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Tag: company activities and management

  • Indiana’s recycling plant fire is mostly out, but evacuations remain as crews monitor air quality and clear debris from schools and homes | CNN

    Indiana’s recycling plant fire is mostly out, but evacuations remain as crews monitor air quality and clear debris from schools and homes | CNN

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    CNN
     — 

    A fire burning at a recycling plant in Richmond, Indiana, is mostly out, but hundreds remain evacuated from their homes as crews monitor the air for chemicals and collect potentially harmful debris from neighboring schools and homes, officials said Saturday.

    Richmond residents who live within a half a mile radius of the recycling plant – about 2,000 of Richmond’s 35,000 residents – have been under a mandatory evacuation order since Tuesday, when the massive inferno exploded at the plastic-filled recycling plant in Richmond, sending thick, black smoke over the area.

    When they can return home will mainly depend on whether it’s safe to breathe the air in their community. Officials had warned that the smoke the fire spawned was “definitely toxic,” forcing the closure of Richmond public schools for days as the US Environmental Protection Agency performed air sampling and monitoring tests in the area.

    An announcement was initially expected Saturday on when evacuation orders could be lifted, but Richmond city officials later said that no determination had been made. “We have another meeting in the morning to determine the best time to lift the evacuation order,” Mayor Dave Snow said Saturday evening.

    “Unfortunately, we are unable to provide an exact time when evacuation orders will be lifted. As air monitoring results come back from lab testing and they can be analyzed by our health experts, we are hoping to be able to allow residents to return to their homes,” Wayne County Emergency Management Agency officials said Saturday.

    Those downwind from the fire were asked to continue to shelter in place “if they feel they are in danger or find themselves in a smoke plume,” emergency officials said.

    More meetings and data analysis are needed before the evacuation order can be lifted, Richmond Fire Chief Tim Brown told CNN Saturday.

    As for the blaze itself, Brown said firefighters have knocked down 98-99% of the fire at the recycling plant as of Saturday.

    “Right now, there is no plume, there is no product being off-gassed from the fire itself,” Brown told CNN. “What we have coming off of it is mainly a white smoke or some steam. We have no plume. We have a slight wind, which is kind of pushing things out.”

    Inside the facility, there are hot spots and occasional small fires that will continue to smolder for days and produce smoke, soot or the smell of burnt plastic, emergency officials said.

    In the meantime, work is underway to clear debris scattered in the community from the toxic fire.

    Some samples of debris from the area tested positive for asbestos containing materials, Wayne County emergency officials said, citing preliminary tests by the EPA.

    “Because all debris has the potential to contain asbestos, it is important that a trained professional remove all materials suspected to be from the fire,” emergency officials said, asking residents to not disturb or touch any debris they find on their property.

    Asbestos is a naturally occurring, but very toxic, substance that was once widely used for insulation. When inhaled or ingested, asbestos fibers can become trapped in the body, and may eventually cause genetic damage to the body’s cells. Exposure may also cause mesothelioma, a rare and aggressive form of cancer.

    Crews in protective gear began collecting debris from three schools near the fire site on Saturday, including three in Richmond and one school in Ohio.

    Officials said that schools impacted with debris will be cleared first, and then contractors will begin to deploy drones to search rooftops for additional debris, according to the post.

    “After school grounds are cleared, these contractors will begin removing debris from residential properties, parks and/or public areas, and businesses,” city officials say in the post.

    The county said the EPA is bringing in federal contractors to assist with the proper cleanup and removal of visible debris in both Indiana and Ohio.

    A primary health concern to residents is particulate matter, which could cause respiratory problems if inhaled, Christine Stinson, who heads the Wayne County Health Department, previously said.

    At the fire zone’s center, the chemicals hydrogen cyanide, benzene, chlorine, carbon monoxide and volatile organic compounds, or VOCs, were detected, the EPA said Friday. They were not detected outside the evacuation zone, the agency said.

    Potentially harmful VOCs also were found in six air samples, the agency said, without saying where the samples were taken.

    Particulate matter also was found inside and outside the half-mile evacuation zone, as expected, the agency said.

    Additionally, one of two air samples taken a little more than a mile from the fire site detected chrysotile asbestos in debris, an EPA official said Thursday. Also called white asbestos, chrysotile asbestos can cause cancer and is used in products from cement to plastics to textiles.

    As for water quality, testing downstream of the fire site is underway and officials say they have “not found anything of immediate alarm, including any sign of fish kills.”

    Crews did find some ash and loose plastic debris, “but weir booms have been installed and are successfully capturing this material. Likewise, Indiana American Water has also been closely monitoring the drinking water and has reported no unusual readings or results from testing,” Wayne County emergency officials said.

    The cause of the fire remains under investigation and likely won’t be known for weeks, officials said. But local leaders have shared concerns since at least 2019 that the facility had hazards and building code violations, records show.

    The mayor has accused the plant’s owner of ignoring a city order to clean up the property, saying the plant was a fire hazard.

    CNN has sought comment from the plant’s owner, Seth Smith. The attorney who previously represented Smith in a related lawsuit declined to comment.

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  • Walmart’s US chief marketing officer stepping down as retailer warns of tough year | CNN Business

    Walmart’s US chief marketing officer stepping down as retailer warns of tough year | CNN Business

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    New York
    CNN
     — 

    Walmart’s chief merchandising officer for its US operations is stepping down from the job as the retailer faces a tougher year ahead, an internal memo shared to US associates Friday said.

    Charles Redfield, whose career at Walmart spanned 32 years, will transition on May 1 and remain in an advisory role. In a memo viewed by CNN Business, Walmart U.S. CEO John Furner said Redfield wants to spend more time with his family.

    Redfield held his position at the retailer for a little more than a year, beginning in January 2022.

    The leadership shakeup comes after America’s largest retailer warned it is facing a more challenging year ahead and will approach 2023 with caution.

    Despite a strong holiday season, Walmart forecast slower sales and profit growth in February. Its strong holiday sales were fueled by groceries. Grocery prices rose 11.8% annually in December, pushing customers toward more affordable options.

    However, sales were slower for traditional holiday products like toys, electronics and clothing – a sign that consumers are cutting back on discretionary spending.

    Walmart did see an 8.3% sales increase during its latest quarter ended January 31 at US stores open for at least one year. More customers are buying its private label brands and more higher-income households are shopping at its stores, the company said.

    “The consumer is still very pressured,” Walmart CFO John Rainey told CNBC. “And if you look at economic indicators, balance sheets are running thinner and savings rates are declining relative to previous periods. And so that’s why we take a pretty cautious outlook on the rest of the year.”

    The retail industry in general is expected to face challenges this year after sluggish holiday sales.

    Redfield is a Walmart veteran. He began his career as a Sam’s Club cashier while attending the University of Arkansas. He became assistant manager with Sam’s Club and worked his way up the ladder.

    “There are merchants, and then there’s our Chief Merchandising Officer Charles Redfield,” CEO John Furner said in a memo viewed by CNN Business. “I could probably stop there and many associates across our businesses and the retail industry would know exactly what I mean.”

    Redfield became CMO for Asda, Walmart’s UK subsidiary, in 2010. In 2012, he was named executive vice president of merchandising for Sam’s Club and named executive vice president of food for Walmart U.S. in 2015.

    The Wall Street Journal first reported the departure.

    Furner said the company will be announcing a new CMO soon.

    This week, Walmart said it was selling its trendy menswear brand, Bonobos, at a steep loss, to management firm WHP Global and retailer Express Inc. for $75 million. Walmart acquired the brand in 2017 for $310 million.

    In a note, Neil Saunders, managing director of consultancy GlobalData, wrote that discounted price for Bonobos “reflects the current weaker outlook across retail, but some is also the result of Walmart not having done much to develop the brand over the past six years.”

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  • So this is how the Tupperware party ends | CNN Business

    So this is how the Tupperware party ends | CNN Business

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    New York
    CNN
     — 

    Tupperware, an iconic brand that’s woven into the fabric of post World War II America, signaled this week that it could be on its last gasp.

    Known the world over for its plastic food storage containers and its sales parties, Florida-based Tupperware warned that the company was running out of cash and needed additional money – soon – to say in operation.

    In some ways, the 77-year-old brand is still a titan: It’s, literally, a household name, and its vivid juice- and fruit-colored products are for sale in nearly 70 countries. It pulled in annual sales of $1.3 billion in 2021. But that’s down 18.7% from a year ago.

    Last October, in a massive shift in its business model, Tupperware rolled out its containers in brighter hues of red, purple and green onto Target shelves nationwide.

    But it may be too little, too late.

    Experts say this is what happens when a once-pioneering brand, beloved by families through generations, is unable to adapt to an evolving marketplace, brutal competition and attitudes and needs of younger consumers.

    “Tupperware was a disruptor in the market and in households nationwide when its plastic storage containers launched in 1946,” said Venkatesh Shankar, professor of marketing and ecommerce at Texas A&M University’s Mays Business School.

    “The company also had tremendous cultural impact. The famous neighborhood house parties where Tupperware products were sold by the host to her family and friends was a new way of marketing, combining socializing with direct sales.”

    But while the company reaped the benefits of its innovative approach for years, it ultimately couldn’t keep pace with changing times.

    History has shown, said Shankar, that nostalgia usually isn’t enough to sustain legacy brands.

    Whether or not Tupperware survives as a business, its rich history will likely endure, said William Keep, professor of marketing at the College of New Jersey School of Business.

