The strangest and most alarming things in WeWork’s IPO filing

CEO of WeWork Adam Neumann Getty ImagesWeWork’s parent company, the We Company, made a splash earlier this week with the release of its much-anticipated IPO prospectus. The company’s S-1 lays the groundwork for what is widely expected to be one of the largest initial public offerings of the year, second only to Uber’s IPO in May. Services are expected to be a long-term driver of the company’s revenue. In its S-1, WeWork said the Up-C structure would give it more flexibility to pursue acquisition


CEO of WeWork Adam Neumann Getty ImagesWeWork’s parent company, the We Company, made a splash earlier this week with the release of its much-anticipated IPO prospectus. The company’s S-1 lays the groundwork for what is widely expected to be one of the largest initial public offerings of the year, second only to Uber’s IPO in May. Services are expected to be a long-term driver of the company’s revenue. In its S-1, WeWork said the Up-C structure would give it more flexibility to pursue acquisition
The strangest and most alarming things in WeWork’s IPO filing Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-17  Authors: annie palmer
Keywords: news, cnbc, companies, strangest, kulkarni, alarming, revenue, filing, company, business, s1, structure, ipo, companys, things, wework, board, weworks, losses


The strangest and most alarming things in WeWork's IPO filing

CEO of WeWork Adam Neumann Getty Images

WeWork’s parent company, the We Company, made a splash earlier this week with the release of its much-anticipated IPO prospectus. The company’s S-1 lays the groundwork for what is widely expected to be one of the largest initial public offerings of the year, second only to Uber’s IPO in May. It’s also filled with unusual items that should scare off all but the hardiest investors with a healthy appetite for risk. Here’s a rundown.

Mounting losses

WeWork’s revenue for the first half of 2019 may have been more than double that of a year earlier, but its losses are accelerating just as rapidly. The company indicated in its IPO filing that losses ballooned to more than $900 million in the first six months of the year, which follows full-year net losses of $1.9 billion in 2018. Massive losses have become part and parcel of unicorn IPOs, as demonstrated by the debut of fellow high-flying tech companies Uber and Lyft earlier this year, among many others. But WeWork continues to face tough questions around the sustainability of its business and few of them were answered in its S-1. “You can say I’m growing faster, but you can’t say that if for every dollar you’re getting, you’re losing a dollar,” said Renaissance Capital principal Kathleen Smith. Similarly, MKM Partners’ Rohit Kulkarni said in a note Friday that investors would “have to take a big leap of faith in order to believe that WeWork would show signs of a sustainable economic model” given the rising costs across its 528 locations. He said WeWork could soon find itself strapped for cash. “At an estimated $1500-200mn in cash burn per month, we believe the company has about six months in execution runway ahead before facing a cash crunch,” Kulkarni wrote in a research note.

Expensive lease agreements

WeWork’s lease obligations bear some attention. The company signs long-term leases with landlords that last up to 15 years, which requires it to pay hundreds of millions of dollars in future rent, according to data provider CB Insights. In the S-1 filing, WeWork said future lease payment obligations were $47.2 billion as of June 30, up from roughly $34 billion at the end of 2018. At the same time, WeWork offers short-term rental contracts to members, in an effort to provide flexibility, collecting rent at an average of a two-year timeframe, Smith said. This is a boon for its members, but could present a risk to WeWork’s business, as these short-term renters could up and leave at any time, leaving the company on the hook for long-term rentals. “That mismatch can be deadly in a recession,” Smith said. “It means the company has got to be able to pay the lease costs. If for some reason there’s price pressure, lack of renewals, cancellations and they have a time where they’re not leasing out their space, that could be a very huge risk in a recession.” The company’s declining revenue per membership also raises some concerns. WeWork estimates a total addressable market opportunity of $945 billion, when applying its average revenue per WeWork membership to its potential member population, the filing states. However, WeWork also warned that revenues per member will decline in the future as it expands internationally into “lower-priced markets.” “Investors want to see [average revenue per member] increase, because that can prove this idea of ancillary services,” Smith said. Services are expected to be a long-term driver of the company’s revenue. CEO Adam Neumann has stated previously that he sees WeWork as a “global platform” for things like “space-as-a-service,” a play on the phrase software-as-a-service. If WeWork is already having trouble increasing its average revenue per member, it could be challenging to get members to shell out a couple extra dollars on things like software or other services.

