U.S. agency's virtual currency oversight faces court challenge

BOSTON (Reuters) – An obscure virtual currency called My Big Coin is now at the center of a closely watched case that could determine whether the U.S. Commodity Futures Trading Commission has the authority to combat fraud associated with cryptocurrencies.

FILE PHOTO: Cryptocurrency miners are seen on racks at the HydroMiner cryptocurrency farming operation near Waidhofen an der Ybbs, Austria, April 25, 2018. REUTERS/Leonhard Foeger/File Photo

Amid a crackdown on virtual currency scams, the U.S. regulator in January sued technology entrepreneur Randall Crater and a company he founded, alleging they perpetrated a $6 million fraud on people who wanted to buy My Big Coin.

Lawyers not involved in the lawsuit say that Crater’s case raises a novel challenge to CFTC oversight of cryptocurrencies, which are not backed by any central bank.

His lawyers argue the CFTC has no authority over the virtual currency because it is not a commodity like wheat or cotton or a service that is traded using futures contracts, the typical focus of the agency’s enforcement regime.

“Our argument boils down to the fact that because My Big Coin does not have future contracts or other derivatives trading on it, it is not a commodity,” said Katherine Cooper, a lawyer for Crater.

Lawyers watching the case say a ruling against the CFTC could affect its ability to police virtual currency frauds as the only one on which futures contracts are traded in the United States is bitcoin, whose user base of millions dwarfs that of My Big Coin.

FILE PHOTO: A cryptocurrency mining computer is seen in front of bitcoin logo during the annual Computex computer exhibition in Taipei, Taiwan, June 5, 2018. REUTERS/Tyrone Siu/File Photo

“It would have a chilling effect on the CFTC’s application of its powers in this area,” said Gregory Kaufman, a lawyer with the law firm Eversheds Sutherland.

U.S. District Judge Rya Zobel in Boston is set to hear arguments in the case on Thursday. The CFTC declined comment.

Bitcoin, the most popular virtual currency, and nearly 1,630 others exist have a market capitalization of $276.6 billion, according to cryptocurrency market data site Coinmarketcap.

Regulators have expressed concerns about fraud schemes targeting cryptocurrency users, but questions linger about who has jurisdiction over them.

FILE PHOTO: A worker checks the fans on miners, at the cryptocurrency farming operation, Bitfarms, in Farnham, Quebec, Canada, February 2, 2018. REUTERS/Christinne Muschi/File Photo

The U.S. Securities and Exchange Commission has claimed authority over so-called initial coin offerings in which companies sell digital tokens to raise money. A federal judge in Brooklyn is now weighing whether cryptocurrencies can be considered securities.

To date, the CFTC has announced eight cryptocurrency-related cases.

In its lawsuit against Crater and Nevada-based My Big Coin Pay Inc, the CFTC says the defendants misappropriated $6 million from 28 customers they lured by naming their virtual currency to sound like bitcoin and further claiming it was backed by gold.

Lawyers for Crater contend, however, that My Big Coin is not a “commodity” under the Commodity Exchange Act because it is neither a tangible good nor a service on which future contracts are being traded.

The CFTC notes that in March, a federal judge in a different case, U.S. District Judge Jack Weinstein in Brooklyn, ruled for the first time that virtual currencies can be regulated by the agency as a commodity.

But Crater’s attorneys counter that ruling involved bitcoin, for which futures are traded.

Neal Kumar, a lawyer at the law firm Willkie Farr & Gallagher, said Crater may still lose because the Commodity Exchange Act defines services as commodities not just when they currently have futures contracts associated with them but in the future could.

“The argument that falls flat for them is that there needs be current or existing futures contracts,” he said. “And that’s just not what statute says.”

Reporting by Nate Raymond in Boston; Editing by Anthony Lin and Steve Orlofsky

Go Daddy founder Parsons buys revamped Arizona center for $133 million

NEW YORK (Reuters) – A real estate concern of Bob Parsons, founder of web hosting company Go Daddy, said on Tuesday it agreed to pay $133 million for a revamped retail center in a Phoenix suburb that was a major foreclosure in 2011 following the Great Recession.

The 76-acre Westgate Entertainment District in Glendale, Arizona includes 533,000 square feet of retail, office and residential space that was redeveloped by iStar Inc, a real estate investment trust headquartered in New York.

“If you go back to the depths of the recession in Phoenix, Westgate was one of the poster children for big failed white elephant real estate developments,” Los Angeles-based David Sotolov, head of West Coast originations at iStar, told Reuters.

The transaction, which includes 33 acres of undeveloped land, is one of Arizona’s largest retail real estate deals and marks the turnaround of a soured development with the popular “experiential” focus, iStar said in a statement.

Parson’s YAM Properties LLC said a boutique hotel and more housing, office and specialty entertainment are under consideration in a five-year plan, which aligns with the Super Bowl in 2023 at the adjacent University of Phoenix Stadium.

Parsons is a major Phoenix philanthropist who owns various local businesses through parent YAM Worldwide Inc, including more than $630 million of metro-area commercial real estate.

Westgate was a $2 billion mixed-use center championed by local developer Steve Ellman with the Gila River Arena, home of the Arizona Coyotes hockey team, as its anchor. The university stadium is home to football’s Arizona Cardinals.

