Troy Pospisil loved working for private equity firm H.I.G. Capital where, as an investment professional, he looked at hundreds of deals. But one thing Pospisil hated was the high volume of routine legal contracts, including non-disclosure agreements, that he and other executives had to review and negotiate. Pospisil estimates that he spent about 15% to 20% of his day on this “most painful aspect of workflow.” His solution was to quit PE and start a company to automate these time-sucking tasks.
“I always wanted to be an entrepreneur. I had to give it a go,” said Pospisil, who made good on his plans and founded a firm called InCloudCounsel.
In 2014, Pospisil launched the company, which is today known as Ontra, with one product: Contract Automation, which streamlines routine legal agreements used in private capital markets and investments. Today, Ontra also offers products for contract negotiation, to simplify fundraising, and to modernize entity management as part of a suite that seeks to make the back office more efficient.
On Tuesday, Ontra announced it has raised $70 million in financing from Silicon Valley Bank, a unit of First Citizens Bank. In total, Ontra has collected $325 million in financing and equity from investors including Blackstone, Battery Ventures and Mike Paulus, a former Andreessen Horowitz partner who cofounded Assurance IQ. Because the financing was a credit instrument, there is no valuation available for Ostra, Pospisil said.
Ontra ran a dual track process, considering both debt and equity providers, Pospisil told Fortune. Lenders that were interested in partnering with Ontra were offering attractive interest rates, prompting Ontra to pick SVB because it was a “far better deal,” he said.
“We are bringing in a great partner with SVB and we [didn’t] suffer any equity dilution for employees and existing investors,” he said.
Ontra currently has roughly 850 customers including the largest investment banks and private equity firms like Blackstone, Warburg Pincus, and Motive Partners, as well as asset manager AllianceBernstein.
Legal AI is growing fast
Ontra is one of several legal tech startups, including Ironclad and Juro, that use AI to automate routine legal processes for private markets and investment firms. Ontra currently employs about 385 people and has processed over 1.5 million documents.
Based in Concord, California, the startup plans to use much of the financing for R&D and to launch new products. In September, it plans to launch another three products to streamline due diligence questionnaires, to simplify processes for customer verification, and to further speed contract negotiation timelines.
Ontra is looking to scale rapidly with plans to launch two new products a year for the foreseeable future, Pospisil said. “We want to be the indispensable, ubiquitous infrastructure provider for the private markets,” he said.
But when it comes to a possible IPO, Pospisil appeared hesitant. The IPO market has been very slow since a record 397 companies listed their shares in 2021. But a recent surge of strong deals, capped by a blowout performance from crypto firm Circle on June 5, means the public equities market may be open to high-growth tech companies. “We may IPO if it’s the right thing for the business. We don’t view an IPO as a goal in itself,” Pospisil said.
By the close of Circle Internet Group’s first trading day on Thursday, June 5, its stock had rocketed to $88, a 180% jump from the price institutional investors paid for their shares in the underwriting led by JPMorgan, Goldman Sachs, and Citigroup. The upshot: The company and insiders combined left a gigantic amount of money on the table by agreeing to a price far below what investors were willing to pay. As Fortune previously noted, that “left on the table” figure was the seventh largest in the history of all IPOs since 1980, exceeded only by the debuts of Visa, Airbnb, Snowflake, Rivian, DoorDash, and Coupang, the latter nicknamed “the Amazon of South Korea.”
Circle was just revving up. On Friday, June 6, its stock jumped another nearly 30% to $107.5. That additional leap hurtled the issuer for the USDC stablecoin to a historic record. Jay Ritter—a professor at the University of Florida and the world’s leading expert on IPOs—confirmed that for all go-public events since 1980 that raised $500 million or more, Circle’s two-day moonshot of nearly 250% ranks as by far the highest. The crypto favorite’s showing easily eclipsed the second place “pop” sounded by software provider C3.ai of 209% at its 2020 entry on the Nasdaq.
All told, Circle sold 39 million shares, raising $1.145 billion after underwriting fees of $67 million. Had the shares fetched the $107.5 close on June 6 instead of the $31 (excluding fees) paid in the presale by the likes of mutual and hedge funds, the company and insiders combined would have collected $4.144 billion. Hence, as of the second day of trading, the IPO had left a staggering $3 billion on the table. Put simply, for every $1 going to the sellers, $3 in two-day gains flowed to the underwriters’ Wall Street clients as a windfall.
At a market cap of $22 billion, Circle is selling at 140 times earnings. Given that treacherous valuation and the onslaught of stablecoin rivals invading its space, Circle is the epitome of an ultrahigh-risk stock. Money that might have been sitting in its treasury as a buffer against tough times vanished in this mind-bending spectacle that only the confluence of crypto craziness and Wall Street’s genius for underpricing IPOs could have staged.
Private investment could suffer as investors increasingly allocate funds to finance the government rather than firms and consumers, Apollo chief economist Torsten Sløk has warned. This phenomenon, known as crowding out, could become a bigger problem as the cost of servicing the $37 trillion national debt increases.
Wall Street seems increasingly antsy about how a ballooning federal deficit could weigh on both companies and consumers.
As the national debt grows faster, so does the pace of government borrowing—which could start to dominate credit markets. U.S. Treasuries accounted for $28.3 trillion, or roughly 60%, of the country’s $46.9 trillion fixed-income market at the end of 2024, according to the Securities Industry and Financial Markets Association. Some believe the government binge is now competing with private companies and consumers for available dollars to borrow.
“This is not healthy,” Torsten Sløk, chief economist at private equity giant Apollo Global Management, wrote in a note on Sunday. “Half of credit issued in the economy should not be going to the government.”
That’s because private investment could suffer, Sløk explained, as investors allocate more and more of their funds to finance the government rather than firms and consumers. Borrowing costs rise with less loanable funds to go around, a phenomenon termed “crowding out.”
“The bottom line is that if the level of government debt were significantly lower,” Sløk wrote, “more dollars would be available for consumers to buy new cars and new houses, and for companies to build new factories.”
Jay Hatfield, the CEO of Infrastructure Capital Advisors, estimates this will reduce U.S. gross domestic product by $300 billion, or just over 1% of total GDP, based on the nearly $2 trillion deficit and assuming a 15% return on corporate investment after taxes.
“Deficit spending always crowds out private investment and hurts economic growth,” Hatfield, who manages ETFs and a series of hedge funds, told Fortune in a text message. “Particularly since it is impossible to cut politically post-[2008] recession as we have seen after the pandemic.”
Others aren’t sure if that is visible just yet. Corporate borrowing continues to grow at a fast pace, Matt Sheridan, lead portfolio manager of income strategies at AllianceBernstein, told Fortune. Mortgage lending has been sideways over the past five years, but that’s because homeowners don’t want to refinance at higher interest rates, not because banks don’t want to give them loans.
“We’re not seeing a lot of stress yet,” Sheridan said, “but it might be early days.”
Avoiding a ‘debt death spiral’
Few in finance, of course, are probably more famous for sounding the debt alarm than Ray Dalio. The billionaire founder of Bridgewater Associates, the world’s largest hedge fund, has long warned about the increasing costs of servicing the $37 trillion national debt.
Interest payments on the debt will crack $1 trillion this year, according to the Committee for a Responsible Budget, and only trails Social Security as a share of government spending.
As these payments get larger, it increasingly crowds out productive spending, Dalio recently toldFortune’s Diane Brady. Meanwhile, interest rates are pushed higher, weighing on markets and the economy, or the government “prints money” and buys debt to pay its bills, which causes inflation.
“You get both the central government and the central bank creating debt to pay for debt and you begin a spiral,” he said. “There are no easy answers.”
Recent turmoil in the bond market may put a spotlight on some of these big questions. Long-term yields remain elevated, partly because investors have priced out fewer interest rate cuts by the Federal Reserve, with strong “hard data” suggesting the economy remains resilient despite uncertainty introduced by President Donald Trump’s tariffs.
Investors might also be demanding a premium for holding U.S. debt because of growing fiscal concerns. Despite Elon Musk’s objections, Republicans are working to pass a “Big, Beautiful” spending bill, which the nonpartisan Congressional Budget Office has estimated will increase deficits by $2.4 trillion over the next decade.
If borrowing costs remain high, companies might find it more difficult to finance themselves with long-term credit. So far this year, Sheridan said, firms are issuing fewer 30-year bonds and more intermediate-duration and floating-rate securities.
“So that crowding out effect might be starting to play out with where on the U.S. yield curve corporations want to borrow at,” he said.
More expensive lending, of course, may lead to more companies going under. Since 2022, when the Fed dramatically hiked rates to fight inflation, an annual study by Deutsche Bank has argued the global economy is slowly leaving an “ultra-low default world.”
“While we haven’t yet seen a cyclical spike in defaults—largely due to the avoidance of a U.S. recession—there are clear signs that higher-for-longer funding costs, especially in the U.S., are taking a toll,” Jim Reid, the bank’s global head of macro and thematic research, wrote in a note with colleagues Monday.
The pressure could keep building if Uncle Sam can’t stem its borrowing.
