SoftBank's massive WeWork bailout hands ousted founder $1.7 billion golden parachute - CNN

SoftBank (SFTBF) will pump $5 billion into The We Company and accelerate a $1.5 billion equity investment originally due to the company next year, according to a statement released by the two firms.

SoftBank, which is already WeWork's largest investor, is also offering to buy up to $3 billion worth of stock from existing investors and shareholders. SoftBank's Vision Fund will also exchange all of its interests in regional WeWork joint ventures across Asia, excluding the Japan joint venture, for shares in WeWork.

All told, the deal will give SoftBank 80% ownership of the beleaguered startup, an enormous boost over the nearly 30% that SoftBank and its Vision Fund are reported to already own.

The rescue package is expected to value WeWork at about $8 billion, according to a person familiar with the matter. That's a stunning fall from a peak of $47 billion, and an additional embarrassment for a company that not long ago was planning to go public. At the lower valuation, SoftBank (SFTBF) would have put more money into WeWork to date than the company is worth.

SoftBank's stock dropped 2.5% in Tokyo after the deal was announced.

Adam Neumann, WeWork's controversial co-founder, will also step down from the company's board and become a board observer. He already left his role as CEO. Marcelo Claure, SoftBank's chief operating officer, will become executive chairman of an expanded WeWork board. The board will receive voting control over Neumann's shares.

The announcement did not disclose details of Neumann's payout, but the WeWork founder could walk away with up to nearly $1.7 billion. SoftBank's offer to buy Neumann's shares is capped at $975 million, and the package includes an additional $500 million loan to repay a credit line, plus a $185 million 'consulting fee' for SoftBank, the person familiar with the matter said.

Details of Neumann's payout were first reported by The Wall Street Journal.

The deal caps a turbulent two months for WeWork, during which Neumann oversaw a disastrous attempt to take the firm public. The highly anticipated IPO was shelved after investors balked at its valuation and criticized the shared workspace provider's corporate governance.

But in a statement, SoftBank CEO Masayoshi Son downplayed the debacle.

"It is not unusual for the world's leading technology disruptors to experience growth challenges as the one WeWork just faced," Son said.

Claure — who already holds multiple roles as CEO of SoftBank's international arm, SoftBank's chief operating officer, executive chairman of Sprint (S), and runs point on SoftBank's Latin American Innovation Fund — has now been tasked with turning around a struggling unicorn under intense scrutiny.

"The new capital SoftBank is providing will restore momentum to the company and I am committed to delivering profitability and positive free cash flow," Claure said in a statement.

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2019-10-23 07:47:00Z
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Nissan shows Ariya EV, their upcoming Tesla Model Y competitor - Electrek

Nissan has shown a closer-to-production version of their upcoming electric crossover based on the IMx concept earlier today at the Tokyo Motor Show.  The new vehicle is called the “Ariya”, and while Nissan is still calling it a “concept,” it seems to be one only in name, as the car is expected to reach production soon.

Today’s presentation focused more on design than specs, though the crossover is rumored to ship to the US in late 2021 at a “mainstream price point” and have 300 miles of range and a 0-60 time of under 5 seconds.  It’s expected to be similar in size to the Nissan Rogue.

Nissan also stated today that the Ariya will have a dual motor drive configuration, and that it will be compatible with their Nissan Energy vehicle-to-grid plans.

These specs would position the Ariya in the realm of the upcoming Tesla Model Y in terms of specs, though releasing about a year after Tesla’s planned crossover.

The Ariya may also have been inspired by Tesla’s minimalist interior design, because it has far fewer physical controls than most of Nissan’s stable.   The only physical controls are the start button, one knob to operate the car’s 12.3-inch display, and climate controls.  Other controls use haptic touch and are placed on the car’s instrument panel.

Nissan plans to update the Ariya’s software with over-the-air updates for the navigation system, user interface and driving characteristics.

Nissan’s ProPILOT 2.0 driver assist technology will be available on the Ariya.  The newest version of this technology “enables hands-off driving while cruising in a given lane.”