    “I’ve been married for 50 years and we still have and use our Tupperware from when we married. Tupperware was something people gave as gifts at weddings and baby showers,” said Keep. “Clearly its a brand that focused on two things, quality and for much of its history, women.”

    Tupperware is named after Earl Tupper, a chemist in the 1940s who created lightweight, non-breakable plastic containers inspired by the seal-tight design of paint cans. The purpose was to help families save money on costly food waste in the post-war era.

    The most significant aspect of the invention was a first-of-its-kind “burping seal.” The older models of Tupperware containers would make a burp-like sound when air was let out from under the lid before it was firmly pressed and closed for an air-tight lock.

    But Tupperware products didn’t sell well in stores when they launched, according to the company, because consumers weren’t sure how to use the (back then) white and off-white containers.

    Tupperware house parties were the only way to buy the brand's plastic food containers. The parties were hosted by women in their homes and were both popular social and marketing events. (circa 1950)

    That conundrum led to an idea to demonstrate the product, which then evolved into the famous Tupperware house parties.

    The practice dove-tailed brilliantly with the rise of post-war suburbia: women had bigger homes, bigger kitchens, more money to spend, more children to feed and more responsibilities to keep house.

    Into that climate came Tupperware. Its first milky-white plastic product, the “Wonder Bowl,” cost 39 cents, according to Smithsonian Magazine; the museum has a huge Tupperware collection. Over the years, tangerine orange, baby blue and pink and kiwi green products followed.

    Tupperware parties became popular social and marketing events in the 1950s and 60s.

    The parties were much more than just a show-and-tell, said Bob Kealing, a Tupperware scholar and author of two books on the brand.

    These were glamorous affairs, akin to an afternoon tea party, where women dressed up because the parties were a feminized, soft-sell approach to selling plastic products.

    “Women wore beautiful dresses, heels, gloves. They wanted to present an upscale version of themselves because these were also events where women were recruited into the Tupperware sales force,” he said. The parties gained traction also because they were one of the few socially acceptable ways for women to make money at the time.

    Tupperware products were the centerpiece of the event, carefully stacked and presented to be shown off. “The parties were designed to be fun social gatherings,” including games and prizes, he said, and the most successful Tupperware saleswomen were sometimes rewarded with diamond rings.

    While Tupperware wasn’t the first to pioneer the direct sales model, it did scale it up in size and opportunity for women, said Tracey Deutsch, associate professor, department of history of history at University of Minnesota College of Liberal Arts.

    Tupperware’s success, said Deutsch also coincided with the expansion of suburbs across the country.

    Earl Tupper, seen here in the photo, hired Brownie Wise, a Tupperware house party hostess, as his vice president of marketing in 1951.

    “Not only did women need the space to hold the Tupperware parties but also space in the kitchen to store these containers,” she said. “And it was also dependent on a certain level of household well-being. You needed to have enough food to require these storage containers.”

    Brownie Wise was perhaps the most famous Tupperware hostess of them all. Wise, a divorced single mother living in Florida, held her own Tupperware parties in the 1940s and 50s and became a budding entrepreneur. Tupper himself took notice.

    He eventually hired Wise as his vice president of marketing, an unprecedented role for women back then.

    Kealing, author of “”Life of the Party: The Remarkable Story of How Brownie Wise Built, and Lost, a Tupperware Part Empire,” said Wise became the face of the brand and was very good at it.

    “It was great marketing and the media ate it up,” he said. But she was ultimately fired by Tupper in 1957. “Tupper… saw how the brand was becoming more about her,” said Kealing.

    Traditionally, parties were the only way you could buy Tupperware. Over time, the parties became ubiquitous both in suburban and city dwellings. As the company grew, its fleet of hostesses ballooned into a global direct sales force of nearly 3 million in 2019.

    More recently, the brand was on a quest to grab the attention of Millennials and Gen Zers and become as relevant in their everyday lives as it was for their grandmas and moms.

    That meant shedding the throwback to its “Mad Men” era image, and positioning Tupperware products as buzz-worthy, higher quality and more durable than rivals, high-utility and with an environmentally-friendly purpose.

    Tupperware had to go beyond parties or sales on its own website and the brief and limited pilot programs it had tried with retailers HomeGoods, Bed Bath and Beyond, plus an earlier pilot attempt at Target itself.

    Tupperware rolled its products into Target stores nationwide in 2022, marking a significant shift in the company's decades-long direct sales strategy.

    The shift in strategy came too late. “We’ve seen this happen with Toys ‘R’ Us, Twinkie, most recently Bed Bath & Beyond,” said Shankar.

    Tupperware, he said, is facing a perfect storm of stiff competition from other brands – Rubbermaid, Glad, Pyrex, Oxo and Ziploc – selling similar products or even disposable versions for less, lack of interest from younger shoppers and lack of exciting new products and strategies to sell them.

    “Millennials, and Gen Zers especially probably aren’t aware of its iconic status and really don’t have a reason to give it another chance,” said Shankar.

    “In my mind, the company made two critical errors,” said Keep, professor of marketing at the College of New Jersey School of Business.

    “With product, it lost ground to competitors”, said Keep. “Tupperware also consciously didn’t walk away from direct selling even as these multilevel marketing strategies stagnated in the 80s and 90s. When it was clear that model was no longer working, the company should have given up on direct sales and sold through retailers.”

    Bankruptcy could be a path forward for Tupperware, said John Talbott, Director at the Center for Education and Research in Retail at Indiana University’s Kelley School of Business.

    “The most valuable thing Tupperware owns is its brand. Like Blockbuster, the Tupperware brand will never go away,” he said. “I suspect it could file for bankruptcy and if there is a buyer for it, Target would be a great option to revive the brand with new designs and a new marketing plan.”

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  • Silicon Valley Bank collapse renews calls to address disparities impacting entrepreneurs of color | CNN Business

    Silicon Valley Bank collapse renews calls to address disparities impacting entrepreneurs of color | CNN Business

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    CNN
     — 

    When customers at Silicon Valley Bank rushed to withdraw billions of dollars last month, venture capitalist Arlan Hamilton stepped in to help some of the founders of color who panicked about losing access to payroll funds.

    As a Black woman with nearly 10 years of business experience, Hamilton knew the options for those startup founders were limited.

    SVB had a reputation for servicing people from underrepresented communities like hers. Its failure has reignited concerns from industry experts about lending discrimination in the banking industry and the resulting disparities in capital for people of color.

    Hamilton, the 43-year-old founder and managing partner of Backstage Capital, said that when it comes to entrepreneurs of color, “we’re already in the smaller house. We already have the rickety door and the thinner walls. And so, when a tornado comes by, we’re going to get hit harder.”

    Established in 1983, the midsize California tech lender was America’s 16th largest bank at the end of 2022 before it collapsed on March 10. SVB provided banking services to nearly half of all venture-backed technology and life-sciences companies in the United States.

    Hamilton, industry experts and other investors told CNN the bank was committed to fostering a community of minority entrepreneurs and provided them with both social and financial capital.

    SVB regularly sponsored conferences and networking events for minority entrepreneurs, said Hamilton, and it was well known for funding the annual State of Black Venture Report spearheaded by BLK VC, a nonprofit organization that connects and empowers Black investors.

    “When other banks were saying no, SVB would say yes,” said Joynicole Martinez, a 25-year entrepreneur and chief advancement and innovation officer for Rising Tide Capital, a nonprofit organization founded in 2004 to connect entrepreneurs with investors and mentors.

    Martinez is also an official member of the Forbes Coaches Council, an invitation-only organization for business and career coaches. She said SVB was an invaluable resource for entrepreneurs of color and offered their clients discounted tech tools and research funding.

    Minority business owners have long faced challenges accessing capital due to discriminatory lending practices, experts say. Data from the Small Business Credit Survey, a collaboration of all 12 Federal Reserve banks, shows disparities on denial rates for bank and nonbank loans.

    In 2021, about 16% of Black-led companies acquired the total amount of business financing they sought from banks, compared to 35% of White-owned companies, the survey shows.

    “We know there’s historic, systemic, and just blatant racism that’s inherent in lending and banking. We have to start there and not tip-toe around it,” Martinez told CNN.

    Asya Bradley is an immigrant founder of multiple tech companies like Kinley, a financial services business aiming to help Black Americans build generational wealth. Following SVB’s collapse, Bradley said she joined a WhatsApp group of more than 1,000 immigrant business founders. Members of the group quickly mobilized to support one another, she said.

    Immigrant founders often don’t have Social Security numbers nor permanent addresses in the United States, Bradley said, and it was crucial to brainstorm different ways to find funding in a system that doesn’t recognize them.

    “The community was really special because a lot of these folks then were sharing different things that they had done to achieve success in terms of getting accounts in different places. They also were able to share different regional banks that have stood up and been like, ‘Hey, if you have accounts at SVB, we can help you guys,’” Bradley said.

    Many women, people of color and immigrants opt for community or regional banks like SVB, Bradley says, because they are often rejected from the “top four banks” — JPMorgan Chase, Bank of America, Wells Fargo and Citibank.

    In her case, Bradley said her gender might have been an issue when she could only open a business account at one of the “top four banks” when her brother co-signed for her.

    “The top four don’t want our business. The top four are rejecting us consistently. The top four do not give us the service that we deserve. And that’s why we’ve gone to community banks and regional banks such as SVB,” Bradley said.

    None of the top four banks provided a comment to CNN. The Financial Services Forum, an organization representing the eight largest financial institutions in the United States has said the banks have committed millions of dollars since 2020 to address economic and racial inequality.