A Chinese lender’s stunt to woo depositors with gifts including the wildly popular Labubu dolls has been barred by financial regulators, underscoring the increasingly fraught battle among banks for customers as interest rates and profit margins fall.
The Zhejiang branch of the National Financial Regulatory Administration has asked local banks to refrain from giving non-compliant perks to attract deposits, according to people familiar with the matter.
The guidance came in the wake of a promotion by Ping An Bank Co., which has been offering Labubu collectibles—blind box toys endorsed by celebrities including Lisa from the K-pop group Blackpink—in multiple cities for new depositors who can park in 50,000 yuan ($6,960) for three months.
Such a practice, which often involves offering free items like rice or small home appliances, as well as e-gifts such as memberships at Internet platforms, was seen as driving up costs at banks and hurting their margins, said the people, who asked not to be named discussing a private matter.
While Ping An Bank’s marketing campaign went viral on Chinese social media platform Xiaohongshu and sparked strong interest from potential savers, it also drew criticism from state media which said it was “not a long-term solution.”
Chinese lenders are walking a tightrope as they balance between deposit taking and protecting margins that are now at record-low levels across the sector. The nation’s big banks just conducted a new round of deposit rate cuts in May, with smaller peers following suit and pushing term deposit interests down to just a little above 1%.
The Zhejiang banking regulator has urged the immediate suspension of any products involved in non-compliant deposit-gathering practices, along with the removal of related promotional materials, the people said. It remains unclear whether the regulator’s other local divisions have issued similar guidance.
The regulator didn’t immediately respond to a request for comment. Ping An Bank said the initiative started off as a small-scale project launched by a local branch, declining to comment further.
China said in a 2018 rule that commercial banks shouldn’t attract deposits through “inappropriate means” such as giving away physical gifts or returning cash.
Ping An Bank offered Labubu collectibles—blind box toys endorsed by celebrities including Lisa from the K-pop group Blackpink—for new depositors who could park in 50,000 yuan ($6,960) for three months.
As Elon Musk’s fortune plunged by $36 billion last week and Tesla Inc.’s stock suffered a brutal drubbing, his most ardent backers rushed in to buy the dip — with leverage.
Investors poured $651 million into the Direxion Daily TSLA Bull 2X Shares (ticker TSLL), marking the largest weekly inflow since the fund’s 2022 debut, according to data compiled by Bloomberg. The biggest chunks came in on Thursday and Friday.
The buying spree into TSLL—which is designed to deliver twice Tesla’s daily return—reflects a now-familiar reflex: doubling down on Musk during selloffs, a strategy that’s worked spectacularly in the past. What’s different now is that the trade faces an unprecedented risk after last week’s clash between the tech executive and President Donald Trump over a signature tax bill, with the fallout exposing big cracks in Musk’s political capital.
Beyond the personal drama, Tesla faces intensifying business pressures from competition in China and cooling demand in developed markets. Broader questions also linger around the electric-vehicle maker’s valuation after years of trading at rich multiples relative to traditional automakers.
All that wasn’t enough to stop the unwavering faith — or speculative fervor — still driving retail traders who have repeatedly profited betting on Musk’s comebacks.
“The retail investor has done very well buying Elon Musk on weakness in the past, so they see the recent drop as a buying opportunity once again,” said Matt Maley, chief market strategist at Miller Tabak + Co. “They seem to be a little early this time given the uphill climb Tesla is facing.”
The president and Musk last week exchanged public barbs following a break in their notorious friendship that developed as the Tesla CEO campaigned for Trump and put money toward his 2024 re-election campaign. But their views appeared to diverge in recent days — and boiled over on Thursday — over Trump’s “Big, Beautiful” tax bill, which Musk criticized, prompting the president to say that he was “disappointed with Elon.”
The fallout continued throughout the day, with Trump calling the billionaire CEO “crazy” and threatening to end his government contracts. Musk, in turn, said the president wouldn’t have won the election without him.
Tesla shares declined, leading to one of the biggest-ever wipeouts in Musk’s net worth, with $34 billion erased on Thursday alone. Tesla shares dropped 15% for the week to around $295 by end-of-day Friday.
Yet, buying when Tesla shares are in free-fall has tended to work out in the past for investors. The company’s stock declined to $60 apiece during the pandemic, before recovering. In 2022, the year TSLL started trading, it notched a $300 million inflow even as the company’s shares plunged 65%. The following year, Tesla’s stock surged 102%.
Judging by flows into TSLL, it looks like Tesla bulls are undaunted by the Musk-Trump fallout. Investors have added more than $3.5 billion into the ETF so far this year, even as Tesla’s stock has tanked more than 26% year to date. The amount the fund garnered is also more than triple what it saw during all of 2024, a span during which Tesla’s shares surged more than 60%.
As Elon Musk’s fortune plunged by $36 billion last week and Tesla Inc.’s stock suffered a brutal drubbing, his most ardent backers rushed in to buy the dip — with leverage.
Precious metals traders at top banks including JPMorgan Chase & Co. and Morgan Stanley posted their best performance in five years in the first quarter, in part thanks to an arbitrage opportunity that sparked a rush of bullion into the U.S.
Twelve leading banks together made $500 million in revenue from precious metals in the first quarter of 2025, the second highest figure in a decade of data compiled by Crisil Coalition Greenwich. That’s approximately twice the average earnings per quarter over the past ten years, the market intelligence firm’s data showed.
Some of the windfall came from a lucrative premium for bullion in the U.S., as fears that precious metals would be subject to tariffs prompted dealers to ship huge volumes of gold and silver into U.S. futures exchange warehouses.
Gold and silver prices on New York’s Comex exchange spiked above other international benchmarks in the first quarter, meaning traders could buy bullion in trading hubs like London, Switzerland or Hong Kong and transport it to the U.S. to reap a profit before any tariffs came into effect. A similar dynamic was in place in 2020, when the pandemic grounded commercial flights, creating a prolonged arbitrage opportunity for banks that could find some way of shipping bullion to New York.
Morgan Stanley delivered more gold to settle proprietary Comex positions than any other bank in the first quarter, dispatching 67 metric tons of gold, according to exchange data. That amount of metal is worth approximately $7 billion dollars at current market prices.
JPMorgan, the dominant dealer in precious metals, delivered more than $4 billion worth of gold to settle February futures contracts, in one of the biggest daily delivery notices in the history of the exchange. The trade eventually screeched to a halt in April as bullion was exempted from President Donald Trump’s package of reciprocal tariffs.
Morgan Stanley and JPMorgan declined to comment.
Bullion-dealing banks — and JPMorgan in particular — have a history of profiting from dislocations in prices across the Atlantic. Unprecedented arbitrage opportunities helped the bank’s metals desk make a record sum of $1 billion in 2020.
Volatility sparked by the unfolding of President Donald Trump’s tariff plans also drove revenue for the 12 banks, said Angad Chhatwal, head of fixed income, currencies and commodities for Coalition. Trading volumes in the London market have also grown in recent years, against the backdrop of a stunning rally in the gold price, which has doubled since late 2022.
Warner Bros. Discovery (WBD) has announced that it will be splitting up into two separate media companies. The new structure will see one entity retain Warner Bros. film, television and game studios, along with New Line Cinema, DC Studios, HBO and HBO Max, while the other will hold the company’s full portfolio of live cable channels, which includes many household names like CNN, HGTV, Cartoon Network, Discovery, TCL and others.
In a shareholder deck, WBD refers to these two entities as “WBD Global Networks” and “WBD Streaming & Studios,” and highlights the strengths of each portfolio. The company points out that the newly minted entities would each produce healthy free cash flow and intends for each to be listed as publicly traded companies. This comes just three years after the original merger between WarnerMedia and Discovery.
David Zaslav, the current CEO and president of WBD, will serve as president and CEO of Streaming & Studios. Gunnar Wiedenfels, currently CFO of WBD, will serve as president and CEO of Global Networks. Both remain in their current roles until the separation is complete.
“The cultural significance of this great company and the impactful stories it has brought to life for more than a century have touched countless people all over the world. It’s a treasured legacy we will proudly continue in this next chapter of our celebrated history,” said Zaslav in a statement. “By operating as two distinct and optimized companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape.”
In an investor presentation, WBD announced it will be taking a $17.5 billion loan from J.P. Morgan to assist in a cash tender and consent solicitation for all of its approximately$35.5 billion in outstanding bonds. This means it will be buying back some of the bonds while also asking bondholders to loosen their terms, and will offer cash incentives to those who agree to sell or restructure. According to The Hollywood Reporter, the majority of the total debt will be held by Global Networks, while “a not-insignificant portion” will remain with Streaming & Studios. The exact breakdown of the debt at each entity remains to be seen, pending the outcome of the companies' debt restructuring.
This article originally appeared on Engadget at https://www.engadget.com/entertainment/warner-bros-discovery-will-split-into-two-media-giants-144553585.html?src=rss
FILE PHOTO: The exterior of the Warner Bros. Discovery Atlanta campus is pictured in Atlanta, Georgia, U.S. May 2, 2023. REUTERS/Alyssa Pointer/File Photo
South Korea’s small investors are trying to shake up the country’s creaky corporate landscape.
