster the division.

But Bank of America has shown signs of righting the ship even apart from the new senior hires, which in investment banking often take many months before they get up to speed and start contributing to the bottom line.  

The message from new boss Koder, who reportedly told his division they already had enough resources to compete and win market share apart from new hires, seems to have resonated with staff.

The firm reclaimed the third-position on the investment-banking league tables in the first half of the year, after falling to fourth in 2018, according to Dealogic. Bank of America edged out Morgan Stanley but still trails JPMorgan and Goldman Sachs.  

In US M&A revenue — a sore spot last year — the firm moved up to 6th after dropping to 9th in the first half of 2018, according to Dealogic. 

The company has landed high profile assignments as well: Bank of America had a lead role on Uber's monster IPO in May, and it advised oil giant Occidental on its $38 billion buyout of Anadarko and First Data on its $22 billion sale to Fiserv, two of the largest deals this year. 

It also advised on the $9.1 billion sale this week of railroad operator Genesee & Wyoming to a group of private investors

To be sure, Bank of America isn't the only investment bank actively hiring, and it has lost top-flight talent, too. For instance, Eric Bischof, the firm's head of global financial institutions investment banking, recently left to rejoin Morgan Stanley. 

Senior investment-banking recruiters Business Insider spoke with said the big American banks have been making concerted hiring efforts to ensure they stay at the top of the league table or climb higher, especially as European peers like Deutsche Bank and Barclays navigate internal turmoil and lackluster deal activity in their home markets. 

Bank of America and Citigroup, both of which fell just outside the top three of the global and US investment banking league table in 2018, are each in position to add to their ranks and have made aggressive hiring pushes this year, recruiters said. 

Citi recently poached a trio high-profile dealmakers from Deutsche Bank: Mark Hantho, previously Deutsche Bank's chairman of global investment banking and capital-markets coverage; John Eydenberg, previously Deutsche's chairman of the Americas; and Mark Keene, previously the German lender's global cohead of technology, media, and telecom. The bank also added several young MDs from Goldman Sachs. 

"The large American banks are committed to being top or getting there," Bell said. "JPMorgan, Goldman, and Morgan Stanley are perceived as the top-3, and the others are working hard at promoting themselves to the highest levels." 

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

We just got a clear sign that Facebook's dodgy reputation means it has a massive struggle to persuade people to use its new cryptocurrency Libra (FB)

Tue, 07/02/2019 - 5:18pm  |  Clusterstock

  • Most Americans don't seem to plan on using Facebook's cryptocurrency, Libra.
  • A survey by Jefferies found 80% of US social-media users are "unlikely" or "very unlikely" to use the product.
  • A lack in trust in Facebook was cited as a major reason.
  • The findings highlight the massive struggle Facebook will face to convince people to get on board, given its past scandals.
  • Click here for more BI Prime stories.

In June, Facebook unveiled Libra, an ambitious new cryptocurrency that wants to make "moving money around the world ... as easy and cheap as sending a text message."

So far, most people don't seem to be convinced.

The financial-services firm Jefferies conducted a survey of American social-media users after Libra's announcement and found that people are overwhelmingly skeptical of the effort, saying they're unlikely to use it and citing lack of trust in Facebook as a major reason for that.

Eighty percent of respondents said they were "unlikely" or "very unlikely" to make use of Libra when it launches, with 45% saying "I don't trust Facebook" was their biggest concern with it. 

The data highlights the uphill struggle that Facebook will face to persuade people to get on board with its efforts, illustrating how Facebook's years of scandals and ugly missteps are now coming back to bite it as it attempts to move on with ambitious new ventures.

Libra won't launch until 2020, so the $556 billion company still has more than six months to get Libra's message out and convince users of its utility — but it's starting from a position of notable weakness. A company spokesperson did not immediately respond to Business Insider's request for comment.

Facebook's scandals have squandered consumer trust

Libra is Facebook's brainchild, and the company has led the early development of the product, but the plan is to surrender control to an independent organization led by a consortium of more than 100 member companies. A few dozen partners have tentatively signed on with that consortium thus far, including Mastercard, Visa, Uber, Spotify, and Coinbase.