    Last week, JPMorgan Chase CEO Jamie Dimon told CNN’s Poppy Harlow that his bank has 30% of its branches in lower-income neighborhoods as part of a $30 billion commitment to Black and Brown communities across the country.

    Wells Fargo specifically pointed to its 2022 Diversity, Equity, and Inclusion report, which discusses the bank’s recent initiatives to reach underserved communities.

    The bank partnered last year with the Black Economic Alliance to initiate the Black Entrepreneur Fund — a $50 million seed, startup, and early-stage capital fund for businesses founded or led by Black and African American entrepreneurs. And since May 2021, Wells Fargo has invested in 13 Minority Depository Institutions, fulfilling its $50 million pledge to support Black-owned banks.

    Black-owned banks work to close the lending gap and foster economic empowerment in these traditionally excluded communities, but their numbers have been dwindling over the years, and they have far fewer assets at their disposal than the top banks.

    OneUnited Bank, the largest Black-owned bank in the United States, manages a little over $650 million in assets. By comparison, JPMorgan Chase manages $3.7 trillion in assets.

    Because of these disparities, entrepreneurs also seek funding from venture capitalists. In the early 2010s, Hamilton intended to start her own tech company — but as she searched for investors, she saw that White men control nearly all venture capital dollars. That experience led her to establish Backstage Capital, a venture capital fund that invests in new companies led by underrepresented founders.

    “I said, ‘Well, instead of trying to raise money for one company, let me try to raise for a venture fund that will invest in underrepresented — and now we call them underestimated — founders who are women, people of color, and LGBTQ specifically,’ because I am all three,” Hamilton told CNN.

    Since then, Backstage Capital has amassed a portfolio of nearly 150 different companies and has made over 120 diversity investments, according to data from Crunchbase.

    But Bradley, who is also an ‘angel investor’ of minority-owned businesses, said she remains “really hopeful” that community banks, regional banks and fintechs “will all stand up and say, ‘Hey, we are not going to let the good work of SVB go to waste.’”

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  • Ohio GOP businessman Moreno files for Senate bid | CNN Politics

    Ohio GOP businessman Moreno files for Senate bid | CNN Politics

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    CNN
     — 

    Bernie Moreno, a wealthy Ohio businessman, has filed paperwork to run for Senate in 2024 and challenge Democratic Sen. Sherrod Brown in what’s likely to be one of the most competitive races of the upcoming cycle.

    Moreno is now the second Republican to officially jump into the race after state Sen. Matt Dolan announced his candidacy in January.

    Moreno mounted an unsuccessful campaign for Senate in 2022, loaning his campaign millions from his personal fortune before dropping out of the race ahead of the primary. His decision to drop out came after a meeting with former President Donald Trump, who would go on to endorse one of his rivals, J.D. Vance.

    The Cleveland businessman’s entry into the 2024 race sets up another potentially expensive and contentious primary in the state after the 2022 contest, which was driven by several self-funding candidates, was one of the costliest that year.

    Other potential candidates who have expressed interest include 8th district Rep. Warren Davidson and Secretary of State Frank La Rose.

    Brown is one of several vulnerable Democrats who the party is defending as it seeks to hold its slim majority in the upper chamber. Trump carried the state in 2016 and 2020, and Vance won the 2022 race by nearly 7 points despite a spirited challenge by Democratic Rep. Tim Ryan.

    Still, Brown, seeking his fourth term, won his last race in 2018 by nearly 7 points, bolstering Democratic hopes that they can hang on in a state that has trended increasingly Republican over the last several election cycles. And Brown had more than $3.4 million stockpiled in Senate campaign account as of the end of last year.

    Democrats, though, will be pressed to defend Brown amid a challenging map that includes other incumbents in similarly vulnerable positions, such as Sen. Joe Manchin in West Virginia and Sen. Jon Tester in Montana, along with an unpredictable three-way race in Arizona.

    CORRECTION: This story has been updated to reflect that former President Donald Trump endorsed JD Vance in the 2022 Ohio Senate race after a meeting with Bernie Moreno.

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  • What markets are watching after digesting the US jobs data | CNN Business

    What markets are watching after digesting the US jobs data | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    In an unusual coincidence, the US jobs report was released on a holiday Friday — meaning stock markets were closed when the closely-watched economic data came out.

    It was the first monthly payroll report since Silicon Valley Bank and Signature Bank collapsed. It also marked a full year of jobs data since the Federal Reserve began hiking interest rates in March 2022.

    While inflation has come down and other economic data point to a cooling economy, the labor market has remained remarkably resilient.

    Investors have had a long weekend to chew over the details of the report and will likely skip the typical gut-reaction to headline numbers.

    What happened: The US economy added 236,000 jobs in March, showing that hiring remained robust though the pace was slower than in previous months. The unemployment rate currently stands at 3.5%.

    Wages increased by 0.3% on the month and 4.2% from a year ago. The three-month wage growth average has dropped to 3.8%. That’s moving closer to what Fed policymakers “believe to be in line with stable wage and inflation expectations,” wrote Joseph Brusuelas, chief economist at RSM in a note.

    “That wage data tends to suggest that the risk of a wage price spiral is easing and that will create space in the near term for the Federal Reserve to engage in a strategic pause in its efforts to restore price stability,” he added.

    The March jobs report was the last before the Fed’s next policy meeting and announcement in early May. The labor market is cooling but not rapidly or significantly, and further rate hikes can’t be ruled out.

    At the same time Wall Street is beginning to see bad news as bad news. A slowing economy could mean a recession is forthcoming.

    Markets are still largely expecting the Fed to raise rates by another quarter point. So how will they react to Friday’s report?

    Before the Bell spoke with Michael Arone, State Street Global Advisors chief investment strategist, to find out.

    This interview has been edited for length and clarity.

    Before the Bell: How do you expect markets to react to this report on Monday?

    Michael Arone: I think that this has been a nice counterbalance to the weaker labor data earlier last week and all the recession fears. This data suggests that the economy is still in pretty good shape, 10-year Treasury yields increased on Friday indicating there’s less fear about an imminent recession.

    There’s this delicate balance between slower job growth and a weaker labor market without economic devastation. I think this report helps that.

    As it relates to the stock market, I would expect the cyclical sectors to do well — your industrials, your materials, your energy companies. If interest rates are rising, that’s going to weigh on growth stocks — technology and communication services sectors, for example. Less recession fears will mean investors won’t be as defensively positioned in classic staples like healthcare and utilities.

    Could this lead to a reverse in the current trend where tech companies are bolstering markets?

    Yes, exactly. It’s difficult to make too much out of any singular data point, but I think this report will hopefully lead to broader participation in the stock market. If those recession fears begin to abate somewhat, and investors recognize that recession isn’t imminent, there will be more investment.

    What else are investors looking at in this report?

    We’ve seen weakness in the interest rate sensitive parts of the market — areas that are typically the first to weaken as the economy slows down. So things like manufacturing, things like construction. That’s where the weakness in this jobs report is. And the services areas continue to remain strong. That’s where the shortage of qualified skilled workers remains. I think that you’re seeing continued job strength in those areas.

    What does this mean for this week’s inflation reports? It seems like the jobs report just pushed the tension forward.

    it did. I expect that inflation figures will continue to decelerate — or grow at a slower rate. But I do think that the sticky part of inflation continues to be on the wage front. And so I think, if anything, this helps alleviate some of those inflation pressures, but we’ll see how it flows through into the CPI report next week. And also the PPI report.

    Is the Federal Reserve addressing real structural changes to the labor market?

    The Fed was confused in February 2020 when we were in full employment and there was no inflation. They’re equally confused today, after raising rates from zero to 5%, that we haven’t had more job losses.

    I’m not sure why, but from my perspective, the Fed hasn’t taken into consideration the structural changes in the labor force, and they’re still confused by it. I think the risk here is that they’ll continue to focus on raising rates to stabilize prices, perhaps underestimating the kind of structural changes in the labor economy that haven’t resulted in the type of weakness that they’ve been anticipating. I think that’s a risk for the economy and markets.

    A few weeks ago, Before the Bell wrote about big problems brewing in the $20 trillion commercial real estate industry.

    After decades of thriving growth bolstered by low interest rates and easy credit, commercial real estate has hit a wall. Office and retail property valuations have been falling since the pandemic brought about lower occupancy rates and changes in where people work and how they shop. The Fed’s efforts to fight inflation by raising interest rates have also hurt the credit-dependent industry.

    Recent banking stress will likely add to those woes. Lending to commercial real estate developers and managers largely comes from small and mid-sized banks, where the pressure on liquidity has been most severe. About 80% of all bank loans for commercial properties come from regional banks, according to Goldman Sachs economists.

    Since then, things have gotten worse, CNN’s Julia Horowitz reports.

    In a worst-case scenario, anxiety about bank lending to commercial real estate could spiral, prompting customers to yank their deposits. A bank run is what toppled Silicon Valley Bank last month, roiling financial markets and raising fears of a recession.

    “We’re watching it pretty closely,” said Michael Reynolds, vice president of investment strategy at Glenmede, a wealth manager. While he doesn’t expect office loans to become a problem for all banks, “one or two” institutions could find themselves “caught offside.”

    Signs of strain are increasing. The proportion of commercial office mortgages where borrowers are behind with payments is rising, according to Trepp, which provides data on commercial real estate.

    High-profile defaults are making headlines. Earlier this year, a landlord owned by asset manager PIMCO defaulted on nearly $2 billion in debt for seven office buildings in San Francisco, New York City, Boston and Jersey City.