In the same press conference, Nissan showed their IMk concept, a Japan-only EV which fits the “kei car” small urban car aesthetic.  But that concept was unchanged from its previous unveiling.  You can watch the full (short) press conference below:

Electrek’s Take

Nissan has been involved in EVs since very early on, with the Nissan Leaf even beating the Tesla Model S to market.  In that time, the Nissan Leaf has sold more units than any other electric car.

But since the original Leaf release, Nissan has stagnated in offering new models.  Other than a few concepts here and there, the only electric vehicle Nissan has offered is the e-NV200, which started shipping in Japan, Hong Kong and Europe but is not available in North America.

So it’s great to see Nissan getting closer to production on another EV for the US market finally.  The Leaf is a great package, particularly for the price, and has rightly done well in its segment as many directly competing vehicles just don’t seem as serious or well-thought-out.

The design of the Ariya, in my opinion, is quite stunning for a “crossover.”  It thankfully abandons a lot of the ridiculous design elements of the IMx concept it is based on, and results in a design which is aggressive yet still familiar.  I’d put it up against the I-Pace in attractiveness, honestly.

We don’t know what the final specs will look like or if the Ariya will ship looking the same as it did in today’s reveal, but nothing about it screams “this is only a concept car,” and instead everything we know about it seems fairly realistic.

If all this is true, we can’t wait to see it hit the road.  From what we know so far, and if they can manage a good price, it should be a solid entry into the market.  Of course, anything could change before production.

Let us know what you think of the Ariya in the comments below.  And enjoy a gallery of high-resolution images of the car here:

---

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2019-10-23 05:51:00Z
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Kevin Plank started Under Armour in his grandmother's basement; 23 years later, he hands over the reins - CNBC

Kevin Plank, founder and CEO of Under Armour sportswear, in his office in Baltimore, Maryland on October 1, 2009.

Bill O'Leary | The Washington Post | Getty Images

Kevin Plank built Under Armour from scratch in his grandmother's basement in Washington, D.C. In its first full year in business, in 1996, Under Armour did $17,000 in sales. Last year, it did $5.2 billion.

Now, in a surprise move, he announced on Tuesday he is stepping aside as CEO on Jan. 1 and will be succeeded by COO Patrik Frisk.

As executive chairman and brand chief, Plank will still work closely with Frisk.

Baltimore-based Under Armour has faced its share of hurdles. It has been caught up in a sales slump in North America while combating the likes of Nike, Adidas and Lululemon in a cut-throat sports apparel and sneaker market. The company also came face to face with its own #MeToo moment in 2018, when the public learned employees had charged visits to strip clubs on their corporate credit cards. Women at the athleisure company said it was a symptom of poor culture.

Some people are happy to see Plank sticking around since he's been the face of the brand for so long and has held such a loud voice about his vision for Under Armour. 

Plank told CNBC the move was ultimately his decision and that he and Frisk will "divide and conquer" duties. Frisk will still report to him. He added, he will be able to better focus on the longer term.

Growing up in Kensington, Maryland, Plank, now 47 years old, was the youngest of five boys, and was always into sports. He loved football — so much so he earned a walk-on spot at the University of Maryland, later becoming a special teams captain. While he was playing at the collegiate level, he – and his teammates – grew frustrated with always sweating through their cotton T-shirts. Plank, who's described himself as a big entrepreneur growing up, wanted to create a better, sweat-wicking top.

He started by designing a synthetic base layer that was meant to wick away sweat. And he grew Under Armour's product assortment from there, into long-sleeve shirts, cold-weather gear and later shoes for football, cross training and running.

In 1998, Under Armour's headquarters moved from Plank's grandmother's basement in Georgetown to Baltimore, where the company has been based since. A huge moment for the brand would come a year later, when Under Armour landed a deal in 1999 to have its products featured in the Oliver Stone film "Any Given Sunday," starring Al Pacino and Jamie Foxx.

Kevin Plank, chairman and chief executive officer of Under Armour Inc., speaks during the Women's Wear Daily Apparel/Retail CEO Summit in New York, U.S., on Tuesday, Nov. 10, 2009.

Daniel Acker | Bloomberg | Getty Images

Following a welcome surge in awareness thanks to its Hollywood moment, Plank kept his brand focused on sports. And in 2001, Under Armour became the official supplier of the National Hockey League, and had licensing deals with both Major League Baseball and USA Baseball. That gave its name even greater appeal and the validation it needed to secure key sponsorships. It would also lead to even bigger business opportunities.