Amateur stock-pickers across the country are gathering on social media platform KakaoTalk and dedicated shareholder apps such as Act, which has racked up more than 110,000 users in the two years since it launched. Their aim: to give a jolt to Korea’s $1.9 trillion stock market, which has for years traded at cheaper multiples than regional rivals like Japan and Taiwan.
“Korea’s financial system lags global standards and companies need to be held accountable,” said Younghee Won, a 66-year-old art instructor and amateur investor. “Online platforms allow our anger to translate into action.”
This wave of grass-roots activism means Korea’s listed companies are now being pressured from all sides, as politicians, regulators and foreign investment funds push for better governance. That may finally force local companies to address the long-standing “Korea discount”—adding fuel to a stock market that is already one of the world’s best performers so far this year.
It has also turned small investors into a surprising political force. Lee Jae-myung, the left-leaning politician who won the country’s presidential election last week, tried to position himself as a champion for shareholders, promising to lift corporate governance standards, curb stock manipulation and set the Kospi index on the path to 5,000—almost 80% higher than its current level.
The Kospi entered a bull market after Lee’s election win and was around 1.7% higher in early Asian trading on Monday.
The market is getting a boost from foreign funds loading up on stocks, and rising optimism from Wall Street. Goldman Sachs Group Inc. strategists said in a weekend note they were upgrading Korean stocks to overweight from neutral, pointing to the increased likelihood of capital market reforms.
Growing clout
Retail investors in Korea now represent almost 30% of the overall population, according to Goldman Sachs. A boom in stock trading during the COVID-19 pandemic led to millions of new account openings, fueling the rise of online communities where they could learn about stock picking—and hatch plans.
Shareholders of Korean companies filed 168 proposals in the most recent round of annual general meetings, a jump of more than 80% from 2021, according to figures from the AJU Research Institute of Corporate Management. That included 78 proposals directly targeting management, calling for the appointment or removal of executives.
“Minority shareholders are seeking a more active role in corporate governance,” said Nameun Kim, deputy director at the AJU. “If previously the focus was solely on returns, now they want their preferred directors on the board so they can participate in management decisions.”
So far, small investors’ successes have come at small companies, those with a market value of $1 billion or less. During the recent round of annual general meetings in March, medical company Oscotec Inc. scrapped plans to reappoint its chief executive after pushback from investors, while biotechnology firm Amicogen Inc and textile company DI Dong Il Corp. appointed new auditors after small investors pushed for it.
Oscotec, Amicogen and DI Dong Il Corp. didn’t respond to requests for comment.
Unsurprisingly, many companies do their best to resist—or simply ignore—these mini activists. Kim, a schoolteacher who asked to be identified only by his surname, became so frustrated with one Korean company whose stock he holds that he sent 400 letters to fellow investors he found in the company’s shareholder registry, asking them to join him in a KakaoTalk group to discuss possible action. More than 120 of them signed up.
“I had to print and mail each one by hand,” he said. “I did it all on my own, outside of work hours, while maintaining a full-time job. Shareholder activism is exhausting, frustrating and frankly overwhelming.”
The company didn’t respond to Kim’s numerous requests for clarity on their business performance, and he ended up selling most of his stake. He held on to a few shares out of a sense of obligation to his fellow activists.
The rise of small investors in Korea differs from the meme-stock mania in the U.S., where anonymous users on Reddit’s WallStreetBets forum banded together to drive up the price of GameStop Corp. and other shares. Korean platforms such as Act and Hey Holder require users to confirm they actually hold shares before they can join any dedicated group, meaning those weighing into discussions already have skin in the game.
Act’s CEO Sangmok Lee said that users on his platform often act more like “fans” of the companies they hold. “Fans engage in shareholder activism out of love for the company, much like how parents use discipline out of love,” Lee said.
Powerful allies
Korea’s stock market has for years been cheaper than close rivals Japan and Taiwan when it comes to metrics such as the price-to-book ratio, a popular measure of how much a stock is worth compared to the value of a company’s assets. The “Korea discount” doesn’t have a single cause but analysts point to worries about how companies invest, a convoluted series of cross shareholdings and a sense that the interests of company executives aren’t always in line with their shareholders.
Small investors won’t be enough on their own to turn things around, but they have some powerful allies. Local activist funds like Align Partners Capital Management Inc. are on the rise, adding professional savvy to the efforts of amateur investors. Foreign funds are also getting in on the act, expanding their operations in Korea in the hopes that the market is finally ready to turn a corner.
“We’re optimistic that the presidential elections will bring even more substantial changes in South Korea,” said Seth Fischer, founder and chief investment officer of activist fund Oasis Management in a recent Bloomberg Television interview. He added a note of caution, saying there was still a “long, long way to go” in reforming Korea’s corporate sector.
But small investors’ greatest source of support may come from the very top. In a Facebook post before his election win, Lee Jae-myung promised to protect investors’ interests, promote transparency and push companies to appoint directors representing minority shareholders.
His goal? Turning the “Korea discount” into a “Korea premium.”
Lee Jae-myung, the left-leaning politician who won the country’s presidential election last week, tried to position himself as a champion for shareholders.
Ark Invest CEO Cathie Wood says the feud between Donald Trump and Elon Musk shows just how much the latter's companies rely on the government.
Joe Raedle via Getty Images
Ark Invest's Cathie Wood has weighed in on the public feud between Elon Musk and Donald Trump.
Wood said the feud reveals how much Musk's companies rely on the US government.
Trump said Saturday he had no desire to fix his relationship with the Tesla CEO.
The public feud between Elon Musk and President Donald Trump has shown investors just how much control the US government has over Musk's companies, Ark Invest CEO Cathie Wood says.
"I think the way this is evolving is Elon, Tesla, and investors are beginning to understand more and more just how much the government has control here," Wood said in a video posted to the company's YouTube channel on Friday.
Many of Musk's companies have key links to the government and have received billions of dollars in federal loans, contracts, tax credits, and subsidies over the years.
"Elon is involved in companies that are depending on the government," Wood said, pointing to Tesla, SpaceX, and Neuralink as examples.
SpaceX's COO, Gwynne Shotwell, said last year that the company has $22 billion worth of federal contracts. Neuralink, Musk's brain chip company, is subject to FDA regulation, and a less friendly regulatory environment could impact Tesla's robotaxi rollout plans. Tesla stock fell more than 14% on Thursday after Musk and Trump became locked in a series of increasingly bitter clashes.
The feud appeared to begin, at least publicly, on Tuesday, after Musk criticized Trump's "One Big Beautiful Bill." He called it a "disgusting abomination" and said it would increase the national budget deficit.
Tensions rose fast between the once-close allies on Thursday. Trump threatened to cut Musk's government contracts and Musk said SpaceX would immediately begin decommissioning its Dragon spacecraft — which returned stranded NASA astronauts Suni Williams and Butch Wilmore from the International Space Station in March.
Musk later retracted that threat, which Wood said was a sign he was "beginning to walk this back."
Wood said the rift with Trump could, in part, be Musk's attempt to further decouple himself from the Trump administration. Musk announced in April that he would be stepping back from his government work.
"One of the hypotheses out there is that what has happened was partly — not entirely — orchestrated," Wood said. "Clearly, there has been some brand damage to Tesla, which he readily admits, and I think he's trying to disengage from the government and being associated with one party or the other."
Moving forward, Wood said neither Trump nor Musk needed to get "bogged down" with a fight and that she believed both would eventually heed that reasoning.
She also appeared to be confident that Musk could make the situation work for him. She said Musk "works really well under pressure" and that "he creates a lot of that chaos and pressure himself."
"I have no intention of speaking to him," Trump told NBC News.
"I think it's a very bad thing, because he's very disrespectful. You could not disrespect the office of the President," he added.
Vice President JD Vance struck a somewhat friendlier tone when asked about the possibility of reconciliation during a Thursday interview with podcaster Theo Von.
Vance said that while he thought it was a "huge mistake" for Musk to "go after the president," he hoped Musk "figures it out" and "comes back into the fold."
Michael Einhorn wanted to quit China. He really did. He supports the Trump agenda that champions fewer regulations, a lower tax burden for businesses, and elimination of environmental mandates that inflate energy prices. He founded Dealmed on a shoestring in 2006; today it’s one of the two biggest privately owned, non-private-equity-held manufacturers and distributors of medical supplies in the New York–New Jersey–Connecticut tristate market. And he largely buys Trump’s argument that China is cheating on trade. So when the POTUS announced his “Liberation Day” tariffs of 135%, Einhorn figured there must be some decent alternatives to source the 10,000 products including masks, gauze, testing equipment, and gowns that he sells to clinics and health care facilities all over the U.S.
And this wouldn’t even be the first time Einhorn had weaned his company off China. During COVID, when Trump’s first set of tariffs had made importing more costly, Einhorn had pieced together a patchwork of suppliers that had squeezed the Chinese share of his company’s imports down to 15%. How hard could it be to repeat that strategy again?
