Justin Lebron

Uber IPO Valuation Falls Short As Market Cracks and Lyft Problems Weigh

It was the biggest initial public offering in the history of Wall Street, and for all intents and purposes, ride-hailing giant Uber did well on its listing day. However, for those who were expecting the company to drive a valuation equal to or over $90 billion, it was not the case. An unfavorable market that had cracked under the pressure of the trade war between the United States and China, coupled with the disastrous performance of rivals Lyft in recent weeks have been cited as some of the reasons why Uber’s IPO did not fetch the magic valuation. That being said, it was not all doom and gloom, as the company still commanded a massive valuation of $82.4 billion on its listing day.

Due to the poor performance from Lytf on the stock market, Uber had decided to price its shares far more cautiously, and that is perhaps one of the reasons why it could still drive that valuation amidst all the troubles. Although the valuation of $82.4 billion on a listing day is nothing to be sniffed, it remains an underwhelming performance for a company whose IPO had so much hype ever since its plans of going public became known back in 2018. According to many in investment banking circles, the company was supposed to be valued at $120 billion, but eventually, Uber decided to go for a much more conservative approach and decided to price its shares at $45 each. It should be noted that the company had priced its shares in the price bank of $44 to $50 and the eventually listing price of $45 was on the lower side. That being said, the original shareholders of the company must have still made a handsome profit as the $82.4 billion valuations is still higher than the last private valuation of the company, which stood at $76 billion.

Lyft, which had its IPO in March, had priced its stock too aggressively and after a promising listing day performance, its shares slumped, and since then the company’s stock has not been able to regain its IPO price. That proved to be the cautionary tale for Uber, and that was possibly the reason why it went for a conservative approach. A partner at CohnReznick, the advisory firm, stated, “Ultimately, the success of Lyft’s and Uber IPO’s offerings will be judged based on post-IPO performance and how these companies can sustain their growth while moving toward profitability and lowering their cash burn.”

Justin LebronUber IPO Valuation Falls Short As Market Cracks and Lyft Problems Weigh
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AIG Beats Wall Street Estimates and Reports First Quarter Profits

American International Group familiarly known as AIG is a multinational insurance and financial company founded in America with headquarters in New York and operating in more than 80 countries around the world released its quarterly earnings today with a jump of 44% earnings increase. The company released its adjusted earnings and said that profits they earned were primarily due to lower expenditure, higher premiums and better underwriting business in its general insurance unit.

With a 44% jump in profits, the company’s net revenue was at $1.39 billion from $963 million it had last year. The share price also increased from $1.04 to $1.58 per share compared to last year. AIG beat the Wall Street estimates as analysts had expected a profit of $1.04 for a share. The company which is among the largest insurance companies in the US said that it has earned an underwriting profit of $179 million in its general insurance and is a huge increase when compared to last year’s loss of $251 million. The CEO Brian Duperreault said that he expects the underwriting profit to increase the rest of the year too and that helped the shares rise by more than 6%.

In a statement released to the press, AIG’s CEO said: “We achieved an underwriting profit on a calendar year and accident year basis in the first quarter, and we expect that to continue for the full year.” AIG was bailed out by the US government after the financial crisis in 2008 and has made tremendous progress from then to now. The CEO, Duperreault who took over in 2017 has been instrumental in changing the work culture and business practices. Until then AIG was considered as a high risk-taking company with a focus on revenue and not on weighing the risks. The company is still looking at ways to reduce the losses that they incurred on its old business model.

There are many things AIG is doing differently from before, and one of them is to lessen the expenses. It has reduced the expense ratio to 34.3 basis points when compared to the same quarter last year. There was a rise in gross premium by 11% and was at $10.2 billion mainly due to its general insurance in North America. The general insurance accident year combined ratio was at 96.1 this quarter when compared to last year’s ratio of 99.7 which means the company paid less in claims and earned more in premiums.