On Nov. 18, 2005, Plank took Under Armour public, raising $157 million in the company's IPO. Plank has about a 15% stake in the company today, but he controls it through a special voting class of stock.

Under Armour surpassed $1 billion in annual sales five years later, in 2010.

Meantime, the company's "Protect this House" marketing campaigns were working to solidify Under Armour as a very male-centric, high performance-focused brand. Under Plank's tenure, it has signed deals with athletes ranging from golfer Jordan Spieth to NBA star Stephen Curry to professional boxer Muhammad Ali.

But some analysts have said this laser focus on "performance," hyped by Plank, is what has led to some of Under Armour's more recent struggles. So-called athleisure wear — more comfortable items like joggers, women's legging and yoga pants — have exploded in popularity in the U.S., boosting Lululemon and pushing Nike and Adidas to invest more in fashion-forward apparel. But Under Armour has largely been sitting on the sidelines of the trend. It also is still working to grow its women's business, something that hasn't been as much of a priority in the past.

2017 was a tough year for Plank. Under Armour shares cratered more than 40%. The company reported its first quarterly loss. Momentum clearly started to slow.

Under Armour then announced in September 2018 it was cutting 3% of its workforce globally, in a bid to slash costs. Three months later, in a pivotal December meeting with investors, Plank laid out a turnaround plan with fresh five-year goals.

In his presentation, he said 2017 had been a year to "get organized," 2018 was to "get to work," and 2019 was meant for Under Armour to "execute." Results wouldn't come overnight.

"So now in our 23rd year in business, our 14th as a public company our ability to innovate, adapt and improve is stronger and holistically more capable than it's ever been," Plank told the audience. "It's an unbreakable part of our DNA."

If Plank wasn't busy enough trying to get his business back on its feet in 2018, this was also the year a Wall Street Journal report revealed Under Armour had been allowing employees to expense visits to strip clubs. The practice has seen been revoked. But it sparked more questions externally about Plank as a leader. Some women also spoke out about feeling like they didn't have a chance at securing key roles.

At the time, Plank responded saying, "Our teammates deserve to work in a respectful and empowering environment. ... We can and will do better."

Under Armour founder and CEO Kevin Plank

J. Meric | Getty Images

Then, earlier this year, the Journal also reported that Plank flew journalist Stephanie Ruhle on his private jet, taking her advice on business issues. When the relationship was made public, an Under Armour spokeswoman said: "Mr. Plank and Ms. Ruhle are friends. ... The idea that Mr. Plank uniquely listens to any one individual is absurd."

Under Armour's sales in North America dropped 2% in 2018, to $3.7 billion. It September, it named Stephanie Pugliese as its new president of that division, offering Wall Street a glimmer of hope that Under Armour's struggles on its home turf might subside under new management. Pugliese had previously been president and CEO at Duluth Trading Company. But Under Armour is still calling for sales to decline slightly in North America in 2019.

Under Armour shares are up more than 18% this year. But those gains lag rivals. Nike's stock is up about 30% over the same time, while Lululemon shares have rallied more than 68%.

On Tuesday, Under Armour's announcement sent shares up more than 4%.

Under Armour's Patrik Frisk, left, and Kevin Plank

Source: CNBC

"We view the CEO transition as positive and believe Mr. Frisk is the right person to lead the company forward," Telsey Advisory Group analyst Cristina Fernandez said. "The two leaders seem to have a good working relationship and appear aligned in their goals for the company, which should help ensure a smooth transition."

"We expect Under Armour to continue to execute against the plan and long-term targets the company laid out at its December 2018 investor day and don't see a change in strategy," she added in a note to clients.

Plank just last week sat side by side with Richard Branson to unveil the new spacesuits that Under Armour has designed for Virgin Galactic, which the first space tourists are soon set to wear to space. In an interview with CNBC, Plank said: "It's a bit of a coming-out party for what we've been talking about for three years, that people have a hard time getting their arms around where Under Armour truly wants to be. ... The human performance company. ... We want to stand for all things innovation."

As the company's new brand chief, one would expect Plank will continue to make appearances like his one with Branson, touting the company he founded as one sweat-wicking shirt.