The vision for Libra is a digital currency without borders that will let users send money and pay for things cheaply and easily, with Facebook integrating it into its messaging apps like WhatsApp and Messenger, and building a digital wallet for consumers called Calibra. 

Jefferies surveyed more than 600 US social-media users and found intense skepticism — but it may be better received in emerging-market countries, where consumer financial infrastructure is less developed and the Facebook brand is less tainted.

Facebook has spent the past two years lurching from scandal to scandal — from Cambridge Analytica's misappropriation of tens of millions of users' data to the social network's role in spreading hate speech that fueled genocide in Myanmar.

"Although our survey analyzed only US social media users, we emphasize that in order for Libra to scale successfully, adoption will need to be broad-based. Effectively, without substantial network effects, we do not expect Libra to replace existing forms of cashless payments — at least not in the near term," the analysts Brent Hill and James Heaney wrote in a research note.

"In addition to low trust in FB, almost 40% of respondents said they already had a mobile payment wallet and saw no reason to use Libra. This result raises the question of what problem Libra actually solves. We believe there may be a better use case in emerging markets, where adoption of mobile payments is lower and currencies are more volatile," they added.

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

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Tesla says it delivered a 'record' 95,200 cars in the 2nd quarter (TSLA)

Tue, 07/02/2019 - 4:42pm  |  Clusterstock

Tesla on Tuesday said it delivered a record-setting 95,200 cars in the second quarter of 2019.

Total production for the quarter, which ended on June 30, exceeded deliveries, as is common, leaving about 7,400 cars in the lurch at the end of the reporting period. 

Here are the numbers:

"We made significant progress streamlining our global logistics and delivery operations at higher volumes, enabling cost efficiencies and improvements to our working capital position," the company said in a press release.

The numbers released on Tuesday topped many estimates by Wall Street analysts, despite those expectations being raised by some in recent days. Ahead of the report, the Barclays analyst Brian Johnson, a longtime Tesla bear, upped his delivery estimates to 85,000 from 75,000, still well under the total reported by the company on Tuesday.

Shares of Tesla rose as much 7% following the numbers' release.

In the past week, Tesla has lost several vice presidents, including its head of European operations, production, and engineering. 

Do you work for Tesla? Got a news tip? Get in touch with this reporter at grapier@businessinsider.com. Secure contact methods are available here.

SEE ALSO: Tesla loses engineering VP amid end-of-quarter delivery rush

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Dutch airline KLM is telling customers to fly less as the aviation industry confronts the 'flight shaming' movement

Tue, 07/02/2019 - 4:17pm  |  Clusterstock

  • The Dutch airline KLM launched an environmental campaign titled "Fly Responsibly."
  • The campaign, which encourages travelers to consider packing lighter, buying carbon offsets, or even flying less, is likely a response to the growing "flight shaming" movement in Northern Europe.
  • While commercial aviation only contributes 2% to 3% of total global emissions, that number is likely to increase without intervention.
  • Visit Business Insider's homepage for more stories.

The Dutch airline KLM has launched a new campaign to confront the environmental impact of air travel.

The airline's new "Fly Responsibly" campaign kicked off with a webpage hosted on a dedicated subdomain, and a video published on YouTube.

The campaign comes as the topic of "flight shaming" has been gaining traction this past spring and summer. A concept that originated among a group of Northern European environmental activists — particularly in Scandinavia — flight-shaming, or the anti-flying movement, has gained enough mainstream traction that airlines are starting to take notice.

Airlines such as Thomas Cook and SAS have recognized that anti-flying sentiment has increased in recent years, according to Skift, as emission-conscious passengers choose slower, but more efficient modes of travel when possible, particularly trains.

Although commercial flying accounts for just 2% to 3% of total global carbon emissions today, that number is likely to increase, particularly as passenger numbers are expected to double to 8.2 billion by 2037, according to the International Air Transport Association.

As emissions rise and passengers become more conscious of the impact of each flight they take, airlines find themselves in the difficult position of needing to continue to grow their businesses while acknowledging legitimate environmental concerns.

