More Bad News For Uber, Plus Sprint Is Struggling To Compete With Verizon
Here’s your hand-crafted Brew for June 14th
QUOTE OF THE DAY
“Do your life’s work in service to our mission.” –– Travis Kalanick, in an email to his employees regarding his leave of absence.
- Major U.S. indexes finished higher with tech climbing after a two-day sell-off.
- Oil prices ended higher ahead of today’s announcement on U.S. oil stockpiles.
- The dollar fell to its lowest point in three months against its Canadian counterpart.
In his most noteworthy e-mail since the leaked Miami memo, Kalanick told employees that personal reasons, including his mother’s recent death, and a focus on “Travis 2.0” are the reasons for his departure.
Yet, the board recommendations from a month-long internal investigation tell a different story…one that depicts the firm’s strategy to scale back excessive spending, reduce alcohol consumption and above all, curtail Kalanick’s sweeping authority.
Travis has kept a tight leash since day one
A strategic share structure allows him and other Uber insiders to hold majority voting power, while owning a minority of the company.
Not convinced? Four of the 11 board seats are kept empty at Kalanick’s request…just because.
And the billionaire party boy has cracked the whip on everything from editing last second PR statements to controlling employee access to the company-sponsored beer taps.
While some board members do support the familiar Silicon Valley motif of: “you lead and we follow,” others fear Kalanick’s 1-star rating might affect Uber’s ability to place a new COO.
And now the plot thickens…
With Kalanick on leave, Uber’s C-Suite feels like a ghost town with the COO, CFO, CMO and general counsel roles all vacant.
Without senior management enforcing new regulations for dipping one’s pen in the company ink or overindulging at happy hour, it remains to be seen if Uber can clean up its notorious culture.
An Offer You Can’t Refuse
Washed up, beaten down, kicked to the curb. Sprint’s
(+0.61%) feeling like that framily friend no one wants to hang with.
But is it too little too late? Sprint’s $2 billion bottom line feels concerningly small when compared with its $40 billion debt load. And the pressure remains real to either finagle a merger with T-Mobile or quickly work its way out of the four slot.
If “free” doesn’t win you subscribers, not sure what will.
(-2.56%) is cutting 400 full-time jobs at its corporate offices as part of a planned $1.25 billion cost reduction plan.
Why now? The company is looking to secure $175 million to meet short-term obligations. One tiny problem—it’s a few million short (like $66 million…but who’s counting).
And Sears isn’t alone. Bankruptcy courts can’t seem to keep Chapter 11 filing docs in stock.
Thanks a lot Amazon.
This Is an App of Learned Doctors
“Love your necrotizing fasciitis…so cute!”
A filter’s not gonna cover that rash, but it’s a start. Figure 1 (aka “Instagram for doctors”) just raised another $10 million (bringing the total north of $20 million) as it brings transparency to rare medical conditions.
The four-year-old Toronto-based startup has upwards of two million registered users. It has also become the largest crowd-sourced medical platform by tapping into a global community of doctors, nurses and medical mystery fetishists.
“So, what is it doing with the $10 million?”—every investor ever.
Figure 1 is testing monetization via medical brand sponsorships and mentorships, while growing its network of doctors and its library of NSFW rashes, lesions and warts.
What Else Is Happening…
(-1.55%)finally closed its $4.48 billion acquisition of Yahoo.
- Luxury retailer Neiman Marcus is putting a pause on its plan to sell the company.
(+0.57%)announced it is cutting 50 executive jobs, shedding a layer of management.
- Time Inc.
(+0.36%)is eliminating 300 jobs, or roughly 4% of its workforce.
- Monday: No events today
- Tuesday: Producer Price Index (+/-)
- Wednesday: Fed Rate Announcement, May Retail Sales, Consumer Price Index, Crude Inventories
- Thursday: Kroger Earnings; Industrial Production
- Friday: Michigan Consumer Sentiment Index
Gimme 5…Market Crashes
Welcome back to Gimme 5.
This section is all about diving into the history of a person, product, company, industry or topic and delivering the five best gems we can find straight to your inbox.
In light of the recent tech stock hysteria, we decided to step back and reflect on the biggest market sell-offs in U.S. history.
- Black Tuesday (October 29th, 1929): The Dow dropped 12%, bringing a swift end to the roaring twenties (cue Great Depression). It wasn’t until 1954 that the market regained its lost value.
- Black Monday (October 19th, 1987): Within one year, the Dow had gained 44%. In one day, half of it was erased thanks to the predecessor of electronic trading. The Dow lost 22% and about $500 billion in value.
- September 11th, 2001: Following the attacks, the markets remained closed until the 17th. The Dow dropped 14% and lost an estimated $1.4 trillion in value over the next five trading sessions.
- Housing Crash (September 29th, 2008): The Dow suffered a 7% loss and its largest single-day point loss ever (778 points) after the House denied a $700 billion bank bailout plan.
- Flash Crash (May 6th, 2010): At 2:45pm, the Dow inexplicably fell just shy of 1,000 points in 36 minutes. The culprit? 14 seconds of high-frequency trading gone awry.
Interview Question of the Day
A Z B Y D W G T ? ?
Which two letters come next?
Who Am I?
- In 2009, I climbed Mt. Kilimanjaro.
- I pulled over 250 all-nighters during my first five years at Google.
- I used to date Google co-founder and CEO Larry Page.
- I was the CEO of a multi-billion dollar company that just got acquired.
Stat of the Day
That’s what one lucky lottery winner might pay in taxes to our dear Uncle Sam. Don’t hold your breath; the winning ticket was still worth $448 million.