Nearly impossible, as he found out. Over just five years the manufacturing world has changed so dramatically, that things that seemed possible then no longer make any financial sense. “China dominates the world in most health care manufacturing,” Einhorn tells Fortune. “Their automation, quality, pricing is just superior. I acknowledge the problems with China’s trade practices, but in the lane I play in, it’s just reality. China’s so far ahead of the curve I won’t hurt myself by moving away.”
His odyssey is instructive because it shows how quickly Chinese manufacturing has advanced; how few viable alternatives there are in certain sectors; and ultimately, how even after factoring in tariffs, many businesspeople who want to move away from China, can’t. Says Einhorn: “The administration can scream and yell, but how do you replicate what the Chinese are exporting into the U.S.? It’s just not happening.”
China ramps up
Einhorn’s trade saga starts in the early 2010s, when Dealmed was purchasing only around 15% of what it sold from China, mostly basic stuff such as adhesive tape and paper products such as surgical gowns. In those days, China’s quality for more upscale offerings didn’t match the norm for the U.S. and Europe, notes Einhorn. In 2014, Einhorn made a major pivot from distributor-only to doubling as a manufacturer. Dealmed was buying from wholesalers that purchased the goods from Chinese producers and shipped them from U.S. ports of entry to their own storage facilities and on to Dealmed’s warehouses. Dealmed then provided the final leg of the journey by handling sales to its widely dispersed health care customers served by its corps of reps. Einhorn determined that Dealmed could make more money by eliminating the middlemen, and making the same goods itself, by outsourcing the production to Chinese plants, many of which were churning out the stuff it was getting from the wholesalers. It first moved standard fare such as face masks and washcloths to the contract manufacturing model, then, as the Chinese upped their game, added on-site testing gear and other sophisticated wares.
By 2018, the thriving enterprise was importing 80% of its Dealmed-branded, outsourced products from China. All told, that new business accounted for around 30% of its revenues, and alongside its traditional franchise distributing Chinese brands for wholesalers, its total made-in-China sales contributed 45% of the total top line.
Then Trump’s tariff barrage pushed Einhorn to marshal the first of two dramatic course reversals. In September of 2019, the administration slapped 10% duties on selected Chinese medical exports, and in 2020, raised the levies to 25% on a far longer list. “The first round applied to only a small percentage of our imports from China due to so many exemptions. But the second 25% tariffs hit half of those imports,” recalls Einhorn. The growing antagonism toward China from both political parties, he reckoned, meant the big tariffs were now a lasting fixture of the trade landscape.
Dealmed swapped its purchases of paper for surgical gowns and operating table coverings to the U.S., even though they cost 15% more to make here than in Shenzhen or Nanjing, and relocated its testing-product output stateside as well. By the close of 2019, Dealmed’s glove-making had moved from majority-sourced from China to mainly fabricated in Malaysia. It also found new suppliers in Mexico, Canada, Vietnam, and India. Just before the pandemic struck, Dealmed was collecting just 15% of its revenues from Chinese imports, down two-thirds from its peak two years earlier. “The goal then,” says Einhorn, “was to pull all production out of China.”
How COVID spurred China to get ahead
The “downsize China” gambit proved a winner. The sudden, sweeping outbreak in the nation that birthed COVID shuttered China’s entire export sector in early 2020. By diversifying supply chains to Vietnam, Malaysia, and the U.S., Dealmed succeeded in filling a far bigger share of orders to doctors’ offices and clinics than its still mostly China-dependent rivals. But once the Chinese manufacturers rebooted in the spring of 2020, Einhorn witnessed up close the gigantic profits they reaped both from super-high, shortage-induced prices charged for normally routine stuff, and the surge in volumes for medical supplies the U.S. eventually imported to fight the scourge. He relates that Dealmed was still buying most of its face masks from China in the spring of 2020—and for months it was paying $2 per flimsy cloth covering, seven times the pre-pandemic charge.
The U.S.-China “Phase One” agreement signed that year effectively ended the big duties on medical imports—except for remaining levies on active ingredients in pharmaceuticals—as it turned out, for the next half-decade. Still, Einhorn’s customers suffered greatly from the Chinese shutdown early in the crisis and feared the return of tariffs. Dealmed led the industry in limiting risks by shunning the world’s biggest exporter and widening its global network. Einhorn reckoned that clinics and hospitals would deem Dealmed’s broad diversification a major advantage over its rivals that mainly remained China-centric.
That’s not what happened. “At first, our customers said, ‘We can’t rely on China,’” Einhorn recalls. “They encouraged us to diversify. We told them we were the best positioned because we had the widest global sourcing. Then, our customers quickly forgot about the COVID disruptions caused by China.” He recounts that the group purchasing organizations (GPOs) that negotiate contracts with manufacturers for equipment sales to hospitals and clinics, and medical practices that deal directly with insurers, dropped their brief enthusiasm for diversifying the supply chain, and sought the best prices, no matter where the gauze, face masks, or devices came from. “It was sad,” declares Einhorn. “Being the most diversified didn’t matter to our customers as memories of the pandemic receded. The insurers would only reimburse the providers based on the lowest cost. It was all about price. You couldn’t get the business by saying the product was made in the U.S. or Malaysia or Vietnam.”
As U.S. health care scoured the globe for the best bargains in the aftermath of COVID, the Chinese medical supplies sector embarked on an enormous expansion in scope and expertise. The impetus: the huge profits generated during the crisis. “The Chinese did a fabulous job building out their manufacturing capacity by reinvesting the big money they made during COVID,” says Einhorn. A prime example: INTCO Medical in Shandong province on China’s east coast. In 2020 INTCO multiplied its operating income sixfold over the previous year, and rechanneled the bonanza into building a web of plants that now covers five cities in its home nation, and a big factory in Vietnam, as well as planting sales organizations in the U.S., Canada, Germany, and Japan. INTCO’s sudden rise reportedly made its founder a billionaire.
The immense improvement in China’s medical-industrial engine triggered another U-turn for Dealmed. “We were growing rapidly and added a couple of hundred new products that we manufactured in the two years after COVID,” says Einhorn. “Some drifted back to China. I’d move a product from China to Vietnam, then a new product would go to China. As that happened, we realized that the best source was China. Its manufacturers became more aggressive post-COVID. They doubled down and invested in their products. Their quality became superior to everyone else’s in the world. No other country could match their automation, their capacity. They became very sophisticated.” Most of all, China offered the lowest prices that fit the U.S. providers’ jump from briefly wanting to widely disperse their purchases to grabbing the cheapest deals.
No better options
In 2024 the Biden regime launched a crackdown on the Chinese tech sector, especially targeting Beijing’s semiconductor industry. The mini trade war spilled over into medical equipment. Between late September 2024 and Jan. 1, 2025, the administration imposed “Section 301” duties of 25% on face masks and respirators, 50% on surgical gloves, and 100% on syringes and needles. “The Chinese saw what was going to happen a couple of years before and started building plants in Vietnam,” says Einhorn. “We shifted some of our production to Vietnam. But the companies were backed by companies in China.” Many items including paper products and testing equipment that Dealmed mainly ferried from China, didn’t get pounded by the 301 levies. But even for syringes and other targeted items, Einhorn found that after tacking on the tariffs, he could sell the Chinese products at the same or lower prices than the same goods made anywhere else. “Despite the 301 tariffs, we mainly stayed with China,” he says.
The 301 blow, however, proved relatively mild versus the Trump fusillade to come. Trump started at a 10% levy in February that he raised to 25% in early March, before uncorking the notorious 135% Liberation Day “reciprocal” load on April 9. That fresh heap got stacked atop the 301 duties, bringing the all-in for needles and syringes, for instance, to 235%. The Jenga-like tower of tariffs caused a serious but little reported problem for importers such as Dealmed. “This created a difficult dynamic for managing cash flow,” explains Einhorn. “When a container of syringes hit a U.S. port, I would have to pay the 235% tariff before the product hit the shelves. I would have been laying out enormous amounts of money in advance for a product that wouldn’t be sold for two or three weeks.”
To avoid the huge upfront cash payments, Einhorn severely slowed shipments from China. But he was also wagering that the initial, virtually embargo-sized levies wouldn’t last. His Chinese suppliers designed an elegant solution. “They were very savvy,” recalls Einhorn. “They said, ‘We’ll cut your prices by 10%. We’ll make the product for you, and store it for you, at no charge for three to four months.’ In effect, we were both hedging that the Trump tariffs wouldn’t stay at anything like those triple-digit levels.” When Trump announced the 90-day suspension of the reciprocal tariffs on May 12, the rate on Dealmed’s purchases dropped, from 235% for syringes and 160% on face masks to 130% and 55%, respectively. Einhorn then took delivery, enabling him to sidestep the cash-drain problem, and offer far lower prices to his customers.
For Einhorn, the Trump 30% extra tariffs are far from a deal killer for buying Chinese. “I’ll move some products away, but we’ll stay with China for now as the main supplier,” he declares. Even the total 130% duties aren’t stopping him from successfully selling syringes and needles to U.S. customers. All told, Dealmed’s not planning to backtrack on all the production it restored to China, as its manufacturing improved so notably following the pandemic. The overwhelming majority of gloves and paper contract-manufacturing that went from China to Malaysia, and to the U.S. and Canada, respectively, is now back in the nation where Dealmed debuted its outsourcing model. He finds that Vietnam and other Asian rivals to China not only generally charge somewhat higher prices, but lack China’s quality, range of products, and giant infrastructure that fosters superior economies of scale and guarantees that its manufacturers can meet sudden surges in orders by delivering huge quantities.