Puzzling corporate structure and unpredictable China business

After WeWork rebranded to become The We Company in April, it adopted a complicated corporate structure, called an umbrella partnership corporation, or Up-C. In effect, this turned WeWork into a limited liability company, with The We Company overseeing it and joint ventures in Asia, as well as other related entities, such as its fund ARK Capital Advisors, which oversees global real estate management and acquisitions. (The acronym stands for Adam, Rebekah and Kids, in reference to his wife — who’s listed as a co-founder and wields significant influence at the company — and their five children.) This chart from the S-1 shows how complicated it all is:

The Up-C structure has tax benefits for Neumann and other executives, as they’ll be able to pay tax on any profits at an individual income-tax rate, according to the Financial Times. Meanwhile, public shareholders will be subject to double taxation, since the holding company will be taxed on income and investors will pay another tax on dividends. In its S-1, WeWork said the Up-C structure would give it more flexibility to pursue acquisitions, while keeping debts and obligations of its other businesses separate. “Such a structure allows us to separate our WeWork space-as-a-service offering from the rest of our existing businesses, and will also allow us to hold separately any future business areas into which we may expand,” the filing states. Kulkarni said in an interview with CNBC that WeWork’s business in Asia is still in the early stages of development, so the structure allows them to “isolate the losses” associated with it. In the company’s S-1, WeWork noted that its contribution margin, which is the revenue left from membership and services after subtracting operating expenses of those locations, would have been three percentage points higher if it had excluded the China business. WeWork faces unique risks with its operations in China. Business in the region is run by groups it can’t control, local laws are different in terms of the length of leases and it falls under the 2017 China Cybersecurity Law, which gives the Chinese government access to enterprise data. Kulkarni said he believes WeWork hasn’t provided “sufficient disclosures around how the China and Asia assets are held” and that its confusing corporate structure could potentially present significant risks. “It’s a puzzle that needs to be solved,” Kulkarni said.

An all-male board of directors

The We Company disclosed who will serve on its board of directors in its IPO prospectus. Not a single woman will serve on the company’s seven-member board, which could potentially open it up to criticism later on down the line. Neumann is chairman of the board and is joined by Bruce Dunlevie, a founding partner of Benchmark Capital, Ronald Fish, a vice chairman of WeWork’s biggest backer, SoftBank. Lewis Frankfort, Steven Langman, Mark Schwartz and John Zhao also serve as directors. By appointing solely male directors, WeWork is bucking the larger trend toward gender inclusive boards. As of last month, every S&P 500 company had at least one female director on its board. Having a more-diverse board is widely viewed as an avenue toward better shareholder returns.

CEO Adam Neumann’s control and potential conflicts of interest


Company: cnbc, Activity: cnbc, Date: 2019-08-17  Authors: annie palmer
Keywords: news, cnbc, companies, strangest, kulkarni, alarming, revenue, filing, company, business, s1, structure, ipo, companys, things, wework, board, weworks, losses


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Goldman Sachs may lose money on the Apple Card in the next recession, Nomura says

Goldman Sachs may get stung by rising loan losses on the Apple Card in the next economic downturn, according to Nomura analysts. That leads Carcache to one conclusion: “The Apple Card portfolio may generate lower revenues and face higher loss content relative to the industry average.” A widely watched bond market metric is flashing a recession warning amid a global economic slowdown, and bank stocks were hammered Wednesday on the prospect of rising loan losses and tighter profit margins. Goldman


Goldman Sachs may get stung by rising loan losses on the Apple Card in the next economic downturn, according to Nomura analysts. That leads Carcache to one conclusion: “The Apple Card portfolio may generate lower revenues and face higher loss content relative to the industry average.” A widely watched bond market metric is flashing a recession warning amid a global economic slowdown, and bank stocks were hammered Wednesday on the prospect of rising loan losses and tighter profit margins. Goldman
Goldman Sachs may lose money on the Apple Card in the next recession, Nomura says Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-14  Authors: hugh son
Keywords: news, cnbc, companies, money, loan, card, bank, according, losses, nomura, sachs, apple, lose, rising, recession, net, goldman, offs


Goldman Sachs may lose money on the Apple Card in the next recession, Nomura says

Goldman Sachs may get stung by rising loan losses on the Apple Card in the next economic downturn, according to Nomura analysts.

The much-hyped credit card, which Goldman began to make available last week, has no fees, the industry’s lowest interest rate range for comparable cards, and a mandate to approve as many iPhone users as possible, according to a report Wednesday from analysts led by Bill Carcache.

That leads Carcache to one conclusion: “The Apple Card portfolio may generate lower revenues and face higher loss content relative to the industry average.”

In his analysis, which assumes that Goldman spends $350 to acquire each new user, the bank will begin to break even on a customer after four years.

The problem is, the U.S. economy might stall before that. A widely watched bond market metric is flashing a recession warning amid a global economic slowdown, and bank stocks were hammered Wednesday on the prospect of rising loan losses and tighter profit margins. Recessions typically occur an average of 22 months after the yield curve inverts on 2- and 10-year Treasurys, according to Credit Suisse.

Goldman’s product is “highly sensitive” to rising net charge offs, and the bank will begin to lose money if losses reach about 8%, Carcache said. In the last recession, net charge offs surged in 2008 and peaked at above 10% in 2010. Goldman declined to comment on the research note.