KLM's video seemingly encourages viewers to fly less — "Do you always have to meet face-to-face? Could you take the train instead?" — but it's likely simply a tactic to draw attention to the larger "Fly Responsibly" campaign.

The campaign's website highlights various sustainability initiatives KLM currently has in place, like the development of a sustainable fuel plant, offering carbon offsets, and more. Some items, like packing lighter, which would reduce overall weight and fuel consumption, have obvious economic benefits for the airline.

However, promoting awareness of its environmental initiatives — including those already in place, those in development, and those that passengers can contribute to — suggests that KLM is taking the threat of flight-shaming seriously, and hopes that awareness is one way to combat the potential economic threat.

SEE ALSO: United Airlines put an underage passenger on a plane to the wrong country, prompting a panicked mother to beg the airline to keep the plane from taking off

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Morale at Deutsche Bank US headquarters is so low, traders are leaving to day drink at 1 PM and actively searching for other jobs in front of their bosses

Tue, 07/02/2019 - 3:48pm  |  Clusterstock

Deutsche Bank's US headquarters is bracing for the worst, following recent news that the company is planning to cut up to 20,000 jobs

According to a story published Tuesday by Bloomberg, morale at the 60 Wall Street office has reached catastrophic depths. Executives at the German bank have already started collecting brown boxes to carry their personal items in preparation of what they believe to be an imminent end. 

Read more: Trump dismisses report that 'very good and highly professional' Deutsche Bank ignored warnings that his accounts could be linked to financial crime

On the trading floor, the story reports, some desks remain empty at mid-morning, while others are present but openly searching for new jobs outside of the firm, with the full knowledge and approval of their bosses. Traders have also been spotted at the bar in the middle of the day, with juniors traders seen drinking beer in a pub, while more senior employees sip cocktails at Cipriani.

Last month, Citigroup hired multiple long-time executives away from Deutsche Bank. This followed news this year that Deutsche was offshoring accounting jobs from Florida to India

Bloomberg reported that Peter Selman, global head of equities, is on his way out the door and that Zia Huque, the head of Deutsche's US securities team, and Tom Patrick, head of the Americas, will likely soon follow. These departures will leave Ashely Wilson, the co-head of equities trading in the Americas, as the senior leader to help steer the bank's US operations. 

Read more: New report claims Trump received around $2 billion in loans from Deutsche Bank

Other executives and top traders have already left, some after the company drastically slashed bonuses earlier this year. Bloomberg reported US managers have tried to advocate for smaller cuts to staffing over the last few years. Now, they're waiting for one big cut, all at once. The future of US equities and rates traders at the German bank in particular remains very much up in the air.

It's been a rough few months for Deutsche Bank. Its share price has cratered, and the bank is facing an investigation for potential money-laundering violations connected to White House senior advisor Jared Kushner. There was a potential for some relief via a merger with Commerzbank, but that fell through this April.

A 2008 purchase of municipal bonds lost the bank $1.6 billion dollars when they were unloaded in 2016. Christian Sewing, the bank's CEO since April 2018, has attempted to right the ship, but its share price is almost half of what it was when he was hired. 

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Ray Dalio started Bridgewater in his apartment and built it into the world's largest hedge fund. Here are 5 major lessons he's learned over the past 44 years.

Tue, 07/02/2019 - 3:39pm  |  Clusterstock

For the past couple years, Ray Dalio's life has been in transition.

He still spends most of his time as the co-CIO of Bridgewater Associates, the hedge fund he founded and built into the largest in the world, but he's also focused on passing on what he's learned.

Dalio stepped back from office management in 2017 and published his first book, "Principles: Life and Work," later that year. He'll be publishing his core investment principles in the next year or so, but his unique life philosophy is core to everything he's done at Bridgewater.

In a recent episode of Business Insider's podcast "This Is Success," Dalio took us through key career moments since founding Bridgewater in 1975, and what universal lesson he pulled from each. You can find that episode and those lessons below.