Einhorn avows that his company is getting over 40% of its revenues from products made in China, roughly back to the summit of 2018—and a much bigger number in dollar terms, since Dealmed has grown so much in those seven years.
Judging from what he’s seen firsthand, the Trump trade war won’t succeed at its objective. “It’s a misconception that the U.S. can extract ‘burden sharing’ by getting Chinese and other foreign companies to absorb the tariffs,” he says. He sees every day that hospitals and clinics, not the Chinese exporters, are paying the tariffs and passing the costs along to insurers, and hence the individuals and companies that pay the premiums.
He doesn’t have all the answers. “I’d rather do business in the U.S.,” he says. But he notes that issues ranging from extremely high workers’ compensation costs to mandated purchases of high-cost electricity handicap U.S. players on the world stage. “There have to be a series of incentives to lower costs for U.S. manufacturers,” he says. “Unless we can match the quality and pricing of China, my customers won’t pay more because it’s made in the U.S.” For now, he says, it comes down to this: “Cutting out China is not an option.”
Billionaire college dropout Lucy Guo is reportedly the youngest self-made woman on the planet—knocking Taylor Swift off the top spot. But even with a $1.3 billion reported net worth, the 30-year-old cofounder of Scale AI tells Fortune she still pinches the pennies and shops at Shein.
Despite founding and retaining a $1.3 billion stake in an AI unicorn, you won’t catch Lucy Guo wasting her billions on a lavish lifestyle to match her new status.
“I don’t like wasting money,” the frugal 30-year-old tells Fortune.
Of course, sometimes Guo will splurge: If she’s got a 16-hour flight to endure, she says, she’ll opt for business class. And there’s the odd designer dress hanging in her closet for when she needs it.
“But in terms of like daily life, my assistant just drives me in a pretty old Honda Civic. I don’t care,” she says.
“Everything I wear is free or from Shein…Some of them aren’t going to be that great quality, but there’s always like two pieces or so that really work out, and I just wear them every day,” the billionaire founder says, laughing. “I still literally buy buy-one, get-one-free on Uber Eats.”
Guo, who is currently the founder and CEO of the creator community platform Passes, adds that a quote she stumbled on on the morning of our interview perfectly summarizes her approach: “It’s like, act broke, stay rich.”
Millionaires need to prove themselves—billionaires don’t
Guo hit the jackpot after the AI startup she cofounded, Scale AI, was reportedly valued at $25 billion in April as part of a share sale.
Although she left the company in 2018 (two years after founding it), the 5% stake she held on to is now worth an estimated $1.2 billion—making the millennial one of just five female billionaires under 40 according to Forbes’s latest ranking, including Rihanna and Anthropic’s cofounder Daniela Amodei.
It’s why Guo no longer feels the need to prove her wealth with a Patek Philippe everyday watch, or a Hermès Birkin to carry her laptop. That, she says, is the behavior of millionaires.
“Who you see typically wasting money on designer clothes, a nice car, et cetera, they’re technically in the millionaire range,” Guo explains. “All their friends are multimillionaires or billionaires, and they feel a little bit insecure, so they feel the need to be flashy to show other people, ‘Look, I’m successful.’
“I’m not showing off to anyone, right?”
Indeed, for our interview, she’s makeup-free, dressed down, and could pass for any other millennial. But earlier in her career, Guo admits she, too, may have been dripping in designer gear.
“I do think that this is actually something that I personally went through, and I think a lot of people go through when you’re in that middle ground of you’re successful, but not as successful as you want to be.
“And I think the reason most billionaires dress in a T-shirt, jeans, hoodies is that they can. They don’t need to be in the suit 24/7 because they’re done proving themselves to the rest of the world. The rest of the world is just sucking up to them,” she adds. “And I think that’s kind of how I like feel, where I’m past that hump. I don’t really have to prove myself to anyone.
“No one’s going to look at me and point at me like, ‘Ha ha, she’s so broke’ when I’m pulling up in a Honda Civic because whatever, it doesn’t matter.”
‘Cheap’ CEOs just want to sound relatable—but not Guo
Guo’s not the only ultrawealthy person to admit she’s “pretty frugal.” The world’s most powerful have been boasting about their quiet luxury lifestyle for some time now. They’ve been donning logo-less angora wool sweaters and linen trousers that, to the unassuming eye, could be from anywhere. Experts say their wealthy peers can tell who is wearing Zara from who is in Loro Piana, but the point is to resemble people in lower tax brackets.
Others, like Keke Palmer and Warren Buffett, have been less subtle about how they lead very normal lives, despite their huge net worths—with the world’s most famous investor going as far as to call himself “cheap.”
But in Guo’s eyes, she’s one of the few who actually are as cheap as they say they are.
“I think that people want to fit into society. Specifically in America, I do think there is a ‘We hate billionaires’ situation. So because of that, people want to show, ‘Look, I’m not your typical billionaire. I’m frugal,’” she explains.
“I’m not saying it to be like, ‘Let me show the world that I’m not like other billionaires,” Guo adds. “I fully admit it, I have gone through that spending spree when I was more insecure, and I felt like I needed to show something.”
And those who really aren’t spending their millions? They aren’t doing it to be relatable, she says. It’s because like her they had their flashy era—then reached the inevitable realization: “Why am I wasting my money on something that doesn’t matter?”
Lucy Guo is now the youngest self-made woman on the planet—knocking Taylor Swift off the top spot. But even with a $1.3 billion net worth, the 30-year-old cofounder of Scale AI tells Fortune she still pinches pennies.
Traditionally, IPOs are a great deal for Wall Street and its prized clients, not so much for the companies the investment banks take public. Those fabled outfits argue that if they price the shares for the underwriting low enough, so that the hedge and mutual funds and other financial institutions that subscribe get a big “pop” the first day of trading, the grateful buyers will repay the favor by staying loyal and holding for the long term, providing a steadfast ownership base going forward.
Whatever the real benefits of that arrangement may be to the issuer, it most often comes at an enormous cost. Though we haven’t seen many IPOs, and hence much underpricing recently, we’ve just witnessed an outstanding case of the phenomenon in action. It’s one for the ages, and specifically, this case’s stunning dimensions exemplify the craziness that typifies the surreal Age of Crypto.
On June 5, Circle Internet Group, issuer of the highly successful stablecoin USDC, debuted on the New York Stock Exchange (ticker: CRCL). In the days prior, the deal team led by JP Morgan, Citigroup and Goldman Sachs sold 34 million shares to institutional purchasers at $31 per share. The prospectus states that the IPO raised $996 million after underwriting fees of $59 million. Of that total, $434 million flowed into the company’s treasury, and the balance of $562.5 went to a group of large shareholders who sold at the offering, a group that includes co-founder and CEO Jeremy Allaire and several VC funds.
By 1:00 PM, Circle (CRCL) had jumped to $95, and then drifted downwards to close at $82.84, still posting a 167% gain for the day.
The rub: Circle could have piled more than twice as much into its coffers, and its insiders could have collected double the gain, if they’d gotten full price. It appears that the $31 per share amassed in the underwriting was nearly $52 less than what investors were willing to pay once its stock hit the open market. If Circle had pocketed the full $82.84 where its shares closed the day, it would have collected $1.2 billion after fees instead of $434 million. So the process led the crypto highflier to forego $766 million that it could have added to its cash horde. At the first day closing price, the execs, directors and funds, directors would have gotten $1.56 billion, or nearly $1 billion more than their proceeds from the IPO.
Hence, the amount “left on the table” tallies to roughly $1.76 billion.
In the annals of “amounts left on the table” from IPOs, that $1.76 billion looms big. Jay Ritter, a professor at the University of Florida and the world’s leading expert on IPOs, told Fortune that the figure ranks seventh largest for all offerings since 1980. The underwriting versus first day price shortfall is only exceeded by the instances of Visa, Airbnb, Snowflake, Rivian, DoorDash, and Coupang (the South Korean e-commerce platform that sacrificed just a tad more on its 2021 outing at $1.85 billion). The $1.72 billion that went to first day gains for the Wall Street favorites and not to Circle is almost exactly twice the $849 million in cash that, as the prospectus disclosed, the USDC purveyor held on its balance sheet prior to the offer.
Running the numbers on Circle stock
At the market close, Circle’s market cap sat at a towering $16.6 billion. That’s gives Circle a PE of 106 based on its net earnings of $157 million in 2024, making it according to Ritter “an incredibly expensive way to get exposure to cryptocurrencies.” He notes that Circle makes money by issuing USDC, on which it pays nothing to holders, and collects interest garnered by channeling the proceeds into what appear to be Treasuries and other “safe” fixed income securities that as of Q1, were yielding around 4.2%. To grow into its big multiple, Circle needs to mint huge new quantities of the stablecoin so that its spread income rises at a rapid rate. “It all depends if they can grow fast enough and get away without paying interest,” says Ritter. “For that to happen, stablecoins would have to become a preferred way for people to make transactions. What if their coin turns out to be incredibly lucrative, which is what needs to happen given that PE? In that case, a competitor could come in and pay interest,” and grab a big chunk of the stablecoin market from Circle.