Company: cnbc, Activity: cnbc, Date: 2019-08-14  Authors: hugh son
Keywords: news, cnbc, companies, money, loan, card, bank, according, losses, nomura, sachs, apple, lose, rising, recession, net, goldman, offs


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WeWork offers a romantic vision in its IPO filing — alongside staggering losses

WeWork is not the first company to rent office space to workers and companies looking to set up in an established facility. WeWork borrows from tech jargon in calling itself a “space-as-a-service” business, modeled off of the term “software-as-a-service” used to describe companies like Salesforce. Meanwhile, WeWork reported staggering losses in its S-1 filing released Wednesday. The company said it saw a net loss of more than $900 million for the first six months of 2019. By comparison, Uber, an


WeWork is not the first company to rent office space to workers and companies looking to set up in an established facility. WeWork borrows from tech jargon in calling itself a “space-as-a-service” business, modeled off of the term “software-as-a-service” used to describe companies like Salesforce. Meanwhile, WeWork reported staggering losses in its S-1 filing released Wednesday. The company said it saw a net loss of more than $900 million for the first six months of 2019. By comparison, Uber, an
WeWork offers a romantic vision in its IPO filing — alongside staggering losses Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-14  Authors: lauren feiner
Keywords: news, cnbc, companies, tech, wework, branding, offers, company, vision, losses, romantic, filing, companies, billion, staggering, ipo, alongside, workers, reported, loss


WeWork offers a romantic vision in its IPO filing — alongside staggering losses

WeWork is not the first company to rent office space to workers and companies looking to set up in an established facility.

But its aspirational branding has lured in billions of dollars from tech investors who believe the company is much more than a glorified landlord.

WeWork borrows from tech jargon in calling itself a “space-as-a-service” business, modeled off of the term “software-as-a-service” used to describe companies like Salesforce.

In addition to offering stylish work spaces, WeWork says its “community technology” (AKA its app) helps its customers book rooms, find events and connect with one another.

This buzzy branding has ratcheted WeWork’s valuation up to $47 billion as of January, when its largest backer, SoftBank, invested another $2 billion. Meanwhile, WeWork reported staggering losses in its S-1 filing released Wednesday. The company said it saw a net loss of more than $900 million for the first six months of 2019. By comparison, Uber, another recent tech IPO, reported a loss of more than $5 billion in its second quarter, which it largely blamed on stock-based compensation from the IPO.


Company: cnbc, Activity: cnbc, Date: 2019-08-14  Authors: lauren feiner
Keywords: news, cnbc, companies, tech, wework, branding, offers, company, vision, losses, romantic, filing, companies, billion, staggering, ipo, alongside, workers, reported, loss


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Major Asia Pacific markets higher; trade war concerns dampen investor sentiment

Major markets in Asia Pacific closed higher on Monday, following a volatile week for global markets as growing trade war fears dented investor sentiment. Mainland Chinese markets bounced back from the previous week’s losses to close higher Monday. Markets in rest of the region rose, with major indexes in Japan, India and Singapore closed for public holidays. Major miners struggled for gains: Rio Tinto shares tumbled 2.75%, BHP shares were down 0.75% and Fortescue dropped 3.99%. “A risk-off tone


Major markets in Asia Pacific closed higher on Monday, following a volatile week for global markets as growing trade war fears dented investor sentiment. Mainland Chinese markets bounced back from the previous week’s losses to close higher Monday. Markets in rest of the region rose, with major indexes in Japan, India and Singapore closed for public holidays. Major miners struggled for gains: Rio Tinto shares tumbled 2.75%, BHP shares were down 0.75% and Fortescue dropped 3.99%. “A risk-off tone
Major Asia Pacific markets higher; trade war concerns dampen investor sentiment Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-12  Authors: weizhen tan saheli roy choudhury, weizhen tan, saheli roy choudhury
Keywords: news, cnbc, companies, pacific, concerns, sentiment, trade, major, higher, war, losses, week, markets, tumbled, close, shares, hong, investor, dampen


Major Asia Pacific markets higher; trade war concerns dampen investor sentiment

Major markets in Asia Pacific closed higher on Monday, following a volatile week for global markets as growing trade war fears dented investor sentiment.

Mainland Chinese markets bounced back from the previous week’s losses to close higher Monday. The Shanghai composite traded up 1.45% to close at 2,814.99 while the Shenzhen composite added 1.92% to 1,508.21. Hong Kong’s Hang Seng index was fractionally higher at 25,962.42 as of 3:15 p.m. HK/SIN.

But, shares of Hong Kong flag carrier Cathay Pacific tumbled more than 4% as of 3:15 p.m. HK/SIN after it suspended a pilot for his involvement in the ongoing anti-government protests in the city. The carrier said “overly radical” staff would be barred from crewing flights to the mainland. Cathay’s decision came a day after China’s aviation authority issued a “major aviation safety risk warning” to the airline.

Unrest in Hong Kong continued into its 10th week, with police and protesters clashing on Sunday.

Markets in rest of the region rose, with major indexes in Japan, India and Singapore closed for public holidays.