SEE ALSO: 'Pain is a great teacher’: How Ray Dalio, the world's most successful (and mysterious) hedge-fund founder, came back from financial ruin

Hitting rock bottom in 1982 resulted in a change from focusing on what he knows to focusing on what he doesn't know.

Dalio built a name for himself shortly after founding Bridgewater out of his apartment in 1975.

In 1982, he attracted attention for a call he made two years earlier. He had the unpopular opinion that American banks were lending too much to emerging Latin American countries, but was proven right when Mexico's president announced the country could not pay back its $80 billion in debt, $20 million to $30 million of which was owed to the US's largest banks.

Now that he looked like he knew what he was talking about, analysts — and even the US Congress — turned to him for insights as to what would happen next. He was unequivocal: The US economy was headed for a massive downturn.

Except that the Federal Reserve cut the discount rate, and the stock market went up — and kept going up for years, marking one of the great bull markets in American history. Not only was Dalio wrong, but the exact opposite of what he staked everything on happened.

"As a result of being wrong, I lost money for me, I lost money for my clients, I had to let everybody in my company go, and I was so broke I had to borrow $4,000 from my dad to help pay for family bills," Dalio said.

As he recovered, he realized that he didn't want to stop taking risks, but needed to do so with more humility, and with a new focus. "It made me be much more open-minded, to diversify better, to deal with my not knowing," he said. "Whatever success I've had in my life has been due more to my knowing how to deal with what I don't know than because of anything I know."



An employee's mistake taught Dalio to track what does and doesn't work.

One time in the early '90s, Dalio's head of trading at the time, Ross Waller, forgot to put in a trade — and the mistake cost what Dalio remembers as "several hundred thousand dollars."

He didn't fire Waller (Waller didn't leave until 2004 and has had a long and successful career). Instead, Dalio used the occasion to implement a new approach at Bridgewater.

"I put into place an error log, which we now call an 'issue log,' in which everybody in the company has to write down whenever anything goes wrong so that they bring it to the surface and we learn from it," he said.

It was the first time Dalio created a management tool, and that one would grow into many. Today at Bridgewater, employees have "baseball cards" that track their skills and performance and make it visible to all, and they use the "Dots" iPad app as a real-time forum for commentary during a meeting.

The experience with Waller proved to Dalio that not only should people be given second chances after making mistakes, but that these mistakes can be capitalized on for determining new ways to reinforce desired performance.



A tough conversation with his leadership team taught him about how "radical transparency" can improve relationships when used correctly.

By 1993, Dalio was convinced that unfiltered truth would keep Bridgewater running smoothly. Except not everyone was in full agreement.

One day that winter, three senior executives, including co-CIO Bob Prince, asked Dalio for a meeting and sent him a memo ahead of it. The letter said that while Dalio was great at his job and cared about his team, he was, essentially, acting like a jerk. They said his words and behavior made employees feel "incompetent, unnecessary, humiliated, overwhelmed, belittled, oppressed, or otherwise bad."

Dalio was upset, and he searched for a compromise between the poles he had set for himself: either we're honest with each other or happy. He decided that "radical transparency," as he called it, was crucial for Bridgewater, but that boundaries and expectations had to be set.

"When you're not getting along with somebody or you're having a disagreement, stop, put that aside for a moment, go to a higher level, and then say, 'How should we be with each other? What are our ground rules for operating, and why?'" Dalio told us. "Then go back into your disagreement, and follow those protocols about how you should be with each other."



Bridgewater's rapid growth encouraged Dalio to start writing down his "principles."

Early in his career, Dalio learned that he could program certain investment behaviors, according to what was happening in the markets, into software that made a computer an invaluable tool for trading. This led to an accumulation of investment principles that gave Bridgewater an edge.

As he developed as a leader, Dalio became convinced that the same approach could be used with people. In 2006, Bridgewater had moved past its boutique stage and was on a path of rapid growth. To maintain his firm's culture, Dalio decided to collect a list of its tenets.

In the podcast episode, Dalio said it wasn't as if he suddenly appeared before his company with a book of rules they had to follow. Instead, he said, he had codified what had already existed.