Justin LebronAIG Beats Wall Street Estimates and Reports First Quarter Profits
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Parked Model S Explosion: Tesla Sends Investigation Team

The Tesla Model S car exploded in a parking lot in Shanghai, and investigators from the company are being sent to find the cause of the explosion. This is one among the string of incidents of fire that Tesla cars have been in. There have been reports of 14 cases of Tesla cars involved in fire incidents since its launch in 2013, but most of these cases have been reported after a crash, and this one is among those incidents when the car caught fire when parked.

User tweets video of the explosion

A security camera at the underground parking space shows a Model S of white color engulfed in smokes and then bursting into flames. The video which is 22 seconds long and with a timestamp of Sunday evening was tweeted by a user Xiu Jian Cong Ye De Liu got about 18 million views by Monday morning.

The user video tweeted saying ‘Good or bad, negative or positive I will post anything about Tesla or EVs in China. This happened today in Shanghai, China 1st generation Tesla Model S caught fire in an underground car park’.

In reaction to the tweet, the US automaker issued a statement that ‘we immediately sent a team on site to establish the facts. From what we know now, no one was harmed’.

Tesla had earlier said that the electric vehicles are more prone to fire than petrol cars but did not mention whether this data implies for accidents or normal use.

Social media abuzz

The social media in China was abuzz with varied comments some funny and some are speculating the impact. Some hashtags like ‘Tesla self-ignites’ got more than 20 million views while others urged the company to find the reason behind the explosion. Another humorous comment said ‘One lesson I learned from the Shanghai self exploding Tesla: Don’t park your car next to Tesla.’ There were others who were more concerned with cars running on the road.

On a more serious note, the company’s reputation is now at stake as it is now trying to sell more of its cars in China by importing it. It is currently building a manufacturing unit in Shanghai to reduce tariffs due to the trade war. The fire incident that happened on Sunday will draw more attention to EVs safety and also dent the reputation of Tesla. It is to be seen whether the sales will be impacted due to this incident.

Justin LebronParked Model S Explosion: Tesla Sends Investigation Team
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Tesla Deliveries Drop This Quarter

Tesla Inc deliveries dropped by 31 percent in the first quarter as the company struggled with its first Model 3 sedan shipment to China and Europe due to longer transit times.

The company has confirmed again that its guidance in delivering over 400,000 vehicles in 2019 has dropped. In fact, the order for its latest Model 3 sedan in the U.S. alone has already outpaced what Tesla is able to fulfill in the first quarter alone. The model was recently made available at $35,000 in the United States.

Tesla was able to deliver only above fifty percent of the first quarter’s orders by March 21. According to reports, over 10600 vehicles are still in transit. This is pretty high compared to 1900 vehicles in transit during the fourth quarter last year.

According to Wedbush analyst Daniel Ives, Wall Street expected a more apocalyptic quarter. Although the number of deliveries was clearly rocky, it was better than what many expected.

Analysts expected lower deliveries in the first quarter as Tesla started delivering its latest Model 3 sedan to China and Europe amidst the drop in demand in North America as well as the fifty percent reduction of $7500 tax credit at the end of last year.

Tesla announced on Wednesday that its net income this quarter would be affected negatively by the lower delivery as well as price cuts. The company warned investors of an impending loss in the first quarter.

According to the IBES data from Refinitiv, Tesla was able to deliver only 50,900 Model 3s which was lower than the estimated 58,900 by analysts. The car manufacturer delivered 63,000 vehicles including Model X SUVs as well as Model S sedans. This is lesser than the number of Model S, and Xs delivered in the last quarter of 2018.

The total production dropped by 10.92 percent from 86,555 to 77,100. The Model 3 sedan from Tesla is a part of the company’s growth strategy as Elon Musk, the company’s Chief Executive Officer is under pressure to guard its working capital as it tries to deliver the vehicle to international markets more efficiently. Delivering the model 3 sedan to international markets has brought forth plenty of challenges for Tesla.

Musk has been battling it out with the U.S. regulators about Tesla’s production. A judge will be hearing the case on Thursday.

Although Tesla promised to sell its $35,000 priced Model 3 sedan in North America, the price change was too late to make a difference this quarter.