Australia’s benchmark S&P/ASX 200 retraced some of its early losses to climb marginally higher to 6,590.30. Major miners struggled for gains: Rio Tinto shares tumbled 2.75%, BHP shares were down 0.75% and Fortescue dropped 3.99%.

In South Korea, the Kospi clawed back losses to rise 0.23% to close at 1,942,29.

Overall, MSCI’s broadest index of Asia-Pacific shares outside Japan was almost flat.

“Trade tensions continued to drive financial market moves going into the end of the week, with markets very sensitive to reports on the US-China relationship,” Jack Chambers from ANZ Research wrote in a Monday morning note. “A risk-off tone hit the markets as President Trump warned that talks scheduled for next month may not take place.”


Company: cnbc, Activity: cnbc, Date: 2019-08-12  Authors: weizhen tan saheli roy choudhury, weizhen tan, saheli roy choudhury
Keywords: news, cnbc, companies, pacific, concerns, sentiment, trade, major, higher, war, losses, week, markets, tumbled, close, shares, hong, investor, dampen


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Major Asia Pacific markets higher; trade war concerns dampen investor sentiment

Major markets in Asia Pacific closed higher on Monday, following a volatile week for global markets as growing trade war fears dented investor sentiment. Mainland Chinese markets bounced back from the previous week’s losses to close higher Monday. Markets in rest of the region rose, with major indexes in Japan, India and Singapore closed for public holidays. Major miners struggled for gains: Rio Tinto shares tumbled 2.75%, BHP shares were down 0.75% and Fortescue dropped 3.99%. “A risk-off tone


Major markets in Asia Pacific closed higher on Monday, following a volatile week for global markets as growing trade war fears dented investor sentiment. Mainland Chinese markets bounced back from the previous week’s losses to close higher Monday. Markets in rest of the region rose, with major indexes in Japan, India and Singapore closed for public holidays. Major miners struggled for gains: Rio Tinto shares tumbled 2.75%, BHP shares were down 0.75% and Fortescue dropped 3.99%. “A risk-off tone
Major Asia Pacific markets higher; trade war concerns dampen investor sentiment Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-12  Authors: weizhen tan saheli roy choudhury, weizhen tan, saheli roy choudhury
Keywords: news, cnbc, companies, dampen, close, investor, markets, pacific, higher, tumbled, week, shares, concerns, trade, war, losses, sentiment, hong, major


Major Asia Pacific markets higher; trade war concerns dampen investor sentiment

Major markets in Asia Pacific closed higher on Monday, following a volatile week for global markets as growing trade war fears dented investor sentiment.

Mainland Chinese markets bounced back from the previous week’s losses to close higher Monday. The Shanghai composite traded up 1.45% to close at 2,814.99 while the Shenzhen composite added 1.92% to 1,508.21. Hong Kong’s Hang Seng index was fractionally higher at 25,962.42 as of 3:15 p.m. HK/SIN.

But, shares of Hong Kong flag carrier Cathay Pacific tumbled more than 4% as of 3:15 p.m. HK/SIN after it suspended a pilot for his involvement in the ongoing anti-government protests in the city. The carrier said “overly radical” staff would be barred from crewing flights to the mainland. Cathay’s decision came a day after China’s aviation authority issued a “major aviation safety risk warning” to the airline.

Unrest in Hong Kong continued into its 10th week, with police and protesters clashing on Sunday.

Markets in rest of the region rose, with major indexes in Japan, India and Singapore closed for public holidays.

Australia’s benchmark S&P/ASX 200 retraced some of its early losses to climb marginally higher to 6,590.30. Major miners struggled for gains: Rio Tinto shares tumbled 2.75%, BHP shares were down 0.75% and Fortescue dropped 3.99%.

In South Korea, the Kospi clawed back losses to rise 0.23% to close at 1,942,29.

Overall, MSCI’s broadest index of Asia-Pacific shares outside Japan was almost flat.

“Trade tensions continued to drive financial market moves going into the end of the week, with markets very sensitive to reports on the US-China relationship,” Jack Chambers from ANZ Research wrote in a Monday morning note. “A risk-off tone hit the markets as President Trump warned that talks scheduled for next month may not take place.”


Company: cnbc, Activity: cnbc, Date: 2019-08-12  Authors: weizhen tan saheli roy choudhury, weizhen tan, saheli roy choudhury
Keywords: news, cnbc, companies, dampen, close, investor, markets, pacific, higher, tumbled, week, shares, concerns, trade, war, losses, sentiment, hong, major


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Uber CEO: Massive losses from IPO were a once-in-a-lifetime hit

Uber CEO Dara Khosrowshahi called the company’s staggering $5.2 billion loss in the second quarter a “once-in-a-lifetime” hit as he tries to steer it toward profitability. “The founder mentality, that edge, that fire, is absolutely something we want to keep going at the company,” Khosrowshahi said. For the quarter, Uber posted a loss of $4.72 per share, which was larger than the loss of $3.12 per share estimated by analysts. While stock-related compensation costs are common among Silicon Valley