    Dig into Julia’s story here.

    Tech stocks led market losses in 2022, but seemed to rebound quickly at the start of this year. So as we enter earnings season, what should we expect from Big Tech?

    Daniel Ives, an analyst at Wedbush Securities, says that he has high hopes.

    “Tech stocks have held up very well so far in 2023 and comfortably outpaced the overall market as we believe the tech sector has become the new ‘safety trade’ in this overall uncertain market,” he wrote in a note on Sunday evening.

    Even the recent spate of layoffs in Big Tech has upside, he wrote.

    “Significant cost cutting underway in the Valley led by Meta, Microsoft, Amazon, Google and others, conservative guidance already given in the January earnings season ‘rip the band- aid off moment’, and tech fundamentals that are holding up in a shaky macro [environment] are setting up for a green light for tech stocks.”

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  • Video: A pause on AI development, why it’s the worst time to buy a car in decades on CNN Nightcap | CNN Business

    Video: A pause on AI development, why it’s the worst time to buy a car in decades on CNN Nightcap | CNN Business

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    The dangers of AI, the worst time to buy a car in decades, and the next Elizabeth Holmes?

    NYU’s Gary Marcus tells “Nightcap’s” Jon Sarlin why he signed an open letter calling for a six-month pause on AI development. Plus, CNN’s Peter Valdes-Dapena explains why car prices may never go back to where they were pre-Covid. And Forbes’ Alexandra Levine details the arrest of Charlie Javice, the 31-year-old fintech founder who sold her company to JPMorgan and now stands accused of fraud. To get the day’s business headlines sent directly to your inbox, sign up for the Nightcap newsletter.

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  • Cineworld shares tank after Regal Cinemas owner ditches plans to sell US and UK businesses | CNN Business

    Cineworld shares tank after Regal Cinemas owner ditches plans to sell US and UK businesses | CNN Business

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    London
    CNN
     — 

    Shares in Cineworld plunged more than 30% Monday, hitting their lowest level since late August, after the owner of Regal Cinemas said it planned to terminate efforts to sell its US, UK and Irish businesses.

    The world’s second-largest movie theater chain also announced a debt restructuring plan with lenders to help it exit bankruptcy. The deal does not provide for any recovery of funds for shareholders, the company said in a statement.

    “This agreement with our lenders represents a ‘vote of confidence’ in our business and significantly advances Cineworld towards achieving its long-term strategy in a changing entertainment environment,” said CEO Mooky Greidinger.

    Cineworld — which, like many cinema operators, was hit hard by the pandemic — filed for Chapter 11 bankruptcy protection in September. Over the past year, the company’s shares have lost more than 93% of their value.

    Under the proposed debt restructuring, lenders will reduce Cineworld’s debt pile by $4.5 billion and receive equity in the reorganized group; provide $1.46 billion in new debt; and backstop a $800 million share issue.

    The company said it had received offers for its businesses in other parts of the world and was considering them. In addition to the United States, the United Kingdom and Ireland, Cineworld operates cinemas in Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Israel.

    It will abandon plans to sell its US, UK and Ireland arms unless it receives an “all-cash bid” significantly higher than the current value of the businesses.

    The British company continues to operate its theaters around the world. After two rounds of closures in the United States, around 500 Cineworld theaters remain across the country.

    The company said in February that it expected shareholders to be wiped out entirely by the bankruptcy process, even in the event of a sale of some of its businesses.

    The pandemic forced movie theaters around the globe to close, dealing a devastating blow to Cineworld and others in the industry, and it is still affecting visitor numbers. Cineworld lost $2.7 billion in 2020 and another $566 million in 2021. It reported another loss, of $294 million, in the six months ending in June 2022.

    Cinema operators are coming up with creative ways to claw back revenue. Cineworld’s larger rival AMC Theaters announced recently that it would price tickets based on seat location, charging extra for more desirable seats in the middle of a theater.

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  • Tesla sales again fall short of production | CNN Business

    Tesla sales again fall short of production | CNN Business

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    New York
    CNN
     — 

    Tesla reported a modest 4% rise in sales in the first quarter compared to the final three months of last year, despite a series of price cuts on its lower priced vehicles and talk by CEO Elon Musk about strong demand at those lower prices.

    The first quarter also marked the fourth straight quarter that Tesla has produced more vehicles than it has delivered to customers. Some of that may be due to the ramp up in production at two new factories, one in Texas, the other in Germany, which opened last spring, and a lag between that increased production and sales.

    Tesla said there was an increase in the number of its more expensive models, the Model S and Model X, in transit to Europe, the Middle East and Africa, as well as to the Asia Pacific region.

    But it does mean that over the last 12 months Tesla has produced 78,000 more cars than it has sold, suggesting that talk of strong demand by Tesla executives may not be backed up by the numbers.

    “Early this year, we had a price adjustment. After that, we actually generated a huge demand, more than we can produce, really,” said Tom Zhu, Tesla’s executive in charge of global production and sales. “And as Elon said, as long as you offer a product with value at affordable price, you don’t have to worry about demand.”

    The company reported it completed sales of 422,875 vehicles in the quarter. That’s short of the forecast of 430,000 vehicles from analysts surveyed by Refinitiv. But Dan Ives, tech analyst for Wedbush Securities, said the consensus that Wall Street was looking for was deliveries of 421,500, which would mean a very narrow beat for Tesla.

    Even Ives, a bull on Tesla stock, said the lower prices that Tesla got for cars in the quarter will mean tighter profit margins going forward. Tesla will report full first quarter financial results on April 19.

    “The big question will be margins as cutting prices will have an impact on this front,” he said in a note to clients Sunday.

    First quarter production was up only 0.2% from the final three months of 2022, despite it efforts to ramp up production in Germany and Texas.

    Production and sales were up much more when compared to the first quarter of 2022, with production up 44% and deliveries up 36%. But even that suggests that Tesla is below the 50% annual growth target it has set for the company long term.

    Shares of Tesla

    (TSLA)    , which fell 65% in 2022 for its worst annual performance ever, closed Friday up 68% so far in 2023. Still that left shares off 41% from where they stood at the end of 2021.

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  • This is one of the worst times to buy a car in decades. 3 charts explain why | CNN Business

    This is one of the worst times to buy a car in decades. 3 charts explain why | CNN Business

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    CNN
     — 

    It has almost never been as hard to buy a new or used car in the United States as it is today, despite improving supply issues and inflation beginning to steady.

    Vehicle transaction prices — the price you actually end up paying after any dealer discounts or markups — have been climbing higher and faster since 2020 than any other point in more than 35 years, according to recent data from the Bureau of Labor Statistics.

    The consumer price indexes for both new and used cars — the average changes in vehicle transaction price over time — are much higher than they were four years ago in 2019.

    There is a silver lining. BLS data shows inflation for used cars has been cooling down just as dramatically since December 2022 as it increased in the months before that. But used cars have a long way to go before approaching 2019 sales prices and new car prices have yet to slow down.

    The average transaction price of a new car has jumped nearly $12,000 in the past five years, according to data from auto website Edmunds.com. For used cars, the average transaction price is still nearly $9,000 higher than it was in February 2018.

    “[Prices are] coming down a bit, but not coming down nearly as fast as one would hope,” said Ivan Drury, the director of insights at Edmunds.com. “If you look back, or if you’ve ever done a transaction before in your life, all of these numbers are bad.”

    Car buyers haven’t seen price hikes like these since the 1970s and 80s. What makes the 2020s unique is how much car prices rose in a short period of time. Over the used car market’s worst 12 months of the pandemic, the index rose 45%. There’s never been a 12-month period since the BLS began keeping records in 1947 when used car prices have inflated more.

    Recent trends in prices have been similar across regions of the United States, though in some areas, the starting prices may be higher than others. Preferences for more expensive vehicles in some areas drive these regional differences, Drury said.

    There’s a large market for pickup trucks and SUVs in the south, he said, where BLS data shows new car transaction prices have risen the most since 1987.

    The average price of a large pickup truck nationwide was $62,430 in 2022, according to Edmunds.com. The average midsize car price was only $31,381.

    The road to more reasonable prices for new and used cars remains littered with potholes.

    Consumer tastes have shifted towards larger and more expensive pickup trucks and SUVs. New car buyers are loading up on options, compared to more stripped-down models available a few years ago. Both of these trends drive up prices and also create incentive for automakers to produce pricier rides. The used market is still affected by the decline in leasing trade-ins and rental car companies competing with consumers for the same limited supply of three to five-year-old vehicles.

    “We’ve got a few things that are really hindering the US market,” Drury said. “I don’t see those going away anytime soon.”

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  • Kakao wins control of K-pop powerhouse SM Entertainment | CNN Business

    Kakao wins control of K-pop powerhouse SM Entertainment | CNN Business

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    Hong Kong/Seoul
    CNN
     — 

    South Korean internet company Kakao has become the largest shareholder of SM Entertainment, winning a battle for control of one of the country’s most iconic music agencies.

    Kakao and its entertainment unit have increased their stake in SM to 39.9%, they said in a Tuesday regulatory filing. Previously, the firm had held 4.9% of SM.

    Kakao purchased the additional shares for about 1.25 trillion Korean won ($963 million) through a tender offer launched earlier this month.

    In securing a controlling stake, Kakao has seen off rival HYBE, South Korea’s top music agency and home to boy band sensation BTS, after a bruising takeover battle.

    In a separate Tuesday filing, HYBE said it had sold some of its SM shares to Kakao, reducing its stake to 8.8%.