Justin LebronTesla Deliveries Drop This Quarter
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Creditors Give up on Anil Ambani Group Following Loss of 12,600 Crore

Money lenders gave up on the shares of Anil Ambani group companies which they owned as collateral soon after their market value dropped by Rs 12,600 crore [app. $1.8 billion] in this month, further summing to the collection of sorrows to the disturbing Indian billionaire.

Creditors sold off 5.5 billion total shares in four companies namely Reliance Infrastructure, Reliance Power, Reliance Capital and Reliance Communications which lead to 3 to percent point decrease in the founder’s stakes in these companies, as per the filings.

The sentiment of the fragile investor for the Anil Ambani group dealt with another shock after its wireless unit, Reliance Communications, reported on last Friday that it is planning to file for bankruptcy. The selloff has extended to another group of firms as a week, further decreasing the value of the shares that were promised as collateral.

IDBI Trusteeship Services which controls Reliance Power shares mentioned that the assets were sold because the borrowers defaulted on the terms.

Reliance communication has observed the decline in the market value by almost more than half during this week; meanwhile, the shares of Reliance Infrastructure and Reliance Power have significantly dropped by 60 percent each. Reliance Capital has dropped by 34 percent.

The issue of the share pledge has plunged other Indian companies too. Media tycoon Subhash Chandra’s of Essel Group agreed upon a contract by signing it with the lenders that secure the group’s borrowing against shares from being totaled up to 30 September, even if their value declines. On January 25, the agreement was followed by a 27 percent drop in the flagship Zee Entertainment Enterprises.

Justin LebronCreditors Give up on Anil Ambani Group Following Loss of 12,600 Crore
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US Rebate Plan Gets the Backing of Novartis CEO

The prices of drugs in the United States are one of the highest among developed countries, and that has been a source of anger for citizens for many years. However, the CEO of Swiss drugmaker Novartis Vas Narasimhan pointed out during the course of an interview that the company’s pricing has remained flat in the last three years and the pricing issue is primarily down to middlemen. The middlemen are actually in charge of managing drug benefits, and apparently, the rising drug prices are down to them. The United States government had floated the idea of a rebate plan by way of which the rebates that were paid to these middlemen or ‘pharmacy benefit managers’ (PBM) and would be ended and the benefits passed on to the end user. Insurers are also included among pharmacy benefit managers.

In January this year, the Alex Azar, the Secretary of the U. S. Health and Human Services unveiled a plan that seeks to end the rebates that were going into the pockets of PBMs and instead, divert those benefits directly to the patients so that that drug prices could be reduced. It should also be noted that U.S. President Donald Trump also called for lowering the prices of prescription drugs in the country in his State of the Union address this week.

Narasimhan, who has served as the chief executive of Novartis since February of 2018, backed this plan and stated that it would be ultimately hugely beneficial for patients. Novartis, which had recorded worldwide sales of $51.9 billion and profits of $12.6 billion, counts the U. S. as its most important market. More than 33% of its revenues are generated in the country. During an interview with Reuters, he said, “We (Novartis) pay almost 50 percent of our gross revenues in the United States into rebates. If you return those rebates to patients, so patients pay less out of pocket, I think that is something that makes a lot of sense and will correct a distortion in the marketplace.”

The PBMs, on the other hand, have countered the idea of this new rebate plan by stating that they pass along a lot of the benefits to the patients and in fact, due to the work they do, many people are paying lower health insurance premiums. However, Narasimhan countered that notion as well and stated that if it the payment to PBMs went on then at some point it will affect the insurance plans offered by the employers in the country. Needless to say, premiums will go up significantly as well. He said, “We have zero transparency into the billions we pay in rebates. You could see some adjustment in premiums. But I think that’s another area where we should get transparency.”

Justin LebronUS Rebate Plan Gets the Backing of Novartis CEO
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Three reasons why Trump is unlikely to clinch an infrastructure deal

United States president Donald Trump is keen to get an infrastructure deal done. But the way things have been working out for Donald Trump, it looks more and more unlikely that he will get any. When speaking about this, a former economic advisor to Presidents Barack Obama and Bill Clinton, Gene Sperling, said that the United States president Donald Trump might be facing three significant challenges actually to finalize on a deal.