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2019-10-22 15:57:36Z
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McDonald's stock falls 3% after earnings and revenue miss estimates - CNBC

Kiosks for ordering food sit in the dining area of a McDonald's restaurant located inside the company's new corporate headquarters on June 4, 2018 in Chicago.

Scott Olson | Getty Images

McDonald's reported weaker-than-expected quarterly earnings and revenue on Tuesday as its promotions struggled to lure U.S. customers away from the competition.

Shares of the company fell 3% in premarket trading.

Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: $2.11 vs. $2.21 expected
• Revenue: $5.4 billion vs. $5.5 billion expected
• Global same-store sales: 5.9% vs. 5.6% expected

The fast-food giant reported fiscal third-quarter net income of $1.6 billion, or $2.11 per share, unchanged from $1.6 billion, or $2.10 per share, a year earlier. Analysts surveyed by Refinitiv were expecting earnings per share of $2.21.

Net sales rose 1% to $5.4 billion, narrowly missing expectations of $5.5 billion. The company reported global same-store sales growth of 5.9%, thanks to strong performance in its international markets.

U.S. same-store sales grew by 4.8% during the quarter, falling short of Wall Street's estimates of 5.2%. McDonald's said national and local promotions, menu price increases and tech-focused upgrades to stores drove domestic same-store sales growth. Traffic to U.S. locations, however, continues to decline.

McDonald's competition has been generating more buzz when it comes to menu additions. With some help from social media, Popeyes Louisiana Kitchen, which is owned by Burger King's parent Restaurant Brands International, sold out of its chicken sandwich in less than a month after its launch this summer.

Burger King has also been stealing some spotlight from McDonald's with the nationwide launch of its plant-based Impossible Whopper. In September, McDonald's announced plans to test a burger made with a Beyond Meat patty in select stores in Ontario, Canada.

This story is developing. Please check back for updates.

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2019-10-22 11:45:09Z
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Under Armour CEO and founder Kevin Plank stepping down, replaced by COO Patrik Frisk - CNBC

Patrik Frisk to replace Kevin Plank as new CEO.

CNBC

A new year will bring a new CEO to Under Armour.

In a surprise announcement, Kevin Plank, who founded the company in 1996 while still in college, announced Tuesday he is stepping down as CEO. He will be replaced by Chief Operating Officer Patrik Frisk, effective Jan. 1. Frisk will also join the board, while Plank transitions to executive chairman and brand chief.

"Patrik is the right person to serve as Under Armour's next CEO," the 47-year-old Plank said in a statement. "As my partner during the most transformative chapter in our history, he has been exceptional in his ability to translate our brand's vision into world-class execution by focusing on our long-term strategy and re-engineering our ecosystem through a strategic operational and cultural transformation."

Under Armour shares jumped 2% in premarket trading Tuesday following the announcement.

Frisk joined Under Armour in July 2017 from his position as CEO of Aldo Group. There, like at Under Armour, Frisk worked under a legendary founder, Aldo Bensadoun. Prior to Aldo, Frisk held various leadership positions at VF Corp.

He has been a key part of Baltimore-based Under Armour's three-year transformation plan. On the most recent earnings call, he listed "lengthy achievements" the athleisure company has logged so far, including optimizing the supply chain and defining the target customer.

However, a big part of Frisk's focus has been revitalizing North America for the brand, which has not yet returned to growth. North America revenue fell 3.2% in its fiscal second quarter, which it reported in July. The company forecast a "slight decline" in the region's sales for 2019. Previously, the company expected North American sales to be "relatively flat."

"The opportunity that lies ahead of us is incredible," Frisk said in the announcement. "As our entire global team continues to lean hard into our transformation, I am honored to lead this great brand toward the realization of its full potential."

Often joining Plank for interviews since arriving at Under Armour, Frisk has been the heir apparent, though the timing of the transition has not previously been made public.

There have been a number of Under Armour executive departures in recent years including Kerry Chandler, chief human resources officer, in October 2018. Chief Merchandising Officer Henry Stafford and Chief Digital Officer Robin Thurston left in 2016.