Uber CEO Dara Khosrowshahi called the company’s staggering $5.2 billion loss in the second quarter a “once-in-a-lifetime” hit as he tries to steer it toward profitability. “The founder mentality, that edge, that fire, is absolutely something we want to keep going at the company,” Khosrowshahi said. For the quarter, Uber posted a loss of $4.72 per share, which was larger than the loss of $3.12 per share estimated by analysts. While stock-related compensation costs are common among Silicon Valley
Uber CEO: Massive losses from IPO were a once-in-a-lifetime hit Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-09  Authors: annie palmer
Keywords: news, cnbc, companies, think, hit, quarter, massive, ceo, losses, company, loss, uber, business, ipo, khosrowshahi, ubers, billion, onceinalifetime


Uber CEO: Massive losses from IPO were a once-in-a-lifetime hit

Uber CEO Dara Khosrowshahi called the company’s staggering $5.2 billion loss in the second quarter a “once-in-a-lifetime” hit as he tries to steer it toward profitability.

In an interview with CNBC’s David Faber and Jim Cramer on Friday, Khosrowshahi shed light on the company’s second-quarter earnings report, in which Uber fell short of analysts’ expectations for both the top and bottom lines. The stock plunged as much as 5.9% in afternoon trading.

Khosrowshahi said he’s targeting 30% revenue growth in the back-half of the year, compared to net revenue growth of 26% in the second quarter. He added that spending will increase, but it will decline as a percentage of revenue.

“I think we’ve got very good visibility into our own business as far as the business model and how we can tweak it and how we can drive more efficiency,” Khosrowshahi said. “We think we can not only survive, but we can really thrive in this business.”

Khosrowshahi pushed back on fears that Uber has lost its “founder mentality” after ousted CEO Travis Kalanick, known for his growth-at-all-costs approach, left the company in 2017.

“The founder mentality, that edge, that fire, is absolutely something we want to keep going at the company,” Khosrowshahi said. “It’s a big part of what made the company successful and I absolutely think it will play a big part in making the company successful moving forward.”

For the quarter, Uber posted a loss of $4.72 per share, which was larger than the loss of $3.12 per share estimated by analysts. Revenue came in light at $3.17 billion compared to consensus estimates of $3.36 billion.

The company reported a staggering $5.2 billion loss during the quarter, which was largely owed to stock-based compensation. While stock-related compensation costs are common among Silicon Valley companies, Uber’s losses were bigger than total 2018 losses for all but three S&P 500 companies.

Khosrowshahi continues to face increasing pressure from investors that he can get Uber on track to profitability. That’s likely to be a tough task, given that Uber has long subsidized its rides. He also addressed the stock’s lackluster performance since Uber’s IPO.

“We’ve got to do a better job as far as telling our story to the markets,” Khosrowshahi said. “Long term, the market will take care of itself, and I think that’s what we’re focused on right now.”

He said the company was recently forced to increase prices in New York City due to stricter regulations from the city’s Taxi and Limousine Commission. As a result, Uber has had to “restrict the number of drivers” that can enter the marketplace.

“I think it’s a tragedy. I think that when you put into law laws that are not market driven, you wind up helping special interests and hurting other people,” Khosrowshahi said. “The neighborhoods that need transit the most… our business is suffering there and that’s just not fair.”

In an interview with CNBC’s Deirdre Bosa on Thursday, Khosrowshahi said 2019 will be the company’s “peak investment year” and that losses should come down in 2020 and 2021. He added that he’s certain “the business will eventually be a break even and profitable business.”

Excluding stock-based compensation, Uber’s losses were approximately $1.3 billion, or about 30% worse than the prior quarter.


Company: cnbc, Activity: cnbc, Date: 2019-08-09  Authors: annie palmer
Keywords: news, cnbc, companies, think, hit, quarter, massive, ceo, losses, company, loss, uber, business, ipo, khosrowshahi, ubers, billion, onceinalifetime


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Uber’s Q2 losses were bigger than total 2018 losses for all but three S&P 500 companies

But it seems even bigger when you consider this — only three companies in the S&P 500 lost that much money in all of 2018. Excluding that expense, Uber’s losses were around $1.3 billion, or roughly 30% wider than the prior period. Snap recorded a $2 billion expense in its first post-IPO earnings report in 2017. Among S&P 500 companies, only 26 lost money in 2018. The only three to lose more for the year than Uber lost in the second quarter were General Electric ($20.6 billion), Kraft Heinz ($10.