    Kakao CEO Hong Eun-taek acknowledged the acquisition, telling shareholders Tuesday that the companies would work to combine the strengths of Kakao’s tech expertise and SM’s intellectual property and production skills “to expand our collective growth.”

    “After the swift and amicable completion of the acquisition, we will form the business cooperation plans between Kakao, Kakao Entertainment and SM Entertainment, and share them with our investors,” he added.

    Kakao raised eyebrows earlier this month by doubling down on its quest to take control of SM, seeking to get a bigger piece of the music label just days after a previous share sale agreement between the two parties was blocked by a South Korean court.

    SM was founded by Lee Soo-man, a legendary music producer who is widely referred to in South Korea as “the godfather of K-pop” for introducing the genre to a mass audience. The company is known for representing hit artists such as NCT 127, EXO, BoA and Girls’ Generation.

    Recently, however, it’s made headlines for a different reason: shareholder battles.

    Lee has tussled with his firm’s management on multiple fronts this year — including how much of the company should be sold to either Kakao or HYBE. He sold most of his shares to HYBE for 422.8 billion Korean won ($334.5 million) in February, giving the agency a 14.8% stake.

    HYBE had also tried to increase its stake in the company in recent weeks, with its own tender offer that failed to gain traction.

    After that, Kakao swooped in by offering SM shareholders 150,000 won ($115) per share, significantly more than HYBE’s previous offer of 120,000 won ($92) per share. HYBE then formally called off its takeover bid.

    SM’s management said it wanted to move forward with Kakao because the two parties were aligned on how the agency should operate.

    SM Entertainment’s stock rose 3.5% on Tuesday following the news, while Kakao’s shares were little changed.

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  • TikTok and its CEO are fighting to save the app in the US | CNN Business

    TikTok and its CEO are fighting to save the app in the US | CNN Business

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    As a growing number of lawmakers raise national security concerns about TikTok’s ties to China, and some experts worry about the app’s impact on young people’s mental health, CNN is hosting a special to dig into these issues. Watch “CNN Primetime: Is time up for TikTok?” Thursday, March 23 at 9 p.m. ET.



    CNN
     — 

    At a Harvard Business Review conference earlier this month, where executives, professors and artists appeared for talks on corporate leadership and emotional intelligence, Shou Chew attempted to save his company.

    In his talk, Chew, the CEO of TikTok, said the social network would not provide US user data to the Chinese government and has never been asked to do so. Chew stressed the steps TikTok has taken to protect US user data. And four separate times, Chew told the audience that the platform’s mission was to “inspire creativity and bring joy” to users.

    The Harvard event is just one of several media appearances Chew has made in recent weeks amid mounting scrutiny of TikTok and of himself. Chew is set to testify on Thursday for the first time before a Congressional committee about “TikTok’s consumer privacy and data security practices, the platforms’ impact on kids, and its relationship with the Chinese Communist Party,” according to a statement last week from the committee. Meanwhile, federal officials are now demanding the app’s Chinese owners sell their stake in the social media platform, or risk facing a US ban of the app.

    Chew, a Singaporean who has largely stayed out of the spotlight since taking over TikTok in 2021, recently sat for interviews with multiple US newspapers and this week showed up in a video on the corporate TikTok account to highlight the vast reach of the app, which he revealed now has more than 150 million users in the United States.

    “That’s almost half the US coming to TikTok to connect, to create, to share, to learn, or just to have some fun,” said Chew, wearing in a hoodie and t-shirt like any other American tech executive in the clip. “This comes at a pivotal moment for us. Some politicians have started talking about banning TikTok, now this could take TikTok away from all 150 million of you.”

    Chew’s heightened visibility appears to be part of a larger messaging campaign by TikTok to bolster its reputation in the US and remind voters – and their representatives – how essential the social network is to American culture.

    A press conference is planned for Wednesday with dozens of social media creators on the steps of the Capitol, some of whom have been flown out there by TikTok. The company is paying for a blitz of advertisements for a Beltway audience. And last week it put out a docuseries highlighting American small business owners who rely on the platform for their livelihoods.

    Behind the scenes, Chew has also met with members of Congress and TikTok recently invited researchers and academics to its Washington, D.C., offices to learn more about how it is working to address lawmakers concerns over its ties to China through its parent company, ByteDance. Its parent company has also ramped up federal lobbying, spending more than $5 million last year, according to data tracked by OpenSecrets.

    “It’s life or death for TikTok, from their perspective,” said Justin Sherman, the CEO of Global Cyber Strategies, D.C.-based research and advisory firm, who was among the researchers TikTok invited to be briefed on “Project Texas,” the company’s $1.5 billion initiative to address lawmakers’ security concerns. “They are throwing everything they can at the problem.”

    In a statement, TikTok spokesman Jamal Brown said: “A U.S. ban on TikTok could have a direct impact on the livelihoods of millions of Americans. Lawmakers in Washington debating TikTok should hear firsthand from people whose lives would be directly affected by their decisions.”

    For much of the past year, TikTok has been rolling out new features and policies to address privacy and security concerns that the Chinese government could gain access to US user data, as well as broader fears that its app, like other social platforms, can be harmful to some younger users.

    TikTok recently set a default one-hour daily screen time limit on every account for users under 18 in one of the most aggressive moves yet by a social media company to prevent teens from endlessly scrolling. It rolled out a feature that aimed to offer more information to users about why its powerful algorithm recommends certain videos. And the company pledged more transparency to researchers.

    Facing concerns about its parent company’s ties to China, TikTok has also taken a number of steps to more clearly separate its US operations and user data from other parts of the organization. That includes moving all its US user data to Oracle’s cloud platform, where it says it hosts “100% of US user traffic.”

    The messaging campaign has only ramped up this week ahead of the hearing. TikTok rolled out refreshed Community Guidelines for content, which the company framed as being “based on our commitment to uphold human rights and aligned with international legal frameworks.” And Chew once again stressed TikTok’s independence from China.

    “I understand that there are concerns stemming from the inaccurate belief that TikTok’s corporate structure makes it beholden to the Chinese government or that it shares information about U.S. users with the Chinese government,” Chew said in prepared remarks ahead of his testimony before Congress. “This is emphatically untrue.”

    At the same time, TikTok is now betting on a strategy from American tech companies who have faced scrutiny for other reasons, playing up the impact it has on small businesses in the United States, including with the CEO’s prepared remarks and a mini docuseries it released last week titled “TikTok Sparks Good.”

    The series spotlighted inspiring stories of American small business owners and creators. The first of the 60-second clips features a Mississippi soap maker with a deep Southern accent who built her company on the app, and the second features an educator who quit his job to focus on sharing informational videos on TikTok aimed at teaching toddlers how to read.

    “Because of TikTok, I’m reaching millions of families who want to teach their toddlers how to read,” the educator says.

    Dozens of TikTok creators who oppose a ban will also be holding a press conference on Capitol grounds on Wednesday evening with Congressman Jamaal Bowman, a Democrat from New York. TikTok flew out some of the creators, the company confirmed to CNN. (The Information was first to report the move.)

    The list of expected attendees includes a disabled Asian American creator using her platform to combat ableism, a small business owner from South Carolina who launched a greeting card company via TikTok, and an Ohio-based chef who built her bakery business via the app. Some of the creators have hundreds of thousand or even millions of followers on TikTok.

    Even with these efforts, Sherman expressed some skepticism about how persuasive the PR push will be, mostly because of how divided Washington is right now.

    “Not everyone wants a ban,” he said. “For some lawmakers, it will matter that TikTok is taking all these steps to address security concerns.”

    But for others, it won’t move the needle. “Some lawmakers, frankly, do not care what ads TikTok is taking out, what pledges it’s making on its blog about independence, data privacy … They see an unmitigable risk of Chinese government access to data and/or influence over content, and so are going to push for a complete ban.”

    Lindsay Gorman, a senior fellow for emerging technologies at the German Marshall Fund’s Alliance for Securing Democracy and a former Biden administration adviser, said that “by and large, TikTok’s lobbying efforts so far have been pretty ineffective.”

    The problem, she said, is two-fold. First, even if TikTok takes steps to bolster its safeguards today, as it has been doing with Project Texas, concerns remain that it’s always “one update away from becoming a vulnerability.” And second, TikTok’s PR efforts in Washington won’t undo previous moments when the company “shot itself in the foot” by making what she said were “inaccurate statements” to Congress, “and then having revelations come out showing that those were inaccurate.”

    After the initial, Trump-era calls for a TikTok ban appeared to fade in Washington, BuzzFeed reported in 2021 that US user data was repeatedly accessed from China and that “everything is seen in China.” The details in the report were seemingly at odds with remarks a TikTok executive gave before a Senate panel earlier that year, claiming that a US-based security team decides who can access US user data from China. Following the report, TikTok once again became a hot button issue in the nation’s capital.

    But even as suspicion among US lawmakers grew, so did the app’s popularity in the country.

    “I do think TikTok’s strongest argument to date is drawing on its creator user base,” Gorman said. But for some lawmakers with security concerns, the latest push “may be too little too late.”

    In his TikTok video on Tuesday, Chew appealed directly to users of the app. The CEO asked them to write in the comments section to share “what you want your elected representatives to know about what you love about TikTok.”