Some critics have called for executive changes in recent years after its disappointing performance coupled with unflattering news reports about its work culture. Last year, The Wall Street Journal reported strip club visits were allowed as work-related expenses, while reports surfaced citing some female and minority employees felt passed over for promotions or otherwise left out of the company's competitive culture.

The company ended the practice of allowing employees to expense visits to strip clubs in early 2018, and sent a statement to the Journal last November that said it "can and will do better."

Plank founded the company while he was working out of his grandmother's basement. He took it public in 2005 and remains an active CEO inside and outside the corporate walls.

Kevin Plank, CEO, Under Armour

Scott Mlyn | CNBC

Plank is an identifiable face of the brand, often appearing at events with sponsored athletes or other prominent executives like Richard Branson, as part of Under Armour's partnership with Virgin Galactic for new spacesuits just last week.

With Plank holding the executive chairman and also the brand chief titles, he will likely remain very involved in the larger direction of the company, while leaving the daily operational details to Frisk.

Under Armour's brand has largely been associated with performance attributes, but many consumers have been buying athletic wear to run errands around town. This shift toward fashion has helped rivals such as Nike, Adidas and Lululemon.

As of Monday's close, Under Armour shares were up nearly 14% this year. The company has a market value of $9.1 billion. By comparison, Lululemon shares, which have a market value of $26.7 billion, have gained nearly 69%,  while Nike, valued at $150.2 billion, has gained nearly 30%.

— CNBC's Lauren Thomas contributed to this reporting.

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2019-10-22 12:04:14Z
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Under Armour names Operating Chief Patrik Frisk to replace Kevin Plank as CEO, shares jump - CNBC

A new year will bring a new CEO to Under Armour.

Chief Operating Officer Patrik Frisk will replace founder Kevin Plank as CEO on Jan. 1, 2020. Frisk will also join the company's board, while Plank transitions to executive chairman and brand chief.

"Patrik is the right person to serve as Under Armour's next CEO," Plank said in the release. "As my partner during the most transformative chapter in our history, he has been exceptional in his ability to translate our brand's vision into world-class execution by focusing on our long-term strategy and re-engineering our ecosystem through a strategic operational and cultural transformation."

Under Armour shares jumped more than 4% in premarket trading Tuesday following the announcement.

Frisk joined Under Armour in July 2017 from his position as CEO of Aldo Group. There, like at Under Armour, Frisk worked under its legendary founder, Aldo Bensadoun. Prior to Aldo, Frisk held various leadership positions at VF Corp.

He has been a key part of Under Armour's three-year transformation plan. On the most recent earnings call, he listed "lengthy achievements" the company has logged so far, including optimizing the supply chain and defining the target customer.

However, a big part of Frisk's focus has been revitalizing North America for the brand, which has not yet returned to growth. North America revenue fell 3.2% in its fiscal second quarter, which it reported in July. The company forecast a "slight decline" in the region's sales for 2019. Previously, the company expected North American sales to be "relatively flat."

"The opportunity that lies ahead of us is incredible," Frisk said in the release. "As our entire global team continues to lean hard into our transformation, I am honored to lead this great brand toward the realization of its full potential."

Often joining Plank for interviews since arriving at Under Armour, Frisk has been the heir apparent, though the timing of the transition has not previously been made public.

There have been a number of Under Armour executive departures in recent years including Kerry Chandler, chief human resources officer, in October 2018. Chief merchandising officer Henry Stafford and chief digital officer Robin Thurston left at the same time in 2016.

Some critics have called for executive changes in recent years after its disappointing performance coupled with unflattering news reports about its work culture. Last year, the Wall Street Journal reported strip club visits were allowed as work-related expenses at Under Armour, while reports surfaced citing some female and minority employees felt passed over for promotions or otherwise left out of the company's competitive culture.

The company ended the practice of allowing employees to expense visits to strip clubs in early 2018, and sent a statement to the Journal last November that said it "can and will do better."

Plank, 47 years old, founded the company in 1996, working out of his grandmother's basement while he was still in college. He took it public in 2005 and remains an active CEO inside and outside the corporate walls.

Plank is an identifiable face of the brand, often appearing at events with sponsored athletes or other famed executives like Richard Branson, as part of Under Armour's partnership with Virgin Galactic for new spacesuits just last week.