But it seems even bigger when you consider this — only three companies in the S&P 500 lost that much money in all of 2018. Excluding that expense, Uber’s losses were around $1.3 billion, or roughly 30% wider than the prior period. Snap recorded a $2 billion expense in its first post-IPO earnings report in 2017. Among S&P 500 companies, only 26 lost money in 2018. The only three to lose more for the year than Uber lost in the second quarter were General Electric ($20.6 billion), Kraft Heinz ($10.
Uber’s Q2 losses were bigger than total 2018 losses for all but three S&P 500 companies Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-08  Authors: ari levy
Keywords: news, cnbc, companies, expense, total, ubers, uber, losses, stock, 500, billion, lost, bigger, sp, companies, 2018, heinz, quarter, q2, kraft


Uber's Q2 losses were bigger than total 2018 losses for all but three S&P 500 companies

Dara Khosrowshahi, chief executive officer of Uber Technologies Inc., speaks on a webcast during the company’s initial public offering (IPO) on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, May 10, 2019.

Uber’s $5.2 billion second-quarter loss is big on its face.

But it seems even bigger when you consider this — only three companies in the S&P 500 lost that much money in all of 2018.

The ride-hailing company, which held its stock market debut in May, attributed most of its quarterly deficit to stock-based compensation. Excluding that expense, Uber’s losses were around $1.3 billion, or roughly 30% wider than the prior period.

High stock-related compensation costs are normal for Silicon Valley companies. Equity packages are the price of luring talented engineers who could otherwise command bigger salaries at more established companies. Eventually those options and restricted stock units vest, and the companies then have to account for the costs.

Snap recorded a $2 billion expense in its first post-IPO earnings report in 2017. On Wednesday, Lyft reported a $296.6 million stock-compensation expense following an $894 million cost in the previous quarter.

Stil, Uber’s quarterly loss is eye-popping for investors who are used to companies being well on their way to sustainable profits by the time they reach such a lofty market cap. As of Thursday’s close, Uber was worth $67.3 billion, which would make it the 84th most valuable company in the S&P 500, if it were in the index.

Uber shares dropped about 6% in extended trading after reporting disappointing revenue and a wider-than-expected loss.

“We think that 2019 will be our peak investment year and we think that 2020, 2021, you’ll see losses come down,” CEO Dara Khosrowshahi told CNBC.

Among S&P 500 companies, only 26 lost money in 2018. The only three to lose more for the year than Uber lost in the second quarter were General Electric ($20.6 billion), Kraft Heinz ($10.2 billion) and Newell Brands ($6.8 billion).

GE’s massive deficit was the result of a $23 billion charge taken in the third quarter last year for its struggling power business. At the same time of that announcement in October, the company abruptly removed CEO John Flannery after only a year on the job.

In the fourth quarter, Kraft Heinz slashed the value of its Kraft and Oscar Mayer brands by $15.4 billion, leading to a 27% plunge in the stock price in one day. The performance was even a shock to Warren Buffett, who admitted in February that “we overpaid for Kraft.” In 2013, he teamed with Brazilian private equity firm 3G to acquire Heinz and two years later helped merge it with Kraft.


Company: cnbc, Activity: cnbc, Date: 2019-08-08  Authors: ari levy
Keywords: news, cnbc, companies, expense, total, ubers, uber, losses, stock, 500, billion, lost, bigger, sp, companies, 2018, heinz, quarter, q2, kraft


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Lyft flat despite strong earnings report

Lyft President John Zimmer (L) and CEO Logan Green during an interview at an IPO event in Los Angeles March 29, 2019. Lyft said it now expects revenue to reach between $3.47 billion and $3.5 billion this year, up from a previously stated range of $3.275 billion to $3.3 billion. Shares in Lyft had dipped more than 15% from its IPO price, prior to its second quarter update. In recent weeks, Lyft had to pull its electric bikes from some markets after some of the bikes caught fire due to undetermine


Lyft President John Zimmer (L) and CEO Logan Green during an interview at an IPO event in Los Angeles March 29, 2019. Lyft said it now expects revenue to reach between $3.47 billion and $3.5 billion this year, up from a previously stated range of $3.275 billion to $3.3 billion. Shares in Lyft had dipped more than 15% from its IPO price, prior to its second quarter update. In recent weeks, Lyft had to pull its electric bikes from some markets after some of the bikes caught fire due to undetermine
Lyft flat despite strong earnings report Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-07  Authors: lora kolodny
Keywords: news, cnbc, companies, lyft, billion, quarter, flat, expected, company, earnings, second, losses, report, despite, vs, million, strong, bikes


Lyft flat despite strong earnings report

Lyft President John Zimmer (L) and CEO Logan Green during an interview at an IPO event in Los Angeles March 29, 2019.

Lyft, the second most popular ride-hailing platform in the U.S., just reported earnings for the quarter ended June 20:

Loss per share: $0.68 adjusted, vs an expected loss of $1.74, per Refinitiv

$0.68 adjusted, vs an expected loss of $1.74, per Refinitiv Revenue: $867 million vs $809 million expected, per Refinitiv

Shares in the company climbed as much as 13% after hours, but gave up early gains after the company announced share lock-ups would expire on August 19, 2019 rather than a previously scheduled date in September.