    The top comment on the clip, which has received upwards of 50,000 likes, simply reads: “You know something went wrong when the boss has to show up 😂”

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  • China says it ‘firmly opposes’ a potential forced sale of TikTok | CNN Business

    China says it ‘firmly opposes’ a potential forced sale of TikTok | CNN Business

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    Hong Kong
    CNN
     — 

    China said it would “firmly oppose” any forced sale of TikTok, in its first direct response to demands by the Biden administration that the app’s Chinese owners sell their share of the company or face a ban in its most important market.

    The comments came as TikTok CEO Shou Chew testified in front of US lawmakers amid mounting scrutiny over the app’s ties to Beijing.

    China’s commerce ministry said Thursday that a forced sale of TikTok would “seriously damage” global investors’ confidence in the United States.

    “If the news [about a forced sale] is true, China will firmly oppose it,” Shu Jueting, a spokeswoman for the ministry, told a Thursday news conference in Beijing, adding that any potential deal would need approval from the Chinese government.

    “The sale or divestiture of TikTok involves technology export, and administrative licensing procedures must be performed in accordance with Chinese laws and regulations,” she said.

    “The Chinese government will make a decision in accordance with the law.”

    Previously, Beijing didn’t weigh in directly on a potential forced sale. However, starting in 2020, it had signaled it wanted to protect Chinese technology by adding recommendation algorithms, which could include TikTok’s, to a list of technologies restricted for export.

    On Thursday, Chew, in his first congressional hearing, sought to provide nuanced answers and tried to assuage lawmakers’ worries about the company and its parent, Beijing-based Bytedance.

    But he was frequently interrupted and called evasive by lawmakers. After more than five hours of testimony, the lawmakers expressed deep skepticism about his company’s attempts to protect US user data and ease concerns about its ties to China.

    That means there will likely be more calls by Washington to ban TikTok if the company does not spin itself off from its Chinese parent, analysts said.

    The Chinese government may have veto power on the sale, according to Shu’s latest response and Beijing’s previous actions.

    In December, Chinese officials proposed tightening the rules that govern the sale of content-based recommendation algorithms to foreign buyers.

    TikTok’s algorithms, which keep users glued to the app, are believed to be key to its success. The algorithms give recommendations based on users’ behavior, thus pushing videos they actually like and want to watch.

    Chinese regulators first added algorithms to the restricted list of technologies in August 2020, when the Trump administration threatened to ban TikTok unless it was sold.

    Analysts and legal experts believe that Beijing may ultimately prefer for TikTok to leave the US market rather than surrender its algorithm.

    See how TikTok compares to China’s heavily censored version, Douyin

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  • Tom Brady buys partial stake in WNBA’s Las Vegas Aces | CNN

    Tom Brady buys partial stake in WNBA’s Las Vegas Aces | CNN

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    CNN
     — 

    Seven-time Super Bowl champion Tom Brady has acquired an ownership stake in the WNBA’s Las Vegas Aces, team owner Mark Davis announced Thursday.

    “I am very excited to be part of the Las Vegas Aces organization,” said Brady in a statement on Thursday. “I have always been a huge fan of women’s sports, and I admire the work that the Aces’ players, staff, and the WNBA continue to do to grow the sport and empower future generations of athletes. To be able to contribute in any way to that mission as a member of the Aces organization is an incredible honor.”

    Brady said his love for women’s sports grew out of watching his older sisters, who were “by far the best athletes in our house!”

    Brady announced his retirement from the NFL in February after 23 seasons with the New England Patriots and Tampa Bay Buccaneers. During his long career, the three-time league MVP set almost every passing record, including regular season passing yards (89,214) and passing touchdowns (649). He has also amassed the most wins of any player in NFL history (251).

    “Since I purchased the Aces, our goal has been to win on and off the court,” said Davis, who also owns the NFL’s Las Vegas Raiders. “Tom Brady is a win not only for the Aces, and the WNBA, but for women’s professional sports as a whole.”

    Davis purchased the WNBA franchise before the 2021 season. Brady’s partial acquisition of the team is subject to WNBA approval.

    The Aces enter the upcoming season as reigning WNBA champions. The team opens the season against the Seattle Storm on May 20 at Climate Pledge Arena in Washington.

    In October, Brady joined the ownership group of an expansion Major League Pickleball team, along with former tennis World No. 1 Kim Clijsters, who in December attended the draft to support their new squad, the Las Vegas Night Owls.

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  • What are AT1 bonds and why are Credit Suisse’s now worthless? | CNN Business

    What are AT1 bonds and why are Credit Suisse’s now worthless? | CNN Business

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    London
    CNN
     — 

    Investors in a riskier type of Credit Suisse’s bonds had the value of their holdings slashed to zero Sunday after Swiss authorities brokered an emergency takeover of the bank by rival UBS.

    On Sunday, the Swiss National Bank (SNB) announced that UBS would buy Credit Suisse for 3 billion Swiss francs ($3.25 billion) — or about 60% less than the bank was worth when markets closed on Friday. Credit Suisse shareholders will be largely wiped out, receiving the equivalent of just 0.76 Swiss francs in UBS shares for stock that was worth 1.86 Swiss francs on Friday.

    But it is the owners of Credit Suisse’s $17 billion worth of “additional tier one” (AT1) bonds who have been left fully in the cold. Swiss authorities said those bondholders would receive absolutely nothing. The move is at odds with the usual hierarchy of losses when a bank fails, with shareholders typically the last in line for any kind of payout.

    “The extraordinary government support will trigger a complete write-down of the nominal value of all AT1 shares of Credit Suisse in the amount of around 16 billion [Swiss francs],” the Swiss Financial Market Supervisory Authority said in a statement Sunday.

    David Benamou, chief investment officer at Axiom Alternative Investments, a French wealth management firm with exposure to AT1 bonds, called the decision “quite surprising, not to say … shocking.”

    The European market for such bonds is worth about $250 billion, according to the Financial Times. It could now go into a deep freeze.

    AT1 bonds are also known as “contingent convertibles,” or “CoCos”. They were created in the wake of the 2008 financial crisis as a way for failing banks to absorb losses, making a taxpayer-funded bailout less likely.

    They are a risky bet — if a lender gets into trouble, this class of bonds can be quickly converted into equity, or written down completely.

    Because they are higher-risk, AT1s offer a higher yield than most other bonds issued by borrowers with similar credit ratings, making them popular with institutional investors.

    It is not the write-down of Credit Suisse’s AT1 bonds that has rocked investors, but the fact that the bank’s shareholders will receive some compensation when bondholders will not.

    Ordinarily, bondholders are higher up the pecking order than shareholders when a banks fails. But because Credit Suisse’s demise has not followed a traditional bankruptcy, analysts told CNN, the same rules don’t apply.

    “The hierarchy of claims remains applicable in the EU… there is no way that shareholders can be paid and AT1 holders [are] paid zero,” Benamou said. “The decision taken by the Swiss authorities is really very strange.”

    Michael Hewson, chief market analyst at CMC Markets, told CNN: “It appears that in this case, because it was not a bankruptcy situation it was considered that AT1 bondholders and shareholders would both feel the pain.”

    EU banking regulators and the Bank of England moved Monday to reassure AT1 investors more broadly that they would take priority over shareholders in the event of future bank crises.

    “Common equity instruments [stocks] are the first ones to absorb losses, and only after their full use would additional tier one be required to be written down,” the EU regulators said in a statement. “This approach has been consistently applied in past cases.”

    Christine Lagarde, president of the European Central Bank, said in a speech Monday that banks in the eurozone had “a very limited exposure” to Credit Suisse, particularly in relation to AT1 bonds.

    “We’re not talking billions, we’re talking millions,” she said.

    The Bank of England said that “holders of [AT1s] should expect to be exposed to losses” when a bank fails according to their usual ranking in the capital hierarchy.

    The legal basis for the Credit Suisse losses may be contested. Quinn Emanuel Urquhart & Sullivan, a litigation firm headquartered in Los Angeles, said Monday that it had assembled a team of lawyers who were discussing options with Credit Suisse’s AT1 bondholders.

    The surprise move by the SNB has rattled Europe’s AT1 bond market, with investors now questioning whether their holdings could be obliterated if another bank collapses.

    Joost de Graaf, co-head of European credit at Van Lanschot Kempen, a Dutch wealth management firm, told CNN that his fund did not invest in AT1s because he was “afraid [of] something like this,” where regulators could decide that a bank was no longer viable and write down the bonds’ value.

    “For the coming few years, [the AT1] market is going [to go] into some kind of a hibernation probably, where new AT1s will be very hard to place for issuers at acceptable levels,” de Graaf said.

    The impact will likely spill over into the wider bond market, he added, with investors demanding higher yields for bonds now seen as riskier.

    “For the foreseeable future, [banks’] funding [through bonds] will be more expensive,” de Graaf said.

    There are signs that shift may already be happening.

    Invesco’s AT1 Capital Bond exchange-traded fund, which tracks AT1 debt, is currently trading down 5.5% compared with last Friday’s close. WisdomTree, another AT1 ETF listed on the London Stock Exchange, fell 7.4% in afternoon trade.

    But the real damage is the precedent the write-down may have set, said Benamou of Axiom Alternative Investments.

    “No financial analyst had ever believed that AT1 bonds would be brought to zero… given the level of solvency of Credit Suisse… [and] pretty high level of regulatory capital,” he said.

    — Mark Thompson contributed reporting.

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  • Silicon Valley Bank left a void that won’t easily be filled | CNN Business

    Silicon Valley Bank left a void that won’t easily be filled | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    It’s difficult to overstate the influence that Silicon Valley Bank had over the startup world and the ripple effect its collapse this month had on the global tech sector and banking system.