With Plank holding the executive chairman and also the brand chief titles, he will likely remain very involved in the larger direction of the company, while leaving the daily operational details to Frisk.

Under Armour's brand has largely been associated with performance attributes, but many consumers have been buying athletic wear to run errands around town. This shift toward fashion has helped rivals such as Nike, Adidas and Lululemon.

As of Monday's close, Under Armour shares are up nearly 14% since the start of the year. The company has a market value of $9.1 billion. By comparison, Lululemon shares, which have a market value of $26.7 billion, have gained nearly 69% since the year started, while Nike, valued at $150.2 billion, has gained nearly 30% since the year began.

— CNBC's Lauren Thomas contributed to this reporting.

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2019-10-22 10:58:51Z
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Revolut strikes deal with Mastercard to accelerate expansion into the US - CNBC

Revolut's logo is displayed on a smartphone next to a Mastercard-branded debit card issued by the U.K. fintech firm.

Revolut

British fintech firm Revolut has partnered up with Mastercard to help it expand into the U.S. by the end of the year.

The deal means all of Revolut's first debit cards in the U.S. will be issued with Mastercard, while a minimum of half its European cards will carry the payments giant's branding.

Revolut CEO Nik Storonsky said the firm would also use some of Mastercard's new technology, including a platform that enables payments to be sent directly from one card to another.

"When we were trying to launch in the U.S. two years ago, Mastercard became our first offer for it," Storonsky told CNBC in a phone interview, adding he thought the company had "great tech and great infrastructure."

The deal arrives on the heels of a separate partnership Revolut struck with Mastercard's largest rival, Visa, a few weeks ago, which it said would help the firm hire an additional 3,500 people by the summer of 2020 to support its global expansion.

But this new tie-up means that Mastercard will get first dibs when it comes to Revolut cards issued in the U.S. Visa will still be the card network behind 75% of Revolut's cards beyond Europe though, and has said it still plans to support the firm's U.S. launch at some point in the future.

"What we've been working really hard on is accelerating Revolut's launch in the U.S.," Sue Kelsey, Mastercard's executive vice president of global prepaid and financial inclusion, told CNBC. "This will allow us 100% issuance of Revolut accounts on Mastercard" to begin with, she added.

Revolut is one of the many digital challenger banks which have gained a foothold in Europe by offering consumers colorful cards and slick mobile apps. Despite having no branches, the likes of Revolut, Monzo and N26 have gained millions of users between them.

London-based Revolut has already hired 30 employees in the U.S. and says it plans to triple its headcount there over the next six months. Rival fintech firms Monzo and N26 started rolling out in the U.S. earlier this year.

Revolut started out in 2015 with a prepaid debit card and foreign exchange service that let people spend abroad without paying high fees. It has since expanded its suite of products to add support for business accounts and trading in cryptocurrencies and, more recently, shares.

But like many of its peers in the fintech space, Revolut has yet to generate an annual profit. The company's most recent accounts showed losses more than doubled in 2018 to £32.8 million ($42.6 million) from £14.8 million a year earlier. TransferWise is one notable exception in the industry, having been profitable for three straight years.

Still, Revolut has been growing at a rapid pace, and is currently signing up between 800,000 and 900,000 new users a month.

Banking challengers have not been without their teething issues. U.S. start-up Chime recently suffered a widespread outage that left millions of customers without access to their accounts. According to fintech consultancy 11:FS, many upstarts in the U.K. faced similar problems in the early days of operating as they relied on third parties for certain processes.

And Revolut hasn't been immune to controversy, having been hit by a series of negative headlines towards the start of the year. Several reports highlighted a toxic work culture at the firm and alleged issues with compliance. The company denies it ever failed to meet any regulatory requirements, but admitted mistakes were made with regard to culture.

Challenger banks have proved to be a hot investment target for venture capitalists looking to tap into their wild growth. According to data firm CB Insights, the space saw $649 million in venture funding across 17 deals in the second quarter of the year.

Revolut is currently in talks with investors for a new round of funding that could close later this year. A recent Sky News report said the company is aiming to raise $1.5 billion, in a funding deal comprised of $500 million in equity and $1 billion in convertible notes. Storonsky declined to comment on that report.

WATCH: What is fintech?

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2019-10-22 07:03:18Z
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