Did Beyonce make $300m from Uber's IPO?
Careering around the internet yesterday, in typical viral fashion, was a story that Beyoncé earned $300m from Uber's so far disastrous IPO last Friday.
It was covered in such storied financial publications as Metro, Yahoo Finance, Mercury News, and err, NME
It's hard to find the original source of the claim, but fingers point to a New York Times piece on Uber from May 3. To quote:
And Mr. Khosrowshahi has refrained from extravagances like booking Beyoncé to perform at private company functions, as Mr. Kalanick did in 2015, at a cost of $6 million in restricted stock units.
The $6m figure has been repeated across media outlets.
A 4,900 per cent return is the stuff most venture capitalists dream of, assuming the calculations are correct. But as Alphaville friend Jake pointed out on Twitter, the numbers don't add up.
In December 2014, Uber raised a $1.2bn Series E at a valuation of $40bn. This was bumped up to $2.8bn in February 2015. In the summer of that year, it raised a Series F round of $1bn according to Crunchbase, at a valuation of around $50bn. That translates to $39.64 per share, per a recent FT story. For context, Uber's valuation is currently $69.47bn, per S&P Capital IQ data.
So let's assume Beyoncé got her RSU's at price of $35, lower than the July valuation, but a higher than the December 2014 one (going on the Series F number).
That would make her return, as of yesterday's share price close of $41.29, 18 per cent. Or an extra $1m or so on top of the $6m she received. 18 per cent over four years translates to a compound annual growth rate of 4 per cent. Slightly less impressive than what's been reported in the press.
If Beyoncé were to have made a 4,900 per cent return, that would have meant she got given the restricted stock units at a price significantly below the investors in both founding rounds. A cohort which includes Microsoft, MSA Capital, Valiant Capital Partners and Sherpa Capital. We imagine sweetheart deals for musical performers, no matter how small in dollar size, wouldn't fly with Uber's investors. But we might be wrong.
No matter, it was still a savvy business move by Queen Bey to take stock instead of cash, so she deserves kudos for making that bet. After all, getting a bond-esque return on investment is better than no returns at all. Which, for those who invested in Uber at a $68.8bn valuation in 2017, has been the case so far.
Revolut wants to partner with unnamed Belgian bank
British smartphone bank Revolut wants to collaborate with a Belgian bank, reported Belgian daily De Tijd without naming sources. With the collaboration, Belgian customers no longer have to hold a foreign account. The bank Revolut has set its eyes on, is not mentioned in the report.
The news is remarkable, because together with other 'neobanks', such as the German N26 or the British Monzo, Revolut is part of the new generation financial service providers challenging the classic banks. While traditional players are still clinging to old IT systems and classic, expensive office networks, the new mobile banks are firmly convinced that their apps are faster, cheaper and more user-friendly.
Revolut offers an app to transfer money abroad at low cost and to distribute prepaid payment cards. The British start-up is barely four years old and only obtained a European banking license through the regulator in Lithuania at the end of last year. But in that short period, the group grew into an international player with five million customers.
Since November last year, Revolut has also been active in Belgium. In six months, it has been able to attract 50,000 active users here, says Steven Geclowicz, the country manager for Belgium.
The goal is to bring the number of Belgian customers to 100,000 by the end of this year. To realize that ambition, Revolut will also roll out its own investment services in the coming months. In the long term, it also wants to provide loans.
Link to original source (De Tijd)
How Xi Jinping's colleagues rejected an 'unequal' trade deal
A 150-page agreement was sent back to Washington, gutted and shrunk to 105 pages
TOKYO -- Early this month, the Chinese government sent the U.S. a trade deal draft that had been slashed from 150 pages -- painstakingly assembled by both sides over five months of negotiations -- to 105.
The move riled U.S. President Donald Trump and brought progress on the trade talks to a screeching halt, as Beijing surely knew it would.
To understand why China went ahead anyway, we must go back to late April, when Chinese President Xi Jinping's schedule was packed with events in and around Beijing. The first was the second Belt and Road Forum for International Cooperation, on April 25-27, which brought together leaders from more than 30 countries.
While it was a moment in the sun for Xi, his disposition was far from sunny.
At the first forum two years ago, a large display at the event's media center followed Xi's every step as he strutted around the venue alongside other world leaders, with a confident smile befitting the head of a global superpower.
This year, images of Xi strolling were nowhere to be found. When the president began his address, at an unannounced time, the display abruptly popped up in the media center -- almost as if the organizers did not want to show his gloomy countenance for long.
At the time, the world's hopes were still high for a speedy U.S.-China trade deal, but Xi was no doubt aware that a tense domestic situation made a quick compromise extremely unlikely.
The night after the event, Xi, clad in a heavy coat, watched a lavish display of fireworks outside Beijing. Again he was alongside other world leaders and VIPs. The show was part of the opening ceremony of the International Horticultural Exposition, one of a string of big events organized as a lead-up to the 2022 Beijing Winter Olympics.
The fireworks did not put Xi's mind at ease. The U.S. had not sent a delegation to either the Belt and Road forum or the gardening expo.
Voices within the Chinese Communist Party, growing louder day by day, were insisting that "an unequal treaty that codifies meddling in our domestic affairs into law is unacceptable."
These cries came not only from the party's conservative left but also from the rank and file -- from the core of workers and management at state-owned companies, from industries that rely on subsidies for survival and from the bureaucratic institutions that protect them. The proposed deal threatened their interests.
When modern China was established seven decades ago, the party denounced the "unequal treaties" China signed under imperial rule, exemplified by the 1842 Treaty of Nanking with Great Britain, which ended the First Opium War, and the 1895 Treaty of Shimonoseki, which ended the first Sino-Japanese war.