    While SVB was largely known as a regional bank to those outside of the tight-knit venture capital sphere, within certain circles it had become an integral part of the community – a bank that managed the idiosyncrasies of the tech world and helped pave the way for the Silicon Valley-based boom that has consumed much of the economy over the past three decades.

    SVB’s collapse was the largest bank failure since the 2008 financial crisis: It was the 16th largest bank in the country, holding about $342 billion in client funds and $74 billion in loans.

    At the time of its collapse, about half of all US venture-backed technology and life science firms were banking with SVB. In total, it was the bank for about 2,500 venture firms including Andreessen Horowitz, Sequoia Capital, Bain Capital and Insight Partners.

    But the influence of SVB went beyond lending and banking – former CEO Gregory Becker sat on the boards of numerous tech advocacy groups in the Bay Area. He chaired the TechNet trade association and the Silicon Valley Leadership Group, was a director of the Federal Reserve Bank of San Francisco and served on the United States Department of Commerce’s Digital Economy Board of Advisors.

    There’s no doubt that the failure of Silicon Valley Bank left a large void in tech. The question is how that gap will be filled.

    To find out, Before the Bell spoke with Ahmad Thomas, president and CEO of the Silicon Valley Leadership Group. The influential advocacy group is working to convene its hundreds of member companies – including Amazon, Bank of America, BlackRock, Google, Microsoft and Meta – to discuss what happens next.

    This interview has been edited for length and clarity.

    Before the Bell: What’s the feeling on the ground with tech and VC leadership in Silicon Valley?

    Ahmad Thomas: Silicon Valley Bank has been a key part of our fabric here for four decades. SVB was truly a pillar of the community and the innovation economy. The absence of SVB – that void – and coalescing leaders to fill that void is where my energy is focused and that is not a small task.

    I would say there was a fairly high level of unease a few days ago, and I believe the swift steps taken by leaders in Washington have helped quell a fair amount of that unease, but looking at Credit Suisse and First Republic just over the last couple of days, clearly we are in a situation that is going to continue to develop in the weeks and months ahead.

    So how do you fill it?

    We’re working to be a voice around stability, particularly about the fundamentals of the innovation economy. We can acknowledge the void given the absence of Silicon Valley Bank, but I do think we need voices out there to be very clear in highlighting that the fundamentals and the innovation infrastructure remains robust here in Silicon Valley.

    This is a moment where I think people need to take a step back, let cooler heads prevail, and understand that there are opportunities both from an investment standpoint, a community engagement standpoint and corporate citizenship standpoint for new leaders in Silicon Valley to step up.

    Are you working to advocate for more permanent regulation in DC?

    It’s far too early for that. But if there are opportunities to enhance access to capital to entrepreneurs to founders of color or in marginalized communities and if there are opportunities to try and drive innovation and economic growth, we will always be at the table for those conversations.

    Do you have any ideas about how long this crisis will continue for? What’s your outlook?

    The problem is twofold: A crisis of confidence and the set of economic conditions on the ground. The economic conditions remain volatile for a variety of reasons: The softening economy, inflationary pressures and the interest rate environment. But I think right now we need to focus on stabilizing confidence in the investor community, in our business executive community and in the broader set of stakeholders around the strength of the innovation economy. That is something we need to shore up near term.

    From CNN’s Mark Thompson

    Switzerland’s biggest bank, UBS, has agreed to buy its ailing rival Credit Suisse (CS) in an emergency rescue deal aimed at stemming financial market panic unleashed by the failure of two American banks earlier this month.

    “UBS today announced the takeover of Credit Suisse,” the Swiss National Bank said in a statement. It said the rescue would “secure financial stability and protect the Swiss economy.”

    UBS is paying 3 billion Swiss francs ($3.25 billion) for Credit Suisse, about 60% less than the bank was worth when markets closed on Friday. Credit Suisse shareholders will be largely wiped out, receiving the equivalent of just 0.76 Swiss francs in UBS shares for stock that was worth 1.86 Swiss francs on Friday.

    Extraordinarily, the deal will not need the approval of shareholders after the Swiss government agreed to change the law to remove any uncertainty about the deal.

    Credit Suisse had been losing the trust of investors and customers for years. In 2022, it recorded its worst loss since the global financial crisis. But confidence collapsed last week after it acknowledged “material weakness” in its bookkeeping and as the demise of Silicon Valley Bank and Signature Bank spread fear about weaker institutions at a time when soaring interest rates have undermined the value of some financial assets.

    Read more here.

    From CNN’s David Goldman

    A week after Signature Bank failed, the Federal Deposit Insurance Corporation said it has sold most of its deposits to Flagstar Bank, a subsidiary of New York Community Bank.

    On Monday, Signature Bank’s 40 branches will begin operating as Flagstar Bank. Signature customers won’t need to make any changes to do their banking Monday.

    New York Community Bank bought substantially all of Signature’s deposits and a total of $38.4 billion worth of the company’s assets. That includes $12.9 billion of Signature’s loans, which New York Community Bank purchased at a steep discount -— it paid just $2.7 billion for them. New York Community Bank also paid the FDIC stock that could be worth up to $300 million.

    At the end of last year, Signature had more than $110 billion worth of assets, including $88.6 billion of deposits, showing how the run against the bank two weeks ago led to a massive decline in deposits.

    Not included in the transaction is about $60 billion in other assets, which will remain in the FDIC’s receivership. It also doesn’t include $4 billion in deposits from Signature’s digital bank business.

    Read more here.

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  • FDIC sells most of failed Signature Bank to Flagstar | CNN Business

    FDIC sells most of failed Signature Bank to Flagstar | CNN Business

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    New York
    CNN
     — 

    A week after Signature Bank failed, the Federal Deposit Insurance Corporation said it has sold most of its deposits to Flagstar Bank, a subsidiary of New York Community Bank.

    On Monday, Signature Bank’s 40 branches will begin operating as Flagstar Bank. Signature customers won’t need to make any changes to do their banking Monday.

    New York Community Bank bought substantially all of Signature’s deposits and a total of $38.4 billion worth of the company’s assets. That includes $12.9 billion of Signature’s loans, which New York Community Bank purchased at a steep discount -— it paid just $2.7 billion for them. New York Community Bank also paid the FDIC stock that could be worth up to $300 million.

    At the end of last year, Signature had more than $110 billion worth of assets, including $88.6 billion of deposits, showing how the run against the bank two weeks ago led to a massive decline in deposits.

    Not included in the transaction is about $60 billion in other assets, which will remain in the FDIC’s receivership. It also doesn’t include $4 billion in deposits from Signature’s digital bank business.

    As the banking crisis spreads, banks have grown increasingly wary of taking on risk. That’s likely why New York Community Bank was unwilling to take on all Signature’s assets.

    “We are unsurprised the FDIC retained loans as we would expect banks to be cautious on quickly buying loans without liability and loss protections,” said Jaret Seiberg, analyst at TD Cowan. “More broadly, we see it as positive for consumer confidence for the branches to be opening Monday as NYCB branches.”

    The FDIC said Sunday it expects to sell off those assets over time, and the total cost to the government will ultimately be about $2.5 billion.

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  • SVB collapse was driven by ‘the first Twitter-fueled bank run’ | CNN Business

    SVB collapse was driven by ‘the first Twitter-fueled bank run’ | CNN Business

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    New York
    CNN
     — 

    The massive amount of customer withdrawals that led to the collapse of Silicon Valley Bank had all the hallmarks of an old-fashioned bank run, but with a new twist befitting the primary industry the bank served: much of it unfolded online.

    Customers withdrew $42 billion in a single day last week from Silicon Valley Bank, leaving the bank with $1 billion in negative cash balance, the company said in a regulatory filing. The staggering withdrawals unfolded at a speed enabled by digital banking and were likely fueled in part by viral panic spreading on social media platforms and, reportedly, in private chat groups.

    In the day leading up to the bank’s collapse, multiple prominent venture capitalists took to Twitter in particular, and used their large platforms to raise alarms about the situation, sometimes typing in all caps. Some investors urged startups to rethink where they kept their cash. Founders and CEOs then shared tweets about the concerning situation at the bank in private Slack channels, according to The Wall Street Journal.

    On the other side of a screen, startup leaders raced to withdraw funds online – so many, in fact, that some told CNN the online system appeared to go down. Still, the end result was a modern race to withdraw funds, which House Financial Services Chair Patrick McHenry later described in a statement as ” the first Twitter-fueled bank run.”

    “Even back in the ancient days, way before we had any form of modern communication, this stuff tended to be rumors that moved really fast. The reason it would happen is people would walk down the street and observe people standing outside of banks,” Andrew Metrick, Janet L. Yellen Professor of Finance and Management at the Yale School of Management, told CNN. “Now we don’t have that, but we have Twitter.”

    The experience of the bank run was also far removed from prior eras when a large number of customers would physically show up at a bank to withdraw funds (though some did line up outside Silicon Valley Bank locations, too.) Now, many could do so online or through mobile devices.

    “What made the Silicon Valley Bank run unique was (1) the ease with which its customers could execute withdrawals and (2) the speed with which news of Silicon Valley Bank’s impending demise spread,” Ben Thompson, an analyst who tracks the tech industry, wrote in a post on Monday. “It was the speed, fueled by zero distribution costs for both rumors and withdrawals, that was so destabilizing.”

    Silicon Valley Bank was arguably uniquely susceptible to those factors given its tech-focused customer base. Moreover, its clients, many of whom were venture-backed businesses, were far more likely than the average consumer to keep more than the standard maximum FDIC insured amount of $250,000 in their accounts.