Put simply, if competition rises and times get tough, Circle and its shareholders may sorely miss the extra almost $766 million that went to first day gains for the underwriters’ clients and not onto its balance sheet. That’s fives times its profits for last year. Considering the risks in the Circle business model that hinges on virtually creating a revolutionary new medium of exchange, losing that “rainy day” cushion, what now seems a minor sacrifice amid all the hoopla, may someday loom large.
Traders work on the floor of the New York Stock Exchange (NYSE) during the Circle Internet Financial Ltd. initial public offering (IPO) in New York, US, on Thursday, June 5, 2025.
Jamie Dimon has criticized the private equity industry's recruiting of its junior bankers.
On Thursday, the firm warned incoming juniors not to accept future-dated jobs from buyout firms.
Those who do will be terminated, the bank said in a memo.
JPMorgan is warning junior bankers against taking future-dated jobs with buyout firms — or even sneaking out of job training to take interviews.
On Wednesday, JPMorgan Chase's top investment banking brass sent a memo to incoming first-year IB analysts warning them against participating in the private equity industry's annual recruiting ritual. This whirlwind affair is known as "on-cycle recruiting" and promises young bankers lucrative jobs at the end of their investment banking analyst programs, which often last two or three years.
In the memo, John Simmons and Filippo Gori, co-heads of global banking, admonished analysts who accept "future-dated job offer" or "a position with another company before joining us" within their first 18 months of employment, saying they will be terminated if discovered.
"You will be provided notice and your employment with the firm will end," the executives wrote. They said such offers could constitute a conflict for junior bankers working on transactions for PE sponsors who could also be their future employers.
This year's memo appears to be an escalation of a long-simmering personnel issue important to the bank's high-profile CEO, Jamie Dimon.
"I think that's unethical. I don't like it, and I may eliminate it regardless of what the private-equity guys say," Dimon told college students at Georgetown University last year.
Last year, the firm warned incoming junior bankers against the practice, but stopped short of saying it would terminate those who participated.
This year's memo even vowed to terminate junior bankers who dare sneak out of job training to interview with private equity firms, as many did in 2023.
"To succeed in the Investment Banking Analyst Program, your full attention and participation are essential," wrote Simmons and Gori. "Attendance at all training sessions, meetings and obligations is required. Missing any part of the training program may lead to removal from the program and termination," they said.
The memo was first reported by ExecSum, a newsletter offshoot of the popular Instagram account Litquidity. A JPMorgan spokesperson confirmed its authenticity to BI.
As Business Insider has previously reported, private equity's annual recruiting of junior bankers is a frenetic affair that often starts without warning. Young bankers can be asked to drop everything to interview or miss out — resulting in middle-of-the-night interviews or missed vacations and proving a nagging source of disruption for bank bosses.
Dimon has railed against PE recruiting and its impact on his staff. "I think it's wrong to put you in the position," he said in the fall, adding: "You have to kind of decide the next career move before you have a chance to even decide what the company is like."
It remains to be seen how this new rule could impact the future of buyside recruiting. The industry insiders who spoke to BI expressed skepticism over the bank's ability to enforce the new rule.
"I imagine while some junior bankers will be scared off, many will continue to take the risk," Anthony Keizner, a partner at the headhunting firm Odyssey Search Partners, told BI on Thursday. "They always saw banking as a stepping stone, and won't want to be put off starting the next phase of their career."
A former junior banker who now works in private equity agreed.
"Analysts are going to recruit regardless," this person said, adding that young bankers will simply "shut their mouths about" it.
In what appears to be an acknowledge of the competitive pressures young people in the industry face, the bank said in the memo that it would shorten its analyst program from three years to two and a half, offering juniors "quicker advancement opportunities within the firm."
"All the mega funds already fill spots within the first six months," said the private equity professional, who asked to remain anonymous to protect her job. "They're not going to wait for JPM analysts."
Google is still waiting to hear how it will have to address its monopoly in the search engine business — it plans to appeal the judgement — but in the meantime, it also has to answer to its shareholders. According to a report from The Financial Times, Google's parent company Alphabet has reached a preliminary settlement with shareholders who were also suing the company for allowing Google's anticompetitive behavior, which they believe exposed the company to "reputational damage" and "substantial costs."
The new settlement will reportedly force Alphabet to rebuild its "global compliance structure" and will cost the company a minimum of $500 million over the next 10 years to make it happen. At its most basic, this means establishing some kind of committee within the Alphabet board to oversee regulatory issues, of which Google has accrued manyin the last few years.
"A new body made up of senior executives would meanwhile report directly to chief executive Sundar Pichai," FT writes, while another group "consisting of product managers and internal compliance experts," would consult. The goal is to prevent Alphabet and its subsidiaries from making the kind of business decision that led to Google being deemed a monopoly on multiple counts. A judge will need to approve the settlement before the company can move forward, though.
The case against Alphabet officials like Sundar Pichai and Sergey Brin was originally brought by a Michigan pension fund on behalf of shareholders back in 2021. In comparison to the structural changes the US Department of Justice is requesting, paying some money and forming some committees is a small ask. In the grand scheme of things, changing how Alphabet deals with regulation will likely be one of the more minor ways the company's business is forced to change in the next few years.
This article originally appeared on Engadget at https://www.engadget.com/big-tech/alphabet-settles-with-shareholders-over-google-antitrust-lawsuit-195636653.html?src=rss
OpenAI is buying Jony Ive's startup, io, for $6.5 billion, as first reported by The New York Times. The company confirmed the news in a blog post on its website headlined by the photo you see above, which is apparently real and not AI generated. As part of the deal, Ive and his design studio, LoveFrom, will continue to work independently of OpenAI. However, Scott Cannon, Evans Hankey and Tang Tan, who co-founded io with Ive, will become OpenAI employees, alongside about 50 other engineers, designers and researchers. In collaboration with OpenAI's existing teams, they'll work on hardware that allows people to interact with OpenAI's technologies.
OpenAI has not disclosed whether the deal would be paid for in cash or stock. Per the Wall Street Journal, it's an all-equity deal. Open AI has yet to turn a profit. Moreover, according to reporting from The Information, OpenAI agreed to share 20 percent of its revenue with Microsoft until 2030 in return for the more than $13 billion the tech giant has invested into it. When asked about how it would finance the acquisition, Altman told The Times the press worries about OpenAI's funding and revenue more than the company itself. "We'll be fine," he said. "Thanks for the concern." The deal is still subject to regulatory approval.
In an interview with The Times, OpenAI CEO Sam Altman and Ive, best known for his design work on the iPhone, said the goal of the partnership is to create "amazing products that elevate humanity." Before today, Altman was an investor in Humane, the startup behind the failed Humane AI Pin. HP bought the company earlier this year for $116 million, far less than the $1 billion Humane had reportedly sought before the sale.
"The io team, focused on developing products that inspire, empower and enable, will now merge with OpenAI to work more intimately with the research, engineering and product teams in San Francisco," OpenAI writes of the acquisition on its website. "As io merges with OpenAI, Jony and LoveFrom will assume deep design and creative responsibilities across OpenAI and io."
According to The Times, OpenAI already had a 23 percent stake in io following an agreement the two companies made at the end of 2024. OpenAI is now paying approximately $5 billion to take full control of the startup. Whether this points towards physical OpenAI devices on the horizon, and if so what form they take, remains unclear. The description for the YouTube video you see above says, "Building a family of AI products for everyone." Whatever comes out of the acquisition could take years to hit the market, and some of what Ive and his team do may never see the light of day.
This article originally appeared on Engadget at https://www.engadget.com/ai/openai-buys-jony-ives-design-startup-for-65-billion-173356962.html?src=rss
Sofía Vergara says dating someone with less money than her would be a "nightmare."
NBC/Todd Owyoung/NBC via Getty Images
Sofía Vergara, 52, knows what she wants in a partner.
The "Griselda" star says dating someone with less money than her would be "a nightmare."
Income disparity can impact romantic relationships, especially around power dynamics.
Sofía Vergara has a list of what she wants in a partner.
During an appearance on the May 14 episode of the "Today" show, the "Modern Family" actor reflected on her dating life and got candid about some of the traits she hopes her future partner will have.
"I want to say the basic stuff, like health and somebody that loves me," Vergara told hosts Jenna Bush Hager and Erin Andrews. "And somebody tall, handsome."
"I want somebody that has as much money as me or more, because if not, it's a nightmare. They end up resenting you. And I want somebody fun. I need fun in my life," Vergara added.
Vergara has been married twice. In July 2023, after seven years of marriage, Vergara and the actor Joe Manganiello announced they were divorcing. She was previously married to Joe Gonzalez.
A representative for Vergara did not respond to a request for comment sent by Business Insider.
How wealth can affect romantic relationships
Two therapists and one wealth psychologist told BI they've heard similar sentiments echoed by many of their affluent clients.