President Donald Trump is expected to address this issue on Tuesday night when he takes the podium to present his State of the Union address. Gene Sperling in a speech told that getting a positive response from the Democrats, who hold the House majority, is most possibly going to be difficult. He further added that the United States president has “three pretty tough bars to get over” to get a bipartisan infrastructure deal.

Trust Issue:

Gene Sperling, who served as director of the National Economic Council under both Clinton and Obama said, “People don’t like making a deal with him. Even Republicans have gotten burned on DACA, on the shutdown appropriations. So there is very little trust,”

President Donald Trump has caused some perturbation within his party over the recent shutdown of government and his stance to phase out Deferred Action for Childhood Arrivals. The Deferred Action for Childhood Arrivals had a difference in opinion regarding the deportation for immigrants who were brought into the U.S. illegally as children. The decision for this case is still ongoing and is currently being held up in court. Trump recently offered to extend Deferred Action for Childhood Arrivals legal protections for three years. Donald Trump offered this as an exchange to end the government shutdown and for border wall money and. The shutdown of government finally ended after a record-long 35 days.

Government Design:

There is a wide gap between the two parties when it comes to what should be in the plan. Gene Sperling said, “Democrats are going to want real spending, not loans, public-private partnerships and they’re going to want, as Chuck Schumer has said, a green infrastructure component that deals with climate change.”

“Any infrastructure bill would have to include policies and funding that help transition our country to a clean-energy economy and mitigate the risks the United States already faces from climate change,” Schumer wrote in the Washington Post op-ed on December. A distinguished visiting fellow at The Heritage Foundation and co-author of “Trumponomics: Inside the America First Plan to Revive Our Economy,” Stephen Moore, agrees there is a wide divergence between the two parties.

When commenting about the issue, Moore, a conservative economist who advised the Trump campaign in 2016 said that the GOP wants more bridges and roads, better energy infrastructure and ports. While on the other hand the Democrats, want more green energy programs and mass transit.

Moore said, “When Republicans talk about infrastructure and Democrats talk about infrastructure, and it’s like Republicans are on Mars and Democrats are on Venus. There is an issue of whether they are actually talking about the same thing.”

Finance:

Gene Sperling said that after Trump’s tax cut added to the deficit, Democrats are going to expect a plan that is more deficit neutral. He went on to add, that this might lead to conflicts about whether President Donald Trump is willing to revert some of his recent tax cut to help foot the bill. However, Moore insisted that such a scenario will never happen.

“I guarantee you there is not going to be a big tax increase or a pullback on the tax cut because we believe the tax cut has been a phenomenal success,” Moore said.

He went on to add that the policy is responsible, in part, for the “incredible economy” and the “biggest construction boom going on in American history.”

Justin LebronThree reasons why Trump is unlikely to clinch an infrastructure deal
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Gold prices stable while Trump speech ignites fear of a government shutdown

On Wednesday, the gold prices sustained stability following the U.S President Donald Trump Union speech in his state promised to construct a border wall by giving little clarity about the developments within the ongoing trade negotiations with China.

Spot gold also retained stability at around $1,314 per ounce during 0431 GMT.

The U.S gold futures were also steady at $1,318 per ounce.

In the chamber of the House of representative, President Donald Trump spoke about the political conflict that he is undergoing due to his warnings that Democrats should end their opponents to funding for a border wall which is essential to stop the illegal migration and illegal circulation of drugs.

Another government shutdown is more likely in risk because of President Donald Trump who is still adhering to the speech of building a border wall, Hitesh Jain, the vice president of Yes Securities informed; further saying that steadier dollar is exceeding the profit of the gold.

Market competitors are aware of the fact that the global macro numbers are reducing. Investment in gold is the best approach and is very much in computation.

Trump’s claims for $5.7 billion for a U.S Mexico border wall funding has stimulated a 35-day historical partial government shutdown which was ended on 25th January while Trump has warned to resume the shutdown if in case he is not satisfied with the discussions.