The Shimonoseki agreement forced the Qing dynasty to pay an indemnity to Japan and hand over Taiwan. The dynasty would not last two more decades.
Whether the proposed deal between the U.S. and China really qualified as an "unequal treaty" is debatable, but regardless, it cut to the communist government's heart. It would forbid forced technology transfers by a variety of both public and private means, theft of foreign technology or intellectual property, subsidies to state-owned enterprises and export subsidies given to all companies.
It is easy to understand the argument that the legal measures demanded by Washington were an unacceptable form of interference that violated China's principles.
In late April, Xi was forced into an about-face in his negotiating tactics. The negotiating team, led by Vice Premier Liu He, one of Xi's close aides, had focused too much on reaching an amicable resolution and stepped outside the bounds of the discretion granted by party leadership.
But the Xi-Liu axis would never compromise on the most vital points -- those intertwined with Communist Party rule. This is "the last 10%" that U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin have said stood in the way of a deal.
The talks broke down not over that 10% but over the 90% that had already been agreed to by Liu and Lighthizer. Shuttling back and forth between Beijing and Washington for multiple rounds of talks, the two teams had collaborated on that 150-page document, which covered seven areas.
Liu must have felt some attachment to the draft. The text was carefully constructed, with the Chinese and English versions meticulously compared. Lighthizer, who negotiated successfully with Japan in the 1980s, examined it with an international lawyer's eyes. The Chinese side even grew sick of his constant scrutinizing of the wording, sources familiar with the talks said.
Even so, the deal moved 90% of the way to its goal. Given Liu's closeness with Xi, it should stand to reason that at least the overall outline of the agreement had the approval of China's leadership.
Yet the text went back to the U.S. gutted. From Washington's point of view, the agreement was now nothing more than 105 pages of words, with nearly all of the legal and other mechanisms to ensure compliance ripped out. It was proof that Beijing had given up on reaching a quick conclusion.
The first sign that the negotiations had hit a wall came on May 5, when U.S. President Donald Trump tweeted about tariffs on imports from China going up to 25%. But by that time a heightened trade war was a foregone conclusion. China had already informed the U.S. of the significantly watered-down draft.
Chinese media have reported that Xi said he will take responsibility "for all consequences."
Xi is believed to have made this pledge to either the seven-person Politburo Standing Committee or the full 25-member Politburo. Those gatherings would have taken place after the two big events, most likely at the end of April or the first days of May.
The Politburo Standing Committee consists of Xi, who has the power to convene a meeting and chair it; Li Keqiang, the premier; and five other top party figures. If the seven cannot come to a unanimous decision, a vote is taken, with each member, including Xi, having one vote each.
Every important decision, by rule, must be approved by the wider Politburo.
The reports about Xi pledging to take responsibility smell of propaganda. The decision to show the U.S. the revised draft was made before Liu flew to Washington for trade talks late last week and would have been made collectively at the highest level.
Despite being positioned as the "core" of the party leadership, even Xi cannot overturn a collective decision without securing the consent of the party leaders.
The Xi-Liu duo, which has been leading the trade negotiations, was, in effect, shackled.
This is a sign that, seven years into his rule, Xi's political momentum is slowing. While garnering unrivaled power through an anti-corruption campaign that eliminated his rivals, the president has little to show the public in terms of economic achievement.
The credit of expanding China's economy into the world's second largest goes to Xi's predecessors.
When Liu appeared in Washington last week, he no longer had the title of being Xi's "special envoy." His sole mission was to convey to the world that negotiations had not collapsed and that they will go on.
On May 10, while Liu was still in town, the Trump administration imposed additional import tariffs on $200 billion worth of Chinese goods. China responded days later, announcing retaliatory tariffs on $60 billion worth of U.S. imports.
Adding to the pressure, the Trump administration then released details of a fourth round of punitive import tariffs, on about $300 billion worth of Chinese good, to be imposed after a public comment period that lasts until late June.
There is still time to talk, and Trump has said he will meet with Xi in Osaka, on the sidelines of the Group of 20 leaders summit. The two-day meeting begins June 28.
When the presidents sit down together, at stake will be the implementation of tariffs on all Chinese exports to the U.S.
The Chinese media is hardening its stance, pounding the argument that China can never compromise on principle issues.
Xi has no easy task.
U.S. equity futures declined and the yen edged up as Sino-American tensions continued to flare, leaving Asian equities volatile.
Stocks fell in Tokyo and Seoul along with S&P 500 Index futures after President Donald Trump moved to curb Huawei Technologies Co.’s access to the U.S. market and American suppliers. Indexes in Hong Kong and China were modestly higher. Australian government bond yields plumbed fresh all-time lows and the Aussie fell as the unemployment rate unexpectedly rose, though the moves eased. Treasuries held steady after the two-year yield touched the lowest level since February 2018. Ten-year yields were at 2.37%. Oil rose above $62 in New York.
US After Hours VRTU -24%, DDS -7.5%, ZTO -4%, CSCO +2.5%, NTES +2% among earnings / guidance movers
Nikkei -0.69% Hang Seng +0.12% CSI +0.39% Shanghai +0.51% Shenzen +0.53%
Eur$ 1.1209 CNH 6.9115 CNY 6.8780 JPY 109.47 GBP 1.2844 CHF 1.0081 RUB 64.6833 TRY 6.0310 WTI$ 62.41 +0.63%
S&P -0.285 EuroStoxx -0.18% FTSE -0.03% Dax -0.27% SMI +0.34%
Macro :
- World Economy Rebound Thrown Into Doubt by Escalating Trade War
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>>> Call