In a call with CNBC’s Deirdre Bosa, Lyft CFO Brian Roberts said he believed peak losses for the company were last year, based on how well this quarter went. He also said the company may break even sooner than it predicted, and will update the street later this year in terms of long-term guidance and break-even date.

Lyft said it now expects revenue to reach between $3.47 billion and $3.5 billion this year, up from a previously stated range of $3.275 billion to $3.3 billion. The company also said that it expects to stem its losses in its first fiscal year on the public markets, revising guidance from EBITDA losses of $1.15 billion to $1.175 billion down to $850 million to $875 million

In addition to better than expected sales and a rosier outlook, Lyft reported that it had 21.8 million “active riders” on its platform in the second quarter, versus the 21.1 million analysts expected.

Lyft made its public market debut in March, raising about $2.3 billion from its listing. Shares in Lyft had dipped more than 15% from its IPO price, prior to its second quarter update.

Like Uber, its chief competitor, Lyft has been trying to build its mobility business beyond ride-hailing. It acquired Motivate, and its bike-sharing network, and deployed electric “dockless” bikes, and scooters in North American cities.

Uber shares also rose more than 3% as investors reacted to Lyft’s positive guidance.

In recent weeks, Lyft had to pull its electric bikes from some markets after some of the bikes caught fire due to undetermined causes.

Former Chief Operating Officer Jon McNeill recently left Lyft after less than two years there, the company disclosed in a filing at the end of July.


Company: cnbc, Activity: cnbc, Date: 2019-08-07  Authors: lora kolodny
Keywords: news, cnbc, companies, lyft, billion, quarter, flat, expected, company, earnings, second, losses, report, despite, vs, million, strong, bikes


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Dow futures fall, implying a 480-point drop on Tuesday as trade war sell-off continues

Stock futures fell on Monday night, adding to Wall Street’s losses from its worst day of 2019 amid intensifying trade-war fears. Dow Jones Industrial Average futures traded 358 points lower, implying a loss of 480.74 points at Tuesday’s open. S&P 500 and Nasdaq 100 futures also indicated sharp losses. The Dow and S&P 500 plunged 2.9% and nearly 3%, respectively, on Monday while the Nasdaq Composite lost 3.5%. The Treasury Department designated China as a currency manipulator on Monday night afte


Stock futures fell on Monday night, adding to Wall Street’s losses from its worst day of 2019 amid intensifying trade-war fears. Dow Jones Industrial Average futures traded 358 points lower, implying a loss of 480.74 points at Tuesday’s open. S&P 500 and Nasdaq 100 futures also indicated sharp losses. The Dow and S&P 500 plunged 2.9% and nearly 3%, respectively, on Monday while the Nasdaq Composite lost 3.5%. The Treasury Department designated China as a currency manipulator on Monday night afte
Dow futures fall, implying a 480-point drop on Tuesday as trade war sell-off continues Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-05  Authors: fred imbert
Keywords: news, cnbc, companies, implying, strategist, continues, trade, fall, stock, futures, tariffs, traders, stocks, 480point, war, selloff, drop, trump, losses, dow, china


Dow futures fall, implying a 480-point drop on Tuesday as trade war sell-off continues

Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on January 17, 2018 in New York.

Stock futures fell on Monday night, adding to Wall Street’s losses from its worst day of 2019 amid intensifying trade-war fears.

Dow Jones Industrial Average futures traded 358 points lower, implying a loss of 480.74 points at Tuesday’s open. S&P 500 and Nasdaq 100 futures also indicated sharp losses. If these losses remain, the Dow’s two-day decline would amount to more than 1,300 points.

The Dow and S&P 500 plunged 2.9% and nearly 3%, respectively, on Monday while the Nasdaq Composite lost 3.5%.

“We are seeing another gut check after stocks had the best start to a year since 1997 (through July),” said Keith Lerner, chief market strategist at SunTrust Private Wealth, in a note. “We already thought the environment would become more challenging over the short term heading into the seasonally weaker period of August through October. The latest trade escalation has served to exacerbate this typical weakness.”

Monday’s move lower added to a sell-off that began last week when President Donald Trump announced new tariffs on Chinese goods and the Federal Reserve disappointed traders by not signaling aggressive monetary easing later in 2019.

After the new tariffs were unveiled, China let the yuan break to its lowest level against the dollar in more than 10 years on Monday. China has historically managed its currency.

The Treasury Department designated China as a currency manipulator on Monday night after Trump accused them of being one in a tweet. Trump said in the tweet: “This is a major violation which will greatly weaken China over time.”

He tweeted later in the day that it is “now even more obvious to everyone that Americans are not paying for the Tariffs – they are being paid for compliments of China, and the U.S. is taking in tens of Billions of Dollars.”

China also confirmed earlier reports that it was suspending the purchases of U.S. agricultural products.The U.S.-China trade war has been going on since last year, dimming sentiment and the outlook for corporate profits and economic growth.