    “The FDIC covers 250K, but am I going to recover my whole 8 figures?” one startup founder told CNN last week, after the bank had collapsed. Other large tech companies kept even larger sums with the bank. That likely made the bank’s customers even more susceptible to the panic spreading online.

    Some prominent tech figures, including Mark Suster, a partner at venture capital firm Upfront Ventures, urged those in the VC community to “speak out publicly to quell the panic” around Silicon Valley Bank last week and cautioned against creating “mass hysteria.”

    “Classic ‘runs on the bank’ hurt our entire system,” he wrote in a lengthy Twitter thread on Thursday. “People are making public jokes about this. It’s not a joke, this is serious stuff. Please treat it as such.”

    His calls for calm weren’t enough. The next day, the US Federal Deposit Insurance Corporation stepped in and took control of the bank, which only added to the viral panic on Twitter.

    “YOU SHOULD BE ABSOLUTELY TERRIFIED RIGHT NOW,” Jason Calacanis, a tech investor, wrote on Twitter Sunday. “THAT IS THE PROPER REACTION.”

    Hours later, the Biden administration stepped in and guaranteed the bank’s customers would have access to all their money starting Monday.

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  • Facebook-parent Meta plans to lay off another 10,000 employees | CNN Business

    Facebook-parent Meta plans to lay off another 10,000 employees | CNN Business

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    CNN
     — 

    Facebook-parent Meta plans to lay off another 10,000 workers, marking the second round of significant job cuts announced by the tech giant in four months.

    The latest layoffs, announced on Tuesday, come after Meta said in November that it was eliminating approximately 13% of its workforce, or 11,000 jobs, in the single largest round of cuts in the company’s history.

    In a Facebook post Tuesday, CEO Mark Zuckerberg said the job cuts will take place “over the next couple of months.”

    “We expect to announce restructurings and layoffs in our tech groups in late April, and then our business groups in late May,” he wrote. In a “small number of cases, it may take through the end of the year to complete these changes.”

    “Overall, we expect to reduce our team size by around 10,000 people and to close around 5,000 additional open roles that we haven’t yet hired,” Zuckerberg said.

    As of September 2022, Meta reported a headcount of 87,314, per a securities filings. With 11,000 job cuts announced in November and the 10,000 announced Tuesday, that would bring Meta’s headcount down to around 66,000.

    Meta is far from the only Big Tech company to undergo layoffs amid higher inflation, recession fears and a whiplash in pandemic-induced demand. In the first months of this year, Amazon, Google-parent Alphabet and Microsoft have all confirmed major job cuts impacting tens of thousands of tech workers.

    Shares of Meta rose more than 4% in early trading Tuesday following the announcement.

    When the first round of job cuts was announced in November, Zuckerberg blamed himself at the time for the company’s over-hiring earlier in the pandemic. Meta  nearly doubled its headcount between March 2020 and September of last year, as the Covid-19 crisis led to a surge in demand for digital services.

    But the situation changed radically for the social media giant and other tech companies last year as pandemic restrictions eased and people returned to their offline lives. Meta’s core business was also hit by privacy changes implemented by Apple and advertisers tightening budgets amid recession fears.

    In its most-recent quarterly earnings report, Meta posted a sharp drop in profits and reported its third straight quarterly decline in revenue. But during the earnings call, Zuckerberg promised investors that 2023 would be the “year of efficiency” for the company, following years of heavy investment in growth and a more immersive version of the internet called the metaverse.

    On that call, Zuckerberg also suggested that more job cuts could be coming.

    “We closed last year with some difficult layoffs and restructuring some teams. When we did this, I said clearly that this was the beginning of our focus on efficiency and not the end,” Zuckerberg said during the earnings call in early February. He added that the company would be focused on “flattening” its org structure and “removing some layers of middle management to make decisions faster.”

    “As part of this, we’re going to be more proactive about cutting projects that aren’t performing or may no longer be as crucial, but my main focus is on increasing the efficiency of how we execute our top priorities,” Zuckerberg said.

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  • The tech industry avoided an ‘extinction-level event,’ but it’s not unscathed | CNN Business

    The tech industry avoided an ‘extinction-level event,’ but it’s not unscathed | CNN Business

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    CNN
     — 

    For much of the weekend, Silicon Valley scrambled to find a way through what one prominent tech investor described as an “extinction-level event for startups” after the collapse of a top lender in the industry.

    Startups raced to line up loans from venture funds and fintech firms to make payroll. Venture-backed retailers hosted last-minute sales to boost their cash reserves. And at least one prominent startup accelerator convinced thousands of CEOs and founders to sign an “urgent” petition calling for Treasury Secretary Janet Yellen and others to offer “relief.”

    Then, late Sunday, federal officials stepped in to guarantee that all customers of the failed Silicon Valley Bank would have access to their full deposits on Monday. The sense of relief was palpable throughout the tech sector.

    “Obviously, I’m quite relieved,” said Stefan Kalb, co-founder and CEO of Seattle-based startup Shelf Engine, who told CNN that his company would have had to shut down by the end of the week without the government intervention. “It was a very stressful weekend and I’m quite relieved with the news.”

    Parker Conrad, the CEO of HR platform Rippling, who had previously said some customers’ payrolls were being delayed by the bank failure, tweeted Sunday: “Anyone else breathing a sigh of relief and looking forward to a good night’s sleep tonight?”

    And Garry Tan, the CEO of tech startup accelerator Y Combinator who authored the petition to Yellen, praised the federal government for “decisive action.” Tan, the investor who had previously warned of “an *extinction level event* for startups” that would “set startups and innovation back by 10 years or more,” added his appreciation on Sunday for “everyone who helped us through a very very intense time.”

    But even as the tech industry enjoys a respite from a fearful weekend, unknowns remain. “You can feel the collective *sigh*,” Ryan Hoover, a tech founder and investor wrote on Twitter Sunday. “I’m still nervous,” he added. “Hard to predict the collateral effects.”

    It’s unclear how the aftershocks of the bank’s collapse will add to the startup industry’s growing challenges accessing capital. SVB’s collapse also risks changing how the world, and prospective recruits, think of Silicon Valley.

    For years, the term itself conjured an image of an enclave of bright, contrarian, libertarian engineers and thinkers who could see around corners and make big bets on the future. Now, that same industry is relying on the federal government to survive after failing to see the risk, or worse, contributing to it through a shared hysteria.

    In the chaotic days leading up to the bank’s collapse on Friday, some venture firms reportedly urged their portfolio companies to withdraw their money, which may have contributed to the bank failing.

    Then, over the weekend, many venture capitalists and tech founders banded together to try and lobby government and public goodwill towards saving the companies impacted by Silicon Valley Bank’s sudden collapse.

    While some VCs appeared to embrace fear-mongering on Twitter, much of the public messaging focused on the small businesses with exposure to Silicon Valley Bank that might be not be able to continue operating after losing access to the money in their bank account.

    “We are not asking for a bailout for the bank equity holders or its management; we are asking you to save innovation in the American economy,” the Y Combinator petition stated. “We ask for relief and attention to an immediate critical impact on small businesses, startups, and their employees who are depositors at the bank.”

    A separate coalition of more than a dozen venture capital firms, including Lightspeed Venture Partners and Upfront Ventures, released a joint statement late Friday supporting Silicon Valley Bank, given its unique and vital role in the startup economy. The bank worked with nearly half of all venture-backed tech and healthcare companies in the United States.

    “For forty years, it has been an important platform that played a pivotal role in serving the startup community and supporting the innovation economy in the US,” the statement read. “In the event that SVB were to be purchased and appropriately capitalized, we would be strongly supportive and encourage our portfolio companies to resume their banking relationship with them.”

    Even before the bank’s collapse, the startup industry was in a tough moment. Venture capital funding had dwindled amid rising interest rates and broader macroeconomic uncertainty; tech companies were cutting staff and ambitious projects; and some of the biggest private companies were reportedly slashing their valuations.

    The instability at a top tech lender, and the lingering questions about its impact on other regional banks and the broader financial system, risk making it even harder for money-losing startups to access the capital they need to survive.

    President Joe Biden emphasized in remarks Monday that “no losses will be borne by the taxpayers” related to the government’s intervention for Silicon Valley Bank. But some are already skeptical of that statement, including Democratic Sen. Elizabeth Warren of Massachusetts, who wrote in an op-ed Monday morning, “We’ll see if that’s true.”

    More immediately, there’s uncertainty around how long it will take for companies to get their money out of the bank.

    As of Monday, Kalb said the money in his Silicon Valley Bank account has not been transferred yet to the new JPMorgan Chase account he set up for Shelf Engine on Thursday. “I’ve been obsessively checking my email,” he said. “Hopefully the money will be able to be transferred shortly.”

    Ben Kaufman, the co-founder of venture-backed toy store and online retailer Camp, told CNN’s Poppy Harlow in an interview Monday morning that he and his team spent the weekend trying to “fight for survival,” including holding a last-minute 40% off sale, using the code “BANKRUN,” to raise capital over the weekend.

    “We did not know how long it was going to take for us to get our cash out … we still kind of don’t, they say today, we’ll see what happens,” he said, noting the bank held 85% of his company’s assets. “We hope we can, and we’re so grateful that the Fed stepped in, and the way they did.”

    When asked if the past week’s events would change how and where he stores his money, Kaufman said that is “going to have to be a consideration moving forward.”

    “I don’t want to do this again,” he said.

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