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Quote of the Day

We’ll be profitable before 2022.”

Uber CEO Dara Khosrowshahi sending good vibes from Davos. Keep in mind: Uber lost $1.46 billion in Q3 2017.

Market Snapshot

  • Netflix led the Nasdaq to record highs.
  • P&G shares fell 3% despite an earnings beat.
  • Ahead of earnings, GE stock jumped 4%—its best day in two years.
  • Amazon and Facebook shares climbed 2% each.



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Davos FAQ

The wealthiest, best-looking, and most powerful people in the world (read: not us) are all spending the week in snowy Davos, Switzerland for the 2018 edition of the World Economic Forum (WEF) summit.

You’ve got questions, we’ve got answers.

Who’s there and why?

To quote Bernie Sanders, “the 1% of the 1%:” CEOs like IBM’s Ginni Rometty and Uber’s Dara Khosrowshahi. Entertainers like Elton John and Cate Blanchett. Heads of state like Indian Prime Minister Narendra Modi and, a last-minute addition to the guest list, President Trump. He’ll be the first U.S. president to attend since Clinton hit the Swiss slopes in 2000.

In 400+ sessions over four days, the attendees will attempt to tackle the biggest topics of the day, from combating economic inequality to regulating Big Tech to understanding the implications of blockchain (good luck, everyone!).

The WEF summed it up with the theme: “Creating a shared future in a fractured world.”

Will Donald Trump play nice with other world leaders?

Should be a mixed bag. President Trump will be delivering the most important speech of the summit on Friday, in which he’s expected to balance his inward-looking “America First” policies with a more kumbaya message to the other politicians in attendance.

Good thing, because all the defining issues of our time—climate change, defeating extremism, leveraging technology for positive change—will require cooperation among the major powers.

Put a bet down: Trump will promote the record-setting stock market and the recent tax cuts.

What’s the party scene like?

Legendary. The global elite are a work-hard, play-hard bunch, and Davos is infamous for its “nightcaps,” a highbrow term for “rager.” One of the most notorious party hosts? Napster co-founder and early Facebook investor Sean Parker. In 2013 he threw a “taxidermy” party, featuring mounted buffalo heads shooting lasers. We remember college.

But amid the small talk and mammal zombies, serious networking gets done. Rumor has it, Mark Zuckerberg became close with his future partner-in-crime, Sheryl Sandberg (now COO of Facebook), at Davos in 2008.

Twitter COO Signs Off, Logs into SoFi CEO Role

Anthony Noto’s long road with the short-messaging platform has come to an end. The COO—who joined Twitter in 2014 as CFO, after helping it go public while still at Goldman Sachs in 2013—has resigned. As of March 1, Noto will step in as CEO of SoFi, an online lender offering student loans, mortgages, and consumer loans.

#Balance

The move comes at crucial points for both companies: Twitter is in the middle of a growth spurt after a better-than-expected Q3, and the fintech startup lost its CEO Mike Cagney last fall to rumors of an untenable workplace culture.

Luckily, Noto is no stranger to yanging someone else’s yin (see: balancing out Twitter CEO Jack Dorsey’s less-than-conventional leadership style), and should provide direction to the forward-thinking banking platform, despite no permanent CFO or CRO.

Twitter’s stock (down 2.44%) subtweeted the announcement.

A Compensation Plan You Musk Hear About

How badly does Tesla (+0.35%) need Elon Musk? According to his new ~$55 billion compensation plan—one that doesn’t even require him to remain CEO—our guess is pretty badly.

But Tesla isn't just handing over money in a metal briefcase. The company outlined 12 major milestones for Musk to hit over the next decade. And with each milestone comes 1% of Tesla’s outstanding shares.

Here are the nuts and bolts:

* Tesla’s market cap currently sits at $60 billion and estimated revenue sits at ~$12 billion (Q4 rev not released yet).
* For Musk to reach the first milestone, Tesla's market cap needs to rise to $100 billion AND revenue needs to jump to $20 billion.
* Each milestone increases with rising market value and revenue expectations—by the 12th milestone, the company’s market cap is expected to hit $650 billion.