“The primary risk to the U.S. economy now is not the accounting effects of tariffs and/or exchange rates, but a decline in economic confidence and a dampening in the animal spirits that have fueled growth over the past several years,” said Willie Delwiche, investment strategist at Baird. “Weakening prospects for the economy add to near-term headwinds for the stock market.”

“This could spell further near-term volatility for stocks. A pullback could provide an important test of the recently improved breadth trends and also help provide a more favorable sentiment backdrop,” said Delwiche.

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Company: cnbc, Activity: cnbc, Date: 2019-08-05  Authors: fred imbert
Keywords: news, cnbc, companies, implying, strategist, continues, trade, fall, stock, futures, tariffs, traders, stocks, 480point, war, selloff, drop, trump, losses, dow, china


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Battling flood damage? Why you’ll have a hard time getting a tax break for it

NASA | ReutersHomeowners dealing with damage from summer storms have another disappointment ahead: They may not be able to get a tax break for their losses. That’s because a provision in the Tax Cuts and Jobs Act – the tax code overhaul that went into effect in 2018 – limits the extent to which you can claim a deduction for property damage. You can now only get a tax break if the damage is due to a federally declared disaster. “It was always a difficult deduction to claim,” said Robert Westley,


NASA | ReutersHomeowners dealing with damage from summer storms have another disappointment ahead: They may not be able to get a tax break for their losses. That’s because a provision in the Tax Cuts and Jobs Act – the tax code overhaul that went into effect in 2018 – limits the extent to which you can claim a deduction for property damage. You can now only get a tax break if the damage is due to a federally declared disaster. “It was always a difficult deduction to claim,” said Robert Westley,
Battling flood damage? Why you’ll have a hard time getting a tax break for it Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-07-19  Authors: darla mercado
Keywords: news, cnbc, companies, deduction, claim, westley, getting, youll, losses, taxpayers, hard, tax, damage, washington, storm, disaster, break, battling, flood


Battling flood damage? Why you'll have a hard time getting a tax break for it

Tropical Storm Barry is shown in the Gulf of Mexico approaching the coast of Louisiana, in this July 11, 2019 NASA satellite handout photo. NASA | Reuters

Homeowners dealing with damage from summer storms have another disappointment ahead: They may not be able to get a tax break for their losses. That’s because a provision in the Tax Cuts and Jobs Act – the tax code overhaul that went into effect in 2018 – limits the extent to which you can claim a deduction for property damage. You can now only get a tax break if the damage is due to a federally declared disaster. “It was always a difficult deduction to claim,” said Robert Westley, CPA and member of the American Institute of CPAs’ Financial Literacy Commission. “And now it’s even harder.”

Residents don’t have to be at the epicenter of a hurricane to feel its effects. For instance, Hurricane Barry made landfall in Louisiana on Saturday, July 13. As the storm continued north and dissipated, residents as far as New York and New Jersey dealt with torrential rains and flooding from Barry’s remnants. As of July 9, there were six weather and climate disaster events with losses exceeding $1 billion, according to the National Oceanic and Atmospheric Association. There could be nine to 15 named storms in 2019, according to NOAA. The Atlantic hurricane season runs from June 1 to Nov. 30.

Law changes

The Internal Revenue Services offices in Washington, D.C. Adam Jeffery | CNBC

Before the new tax law, taxpayers who itemized deductions on their federal return could claim property losses that weren’t reimbursed by insurance and that were the result of natural disasters, accidents, fires and more. Now you can only claim this deduction if the damage is attributable to a federally declared disaster. This change is in effect from 2018 through the end of 2025. Your total losses must be more than 10% of your adjusted gross income. Further, the new tax law also raised the standard deduction ($12,200 for single filers and $24,400 for married-filing-jointly in 2019), roughly doubling it from its prior levels.

It was always a difficult deduction to claim, and now it’s even harder. Robert Westley CPA and member of the American Institute of CPAs’ Financial Literacy Commission

As a result, fewer taxpayers are likely to itemize deductions on their returns — meaning even fewer people will be able to write off casualty losses, Westley explained. In all, 154,274 taxpayers filed returns claiming casualty and theft losses in 2016, according to the most recent data available from the IRS. “In the past, maybe the tax benefit provided some relief,” Westley said. “That relief is more or less gone.” Homeowners should bolster their own finances and review their insurance coverage to make sure they’re prepared for a disaster, he said.

Preparing for disasters

Stores along Main Street sustained severe damage after a storm system dumped over 9-inches of rain in about a two-hour span on Sunday, and workers begin the task of cleaning up May 29, 2018 in Ellicott City, MD. (Photo by Katherine Frey/The Washington Post via Getty Images) Katherine Frey | The Washington Post | Getty Images


Company: cnbc, Activity: cnbc, Date: 2019-07-19  Authors: darla mercado
Keywords: news, cnbc, companies, deduction, claim, westley, getting, youll, losses, taxpayers, hard, tax, damage, washington, storm, disaster, break, battling, flood


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