At the same time on Tuesday, Dallas Federal Reserve President Robert Kaplan stated that unless the U.S economic outlook is not clear the Fed should keep the interest rate where they are as of now, and the process that is in his sight might take other several months.

The interest rate remained steady by the U.S central bank during last week and pledged to be patient before making any adjustments in the future.

The latest Fed meeting signaled that they would be very much in the patient because of the immediate slowdown and due to unreliable trade backdrop. It would still be observed as a peaceful stand even if there is at least one rate hike, Jain mentioned.

Meanwhile, the Trump’s speech did not mention anything important about the China trade front, Chinese officials and U.S officials are confident enough to start another round of trade talks by next week which is held in Beijing, two members who were well known about the plans informed on Tuesday.

Trump has promised to raise 25 percent tariffs from 10 percent over $200 billion goods of Chinese imports as of now if in-case both of them do not agree to a deal by 12.01 A.M on March 2.

As of now gold is unable to form the upside momentum and seems to be battling, Edward Meir the analyst of INTL FCStone mentioned in a research note.

Assets of SPDR Gold Trust which is the biggest gold-backed exchange-traded fund notice a fall of 0.18 percent on Tuesday. There is a drop for 2 consecutive sessions on the assets.

Palladium which is the precious metals also fell by 0.2 percent to $1379 an ounce.

Silver also fell down by 0.5 percent at $15.76, and platinum also slipped by 0.1 percent to $815.

Justin LebronGold prices stable while Trump speech ignites fear of a government shutdown
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20-Year Old Hacker Pleads Guilty to $5 Million Cryptocurrency Theft

While we are enthusiastically embracing the digital form of currency, issues of its security persists. The recent event where the cryptocurrency hacker has pleaded guilty is a strong proof of the scenario, drawing our attention to review the safety measures as well as form stronger actions against all such criminals.

The case in question has a hacker named Joel Ortiz, merely 20 years old, stealing a huge cryptocurrency amount of 5 million dollars from 40 people through the latest popular technique called SIM Swapping. As per the reports published in Motherboard on February 1, Ortiz has not only confessed about his crime but has also accepted the plea agreement requiring him to spend ten years in the prison.

Although Ortiz has given his consent on the plea agreement last week itself, the official sentencing will be done only on March 14, 2019. This development is confirmed by Erin West who holds the post of Deputy District Attorney in California’s Santa Clara County. Apparently, Ortiz is the first-ever individual to have received such a conviction for a crime like SIM swapping as stated by the authorities.

One of the investigating agents in the Ortiz case named Samy Tarazi exclaimed that their team strongly thought justice, in this case, had been well served. He also added saying how they hoped that Ortiz’s conviction would act as a powerful message to the entire such community leaving them with zero roads of getting away from these types of crimes.

SIM swapping has been gaining momentum since quite some time now. The hackers are extensively relying on this hack to loot digital currency like crypto or even fiat money in addition to stealing the victim’s social media handles and email accounts. Once hacked, the criminal doesn’t shy away from sharing and selling the victim’s private information and data in the black market. Reportedly, the hackers instantaneously make thousands of dollars in bitcoins by selling the data.

The now popular SIM swapping technique has the hackers posed as the victim that they’re targeting and contact the telecom companies asking them to port their number to a fresh SIM card, citing SIM loss as their reason to do so. The smart hackers easily convince the telecom companies by providing all the proofs of identity, address or even social security number of the victim.

Upon verification when the telecom companies complete the number transfer process, hackers initiate the procedure of invading the victim’s accounts. For account accessibility, the proficient hackers utilize the phone recovery method, bypassing the traditional step-by-step account verification procedures.

If we go by one such hacker’s statement, it is easier to access every account of any individual in minutes simply through their phone number. And the catch is the concerned person can do nothing about it at all.

The previous year had seen officials taking stringent actions against the crypto criminals across the world, putting them behind bars for their crimes. The similar outlook will be continued this year as well.

Justin Lebron20-Year Old Hacker Pleads Guilty to $5 Million Cryptocurrency Theft
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