Now, let’s stop and digest:

1. A $650 billion market cap would put Tesla ahead of Amazon—assuming Amazon doesn’t grow at all—and shy of Apple’s market cap of $919 billion. Ambitious, especially since Tesla consistently struggles to turn a profit.
2. If Musk reaches all 12 milestones, he would net $55 billion in Tesla stock. Tack that on to his initial 20% stake and watch out Jeff Bezos, Elon Musk could become the richest person in the world at $184 billion.
3. This plan structures Musk’s compensation around market value and financial results—the previous (much smaller) package focused on operational success (think Model 3 production).

Food for thought: The plan reflects Musk’s personality—big payouts for big results. In fact, he won’t even accept an annual salary. The state has to force-feed him a $37,000 check each year which he never ends up cashing.

Snap Rethinks Sharing

Snap has (+0.49%) finally snapped. The company is adding sharing features on its Discover platform and from verified accounts (read: celebrities) in order to promote more virality of its content.

If that feels like a change of pace from its original motto of “Keep those shower pics private”...it is. But as growth stalls, Snap pivots. And letting users share an 8-second clip of DJ Khaled eating a Tide Pod could be just what it needs for a turnaround.

After all, Q3 2017 daily user growth dropped to 3%. Compare that to 17% growth the year before.

What Else Is Happening…

  • Large UK grocers Tesco and Sainsbury are cutting thousands of jobs
  • Watch out, Alexa. Apple’s (+0.02%) HomePod will ship February 9th with a $349 price tag.
  • Disney (-0.62%) will give 125,000 employees a $1,000 bonus and put $50 million into an education program for hourly employees.
  • Barstool Sports raised another $15 million at an estimated $100 million valuation.

Economic Calendar

  • Monday     Earnings: Netflix (+/-), UBS (-)
  •                     Economic Events: Chicago Fed National Activity Index (+)

  • Tuesday    Earnings: Johnson & Johnson (+), P&G (+), Travelers (+), Verizon (-)
  •                   Economic Events: Rich Fed Mfg Index (-)

  • Wednesday    Earnings: Comcast, Discover, Ford, GE, Novartis
  •                         Economic Events: PMI, Existing Home Sales

  • Thursday   Earnings: 3M, American Airlines, Caterpillar, Celgene, FCA, Intel, Northrop Grumman, Raytheon, Southwest, Starbucks
  •                    Economic Events: Jobless Claims, New Home Sales

  • Friday       Earnings: Honeywell, Rockwell Collins
  •                  Economic Events: Durable Goods, GDP

From the Crew: Millennial Money

As the people who bring you a business newsletter, we should (ostensibly) have our financial ducks in a row. But because we’re millennials—by definition (aged 23 to 37), not preferred identification—we don’t. Or at least that’s what we believe because, you know, that’s what we’ve been told.

But according to a new Bank of America report, we’re just as disciplined with our money as older generations—hear that Mom? Here are a few reasons why millennials shouldn’t assume we’re financially doomed forever and can’t afford houses because we’re too busy avocado’ing our toast:

* 63% of millennials save money, with 47% saving $15,000 or more. (But 35% worry they’re not saving enough.)
* 54% budget, with 73% constantly sticking to it. (Even so, the same 73% also believe they overspend compared to baby boomers and Gen-Xers.)
* 49% prioritize retirement savings. (Yet 21% worry they won’t be ready.)
* Millennials are way more likely to ask for a raise at work than any other generation and 80% of those asks get answered.

Clearly a generation that contains multitudes (and contradictions), millennials have one asset in spades: chutzpah.

The Breakroom

Question of the Day

Rob and Bob played a challenging game several times, betting one pebble on the outcome every time. Rob won seven pebbles, while Bob won seven times. There were no ties. How many times did they play?

(Answer located at the bottom of newsletter)

Business Trivia

Which company has just become the largest private tenant of corporate office space in London?

(Answer located at the bottom of newsletter)

Stat of the Day

3.4 million—The number of Netflix subscribers who still receive physical DVDs in the mail, per the company’s earnings report. It's already in the running for Top 10 Stats of the Day for 2018.

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Breakroom Answers

Question of the Day: 21 (Explannation)

Business Trivia: WeWork

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