In 2011 iStar Financial foreclosed on part of the property after the Ellman Companies failed to pay the balance of $97.5 million in debt on what was called the Westgate City Center, the Arizona Republic newspaper said at the time.

The size, tenant mix and entertainment opportunities, along with its proximity to the sports arenas, make Westgate a high-profile asset, said Dan Dahl, who heads YAM Properties.

“This property really fits our profile,” Dahl said. “Every business has a mess, and we’re here to help them clean that mess up,” he said, explaining the naming of Parsons’ companies with an expression from his youth: “You’re a mess!”

Reporting by Herbert Lash; Editing by Daniel Bases and David Gregorio

Micron: The Case For $100

When it comes to hunting for value in the technology sector, those two concepts – tech and value – seem to be irreconcilable. And while this is true of most of the sector, it’s not true of memory stocks; and within the memory sector, one name screams value more than any other: Micron Technology (MU).

I’ve been a longtime bull on Micron, especially after the company’s recent upward guidance revision to Q3 estimates, which kicked off a fresh rally in Micron shares above $60. The question on my mind, and on many investors’ minds, is simple: do we take the ~50% year-to-date gains on Micron and run, or do we hold on in the hopes of further appreciation?

In my view, the Micron rally still has plenty of legs. In addition to the catalysts coming out of Micron’s Q3 guidance revision, including the updated NAND/DRAM market predictions that Micron’s management made during its analyst day (covered in a prior article), Micron has several other drivers beyond the incoming Q3 results that can propel shares even higher, which we’ll discuss in this article.

Also consider the fact that while Micron has enjoyed the strongest performance of any of the major memory stocks thus far in 2018, it’s also still the cheapest. From a forward P/E perspective, which is how most analysts view Micron and the memory space, Micron is still a touch below Western Digital (WDC) and substantially lower than Seagate (STX). The divergence to Seagate’s valuation is perhaps most startling of all – Micron is a thought leader that has just started shipping its next-gen 3D NAND product, while Seagate is primarily an HDD manufacturer with little prospects for growth.

Chart

MU PE Ratio (Forward) data by YCharts

I’m holding out for Micron to touch at least $100 before letting go of the shares. It’s not an arbitrary round number that would inflate the stock’s valuation – note that analysts’ EPS targets for this year and next have moved up over the past month as Micron itself revised its guidance ranges. Wall Street is now expecting $11.56 in EPS for this year and $10.86 for next year, according to Yahoo Finance. A $100 price target would still imply a cheap single-digit P/E ratio of 9.2x against FY19 EPS estimates, and implies 64% upside from current levels.

If it sounds too good to be true, consider the fact that the reason memory stocks trade at such low P/E multiples is that, like auto stocks, the memory market has been known to be highly cyclical. In Micron’s latest memory market update given during its May analyst day, however, it has noted that supply growth will be slightly moderated compared to what it had originally expected, and that demand growth (on a “bits” basis) will match supply growth. Micron expects supply growth of 20% in DRAM against 20% demand growth; as well as 40% supply growth in NAND against 40-45% demand growth. This implies a balanced market and stable prices.

If the memory market has matured such that it no longer has the dramatic peaks and valleys in pricing as in the past, then memory stocks’ P/E multiples can normalize as well. A 9-10x P/E multiple for Micron, in my view, is only a small step in that direction. Stay long.

$10 billion buyback another catalyst for EPS growth

If you’ve paid even an iota of attention to Micron over the past several quarters, you’re well aware that the company has been able to drive massive earnings growth organically – that is, through pure revenue and operational improvements alone. Last quarter, Micron’s Q2 EPS of $2.67 represented 4x growth over the prior Q2. Well, Micron’s May 21 announcement of a new $10 billion buyback program is about to add some extra fuel to Micron’s EPS growth capabilities.

In general, Micron’s stock comp programs have boosted the share count over time. Here’s a look at Micron’s average diluted shares over time, taken from each quarter’s 10-Q filing:

  • 2Q18 (most recent): 1.159 billion shares
  • 1Q18: 1.156 billion shares
  • 4Q17: 1.114 billion shares
  • 3Q17: 1.106 billion shares

Micron’s EPS growth has essentially been achieved in spite of the increase in share count, and this upward creep in shares is about to go in the reverse direction. With an open-ended $10 billion buyback program, Micron has the capability to buy back 14% of its current market cap of $71 billion. Put another way, at its current share price of $61, if Micron were to deploy the full $10 billion it could immediately retire 164 million of its current 1.159 billion shares and produce about 16% “inorganic” earnings growth through share count reduction.

This $10 billion buyback isn’t just management blowing smoke, either. Micron is fully capable of financing this buyback through the $8 billion of cash on its Q2 balance sheet as well as the $3.8 billion in free cash flow it generated in the first six months of FY18 (Q1 and Q2) alone. Micron has newly committed to returning to shareholders at least 50% of FCF along with its new buyback program.

In essence, I think of the new buyback program as a fail-safe for if/when NAND and DRAM prices do cool off. In the event that Micron sacrifices a bit of margin and sees earnings growth headwinds from the operational front, it can still rely on its huge buyback program to drive positive y/y EPS comps. Analysts’ EPS estimates for