Income disparity can impact romantic relationships, particularly around power dynamics.
Lami Ronit, a wealth psychologist who runs her own practice from both California and London, told BI she has noticed a difference in how men and women handle being the higher earners in a relationship.
"Women who are the higher earners often face a double standard; they're expected to succeed, but not so much that it threatens traditional gender roles. Men, on the other hand, are typically socialized to feel more comfortable being the financial provider," Ronit said.
When those roles are reversed, both partners can struggle, since the woman may feel she has to downplay her success while the man may wrestle with pride or feelings of inadequacy, she said.
The challenge persists even in some progressive circles where gender norms have been disrupted, Matt Lundquist, the founder and clinical director of Tribeca Therapy, a New York-based psychotherapy center, told BI.
"While it might seem that wealth invites ease — and in many ways it can and should — it also becomes a space where individuals' histories with money and gender expectations play out," he said.
For instance, it could be an issue when one person sees their contributions to the relationship as being more valuable than the other because of the amount of money they possess or earn, Dana McNeil, a relationship therapist and the founder of The Relationship Place, a San Diego-based practice, told BI.
"Many wealthy partners may perceive they are entitled to exert more control and say in the relationship about how money is spent," she said.
This can sometimes cause the less wealthy partner or the one more financially dependent to resent having to rely on their partner's permission to make purchases.
"This feeling of dependence can create a parent/child dynamic that feels like a loss of freedom and autonomy," McNeil said.
How couples can navigate financial disparity
While there is no one-size-fits-all approach, fairness and clarity are key, Ronit said.
"When appropriate, I often recommend that couples talk about proportional contributions rather than equal ones. For example, each person could contribute a percentage of their income toward shared expenses," she said.
When it comes to splitting bills, McNeil says she often suggests her clients have three checking accounts: a personal one for each partner and a joint account for bills and common expenses like going out to dinner or buying groceries.
To make expectations clear, it's important for couples to talkabout money "sooner rather than later," Lundquist said.
"At some point, all couples need to confront the reality that a significant part of the partnership is economic and address both the material and symbolic aspects of this," he said.
It's also important for each partner to determine what they want and understand the trade-offs that may accompany that.
"And on this count, I'll give Sofía Vergara great credit — she clearly knows what she wants," Lundquist added.
Two of the largest cable companies in the US are intent on merging. Charter Communications’ proposed acquisition of Cox Communications — the largest division of Cox Enterprises — will value the former at over $34 billion inclusive of debt.
In Cox Communications, the Cox family, which acquired its first cable business in 1962, already operates the largest private broadband company in America, supplying homes in more than 30 states, and it will be the majority shareholder in the acquisition with a stake of around 23 percent. In a press release, Charter said it will inherit Cox Communications’ commercial fiber and managed IT and cloud businesses, while Cox Communications' residential cable business will move to Charter’s Charter Holdings subsidiary.
"Cox and Charter have been innovators in connectivity and entertainment services – with decades of work and hundreds of billions of dollars invested to build, upgrade, and expand our complementary regional networks to provide high-quality internet, video, voice and mobile services," said Chris Winfrey, President and CEO of Charter. "This combination will augment our ability to innovate and provide high-quality, competitively priced products, delivered with outstanding customer service, to millions of homes and businesses."
The new combined company will continue to operate its cable, broadband and mobile consumer businesses under Charter’s Spectrum brand, and said it will offer existing customers the choice to stick with their current plans or pay less for new bundled services it intends to offer.
Of course, such mega-mergers are rarely cut and dried. Rivals, like Comcast, might attempt to scuttle the deal, while government antitrust enforcers may also not allow the transaction to go through.
This article originally appeared on Engadget at https://www.engadget.com/big-tech/cable-giants-cox-and-charter-agree-to-34-billion-merger-140652859.html?src=rss
Michael M. Santiago/Getty Images; Getty Images; BI
Wall Street banks are proving that generative AI is here to stay, and the tech is not just a fad.
Business Insider has reported on how some of finance's biggest banks are approaching generative AI.
See how giants like Goldman Sachs and JPMorgan are weaving the tech into the fabric of their firms.
Wall Street bank leaders say generative AI is here to stay, and they're weaving the technology throughout the fabric of their banks to make sure.
From trading to payments to marketing, it's hard to find a corner of the banking industry that isn't claiming to use AI.
In fact, the technology's impact, made mainstream by OpenAI's ChatGPT in late 2022, is becoming cultural. Generative AI is changing what it takes to be a software developer and how to stand out as a junior banker, especially as banks mull over how to roll out autonomous AI agents. The technology is even changing roles in the c-suite. But it's also presented new challenges — bank leaders say they are struggling to keep up with AI-powered cyberattacks.
Mary Erdoes, the boss of JPM's asset- and wealth-management business, used these slides to outline how she wants to get her people ready for the "AI of the future."
Is Goldman in its AI era? These real-world stories about employees using AI (in some cases daily) make it seem so. Take a look at how AI is being put to the test across the bank and seniority levels, from C-suites to analysts.
Goldman's top partners and CEO David Solomon are eager to see AI rev up their businesses. From realizing internal productivity gains to capturing more business as clients look to raise money in anticipation of AI development and acquisitions, here's what the top echelon is expecting.
There is no AI without data, and there is no data strategy at Goldman without its chief data officer, Neema Raphael. Raphael gave BI an inside look at how his roughly 500-person team melds with the rest of the bank to get the most out of its data.
AI's impact has ripple effects that go far beyond technology. Goldman's chief information officer, Marco Argenti, predicts that cultural change will be critical to getting the bank to 100% adoption.
Many dollars are being spent on Wall Street's AI ambitions. But how do you measure the return on the investment? Argenti offers some tips on the calculus that can help firms prioritize where to invest.
Thanks to its partnership with ChatGPT-maker OpenAI, Morgan Stanley has ramped up its AI efforts. The exec in charge of tech partnerships and firmwide innovation opened up about how it all started.
Bank of America's chief experience officer, Rob Pascal, details how the bank's internal-facing AI assistant helps bankers collect, record, and review client data. Here are all the ways it's helping employees be more effective and efficient.
Wall Street investment banks prepare for an AI future.
Momo Takahashi/BI
Investment bankers are hopeful that corporate America's obsession with AI could kick off a new era of mergers, acquisitions, and IPOs. From execs stepping into recently created roles to accommodate the sector to industry veterans launching their own AI-focused M&A-advisory firm, meet 11 investment bankers poised to lead Wall Street's AI revolution.
AI could save junior bankers time by automating tedious tasks known all too well by Wall Street's youngest ranks. But it can also make it harder to break into the industry by shifting the skills required for entry.
A former Goldman Sachs managing director built an AI-powered networking tool to spur dealmaking. The budding startup, Louisa AI, already has a few clients, including Goldman Sachs, Insight Partners, and a global exchange.
Running out of money in retirement is a big concern for many Americans.
Economic uncertainty is making it even harder to afford retirement.
These are the top states where your retirement nest egg will go the furthest.
As people live longer and spend more time in retirement, it's more important now than ever to plan for life after your job.
To make matters even more complicated, the ongoing trade war has created a tricky economic backdrop for older Americans to retire in, causing people to delay their retirements, wait to collect Social Security, or "unretire" and go back to work.
That's why being smart about where you live in your golden years can have far-reaching consequences, as housing costs — whether it be a mortgage, property taxes, or rent expenses — are typically the largest part of your monthly expenses.
Financial technology company Remitly compiled data on Americans' retirement savings across the country. How much you need in retirement varies, but the rule of thumb is that by the time you retire, you should aim to have around 10 times your salary saved. Remitly found that Americans between the ages of 55 and 64 have typically saved an average of $537,650 and a median of $185,000 — meaning there's high variability in the amounts that people have saved.
When calculating how much money you need for a comfortable retirement, take into consideration annual expenditures such as housing, utilities, transportation, and healthcare — and also factor in an additional 20% buffer for unexpected costs.
Depending on the state you retire in, the cost of living could fluctuate wildly. Remitly looked at the average retirement savings and expected annual expenditures for a comfortable retirement for each state to calculate how long a retirement nest egg lasts in different parts of the country.
While the annual expenditure to retire comfortably in many states hovered in the $60,000 to $80,000 range, a few states took the cake for sky-high costs of living. In Hawaii, Remitly found the average annual expenditure to be $129,296. California was the second-most expensive state, with annual retirement expenditures coming out to $100,687. In those states, retirement savings will only last 2.8 and 4.5 years, respectively.
On the other hand, Kansas takes first place for sustainable living costs in retirement — retirement savings last 7.5 years on average there.
Listed below are the top ten states where retirees can get the most bang for their buck. The average amount of savings at the time of retirement, the annual retirement expenditures, and number of years the retirement savings will last are also included.
Kansas
A residential neighborhood near downtown Topeka.
MattGush
Average retirement savings: $452,703 Annual expenditures: $60,620 Years of comfortable retirement: 7.5 years
Iowa
Monte Goodyk/Getty Images
Average retirement savings: $465,127 Annual expenditures: $62,565 Years of comfortable retirement: 7.4 years
Minnesota
Minnesota received a top-five ranking for work environment.