He noted that it's no secret Bridgewater has an intense culture and isn't for everyone, but he believes this practice of logging personal or corporate principles is valuable for and adaptable to any situation.

"One of the great things I'd like to pass along is the power of having people write down their decision rules," Dalio said, because creating processes out of best practices results in better risk management and better communication.



Difficulties with his succession plan taught him about focus and delegation.

Dalio and his team were confident the financial crisis was on its way and planned accordingly. Bridgewater, then, performed relatively well when it did hit, and this brought an influx of attention and new clients. In 2010, Bridgewater had its best year ever.

During this period, Dalio decided he needed to build a succession plan, and was ready to have it last anywhere from a couple years to a decade. He stepped back as CEO in 2011, splitting office leadership between David McCormick and Greg Jensen. In his book, Dalio wrote that he considers Jensen family, and so when it turned out that Jensen was unable to balance both of his roles as co-CEO and co-CIO (a problem Dalio had run into himself in 2008), Dalio considered the ensuing shakeup in 2016 to be his biggest regret at Bridgewater.

He had appointed another CEO, Jon Rubinstein, in 2016, but the role lasted only 10 months. After a year back in the CEO seat, Dalio finally felt he got the succession plan right in 2017 and stepped back.

In the podcast interview, Dalio said the experience taught him several lessons.

"One can say, I think this is going to happen but I shouldn't bet on it, because if you haven't done something three times before successfully, don't assume you know how to do it," he said.

He sought advice from the management expert Jim Collins and learned that he not only needed a governance board for this transition, but that a leader's perspective and talents are not suddenly transferable to a role they have never had.

"I learned how people see things differently," Dalio said. "I learned not to assume that somebody can do something until they're doing it already."



Waymo is now allowed to carry passengers in its self-driving cars in California

Tue, 07/02/2019 - 3:12pm  |  Clusterstock

  • Waymo has received a permit to carry passengers in its self-driving vehicles in California, TechCrunch's Kirsten Korosec first reported.
  • But the Google spinoff cannot charge for rides, and the vehicles must have a safety driver behind the wheel.
  • Waymo is the fourth company to receive California's autonomous-vehicle pilot permit, after Zoox, AutoX Technologies, and Pony.ai.
  • Seen by many experts as the leader in the autonomous-car industry, Waymo launched the first commercial autonomous ride-hailing service in the US, Waymo One, in parts of Arizona in 2018.
  • Visit Business Insider's homepage for more stories.

Waymo has received a permit to carry passengers in its self-driving vehicles in California, TechCrunch's Kirsten Korosec first reported on Tuesday.

The permit, which was issued by the California Public Utilities Commission on Tuesday, allows Waymo to carry passengers in autonomous vehicles on California highways, though the Google spinoff cannot charge them for rides, and the vehicles must have a safety driver behind the wheel.

Read more: Waymo CEO John Krafcik explains why a parking lot is one of the most difficult environments for a self-driving car

Waymo is the fourth company to receive California's autonomous-vehicle pilot permit, after Zoox, AutoX Technologies, and Pony.ai. Seen by many experts as the leader in the autonomous-vehicle industry, Waymo launched the first commercial autonomous ride-hailing service in the US, Waymo One, in parts of Arizona in 2018.

"This is the next step on our path to eventually expand and offer more Californians opportunities to access our self-driving technology, just as we have gradually done with Waymo One in Metro Phoenix," a Waymo representative told Business Insider.

Waymo is also testing autonomous vehicles in Washington, Texas, Michigan, and Georgia.

In a 2019 report, the consulting firm Navigant Research, ranked Waymo first among companies developing self-driving technology in strategy and execution. And according to a report Waymo submitted to the California Department of Motor Vehicles, its safety drivers had to manually take over their test cars, because of safety concerns, about once every 11,000 miles in 2018 — the best rate of any company testing autonomous vehicles on public roads in California.

SEE ALSO: I drove a $64,000 BMW Z4 to see if this high-end roadster is worth the steep price tag — here's the verdict

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