Sean Pavone/Shutterstock
Average retirement savings: $470,549 Annual expenditures: $65,828 Years of comfortable retirement: 7.1 years
Virginia
Leesburg, Virginia.
Gerville/Getty Images
Average retirement savings: $492,965 Annual expenditures: $70,342 Years of comfortable retirement: 7 years
Pennsylvania
Shutterstock/Jon Bilous
Average retirement savings: $462,075 Annual expenditures: $66,384 Years of comfortable retirement: 7 years
Illinois
halbergman/Getty Images
Average retirement savings: $449,983 Annual expenditures: $64,787 Years of comfortable retirement: 6.9 years
Connecticut
The skyline of downtown Hartford, Connecticut.
Pat Eaton-Robb / AP
Average retirement savings: $545,754 Annual expenditures: $78,605 Years of comfortable retirement: 6.9 years
South Dakota
Custer, South Dakota
Jacob Boomsma/Shutterstock
Average retirement savings: $449,628 Annual expenditures: $64,856 Years of comfortable retirement: 6.9 years
Michigan
Henryk Sadura/Shutterstock
Average retirement savings: $439,568 Annual expenditures: $63,745 Years of comfortable retirement: 6.9 years
Kentucky
Frankfort, Kentucky
DenisTangneyJr/Getty Images
Average retirement savings: $441,757 Annual expenditures: $64,301 Years of comfortable retirement: 6.9 years
IPOs are making headlines again, which could mean Pat Healy's hopes for "hot and heavy" activity this year may not be completely quashed after all.
Healy is the founder and CEO of Issuer Network, which helps C-suite executives leading IPOs get multimillion-dollar marketing packages from prospective stock exchanges through "bake-off" bidding competitions. For the last 30 years, he's worked behind the scenes on some of the biggest IPOs and corporate spin-offs, including Facebook, Zillow, KraftHeinz, and 3M.
He's won praise from clients such as Jason Child, the CFO of the semiconductor company Arm (and the former CFO of Splunk), and Dick Grasso, a former CEO of the New York Stock Exchange, who sat on opposite the deal table from Healy when he first started Issuer Network in 1995.
He's helped clients get everything from free advertising at Davos to NFL players attending their closing bell ceremonies.
Never heard of him? There's a reason for that. Healy, who appears to be a forefather of this type of bake-off, or contest between companies, runs his business largely by word of mouth. He also refuses to spend a dime on marketing. Just take a look at the company's website — the very picture of a mid-2000s web interface.
"I could make a big deal about some of these things, but that's not who I am," Healy, 74, told Business Insider in an interview. "I believe I do a really good job for people, and I shouldn't go around bragging about it. I just let my customers do the talking."
With IPOs back in the spotlight, thanks to the fintechs Chime and eToro, BI sat down with Healy and spoke to people who have worked with him. We wanted to understand the business and the man behind it, including how he got his start, how an exchange bake-off works, and what he's been occupied with since public offerings took a nosedive in 2022.
IPO activity has whipsawed this year with Trump's tariffs, and Healy saw several of the offerings in his docket pulled due to market volatility. Where things go next is anyone's guess, but Healy is bracing for a potential torrent of demand.
"Who knows when the sun's going to come out?" Healy said. "When it does, I expect all these guys to put their foot on the gas and come to market right away."
In the early '90s, after having held multiple CFO roles at DC-area banks, Healy started doing consulting work for Nasdaq. His job, he explained, was to disincentivize companies from leaving for the NYSE at a time when Nasdaq was a lesser-known exchange for new companies.
"I designed and helped build products that were useful to CFOs so that if they decided to leave Nasdaq, they'd have to give something up," he said. "They'd be less inclined to do so. And it created a stickiness."
That opened Healy's eyes to what he called an unfilled gap. Investment bankers advising on IPOs don't want to get caught in the crossfire between the exchanges, he said (and many banks are themselves listed in the NYSE). There are other professionals who help companies get listed on an exchange, including business consultants, but Healy's appears to have been the first to specialize in this competitive process for marketing perks.
"I discovered that CFOs really didn't have anybody to talk to when they had to make a decision about where they're going to list their stock," he said.
"There was no one else doing it. And there's still no one else doing it," he added.
A 1997 photo of a New York Stock Exchange Family Day featuring Healy and Dick Grasso, the former CEO of the NYSE, is displayed in Healy's office in Chevy Chase, Maryland.
Alyssa Schukar for BI
Issuer Network's first client was AOL, the now (mostly) defunct internet and instant messaging service. Healy said he managed to get a meeting with the CFO and convinced him to let Healy negotiate a "co-branding package" on the company's behalf.
"I just hopped in my car and went over to Tyson's Corner," a Virginia suburb of Washington, DC, where AOL was headquartered at the time. "I visited with the CFO. I said, 'Look, you're on the wrong exchange here.'"
AOL was an example of a service Healy refers to as "switches." Today, most of his business involves advising companies about to go public on which exchange they should be listed. Beyond the trading style and fit of a given exchange, there are hidden levers that companies ccan pull, said Healy.
"Issuers are always focused on the listing fee," he said. "What they don't see is what the exchange is going to make off the listing."
Exchanges cannot technically buy a company's listing, but they can pick up the tab for co-branded advertisements or other marketing perks. That's where Healy comes in. He essentially creates a competition between the exchanges to see which one can offer clients the best package with their listing.
"We create pretty substantial co-branding packages and we literally bake it off," he said.
Typically, a company would contact the exchanges to say it's decided to make its listing decision "a competitive process." Then, Healy said, the company would lay out how it wants to reach customers, and the exchanges would come back with "a co-branding package commensurate with those defined outcomes." From there, it's a back-and-forth of negotiations and adjustments until the company (not Healy, as he emphasized) names a winner. The whole process typically takes about six weeks.
Healy wouldn't reveal how much these deals are worth — except for one, which is public. The package he got for Arm, a semiconductor company that went public in 2023, was worth $50 million.
Healy's medallions from various corporate listings his company has serviced.
Alyssa Schukar for BI
"He understands exactly what the terms and conditions are for the market," Child, Arm's CFO, said. "So he can help you understand, as the issuing company, what is the benefit to the exchange? What is the value they can provide? What are the pros and cons?"
Child first hired Healy when he was Groupon's CFO for the tech company's 2011 IPO. He tapped Healy again in 2023 when Arm went public.
Arm's package with Nasdaq, for example, included several years of advertising at the Davos World Economic Forum in Switzerland. As part of its deal, another Healy client, PNC, got NFL Hall of Famers, including Jerry Rice and Emmitt Smith, to ring the closing bell at the NYSE with company employees in 2010.
There are moments when both sides are unhappy, said Healy, but it's all business — nothing personal.
"I maintain very good relationships with both exchanges," he said. "We have no agenda here other than the best deal for our client. And we don't favor anybody. The minute we do, we lose all credibility and we're out of business."
Of the IPOs that happened during the early days of Healy's business, only a small percentage of his clients were large enough to be eligible for the NYSE. Those that were crossed Grasso's desk, the former NYSE chief told BI.
"Some of my marketing people, in the early days of Pat's business, were highly skeptical," said Grasso, who headed the exchange from 1995 to 2003. "But after a couple of sit-downs with me, I was very comfortable that Pat was going to be fair."
Healy also advises clients on what he refers to as "spins," when a company spins off a part of its business into its own company. Issuer Network has worked on more of these during the recent IPO downturn.
"You've got Comcast spinning, Honeywell spinning, FedEx spinning. You've got quite a lineup of spins out there," he said. "We've done a lot of spins in our day, and we expect to be active in the spin market here for the foreseeable future — through the summer, at least. A lot of these deals will bleed into '26, but their exchange selection decision I expect will be made in '25."
Healy said he couldn't disclose current clients, but noted he worked on a spin with 3M last year. He advised the company as it spun off its healthcare business, now called Solventum, and led a bake-off between exchanges for both the parent and spin company at the same time.
"The winner takes all," Healy said. "So instead of getting a $5 or $10 million co-branding package for 'Spinco,' you get many times that amount for the whole enchilada."
(3M stayed with the NYSE, and Solventum joined its listings.)
Healy declined to discuss his fees, but said he follows a "satisfaction guarantee" policy: He tells clients they can "tear up our invoice" if they aren't happy — something of an anomaly on Wall Street.
Alyssa Schukar for BI
Child called Healy "an old soul."
"He basically just tells you, 'Pay me what you think it's worth' when it's over," Child said. "It's like the opposite of dealing with an enterprise software person."
Healy's humble upbringing might explain his aversion to the spotlight. Growing up, he was one of nine children. His father was a mailman in the Cleveland suburb of Brook Park. The town was home to a Ford manufacturing plant, what Healy described as "an ugly scene" — not necessarily the kind of place you might expect someone who brokers deals on Wall Street for some of the largest corporations in the world to get their start.
"I'm just a hick from Ohio," Healy said. "People like talking to me. And I have something good to offer them. You build a momentum over time by just keeping your nose to the grindstone, delivering good results, and just shooting straight with people."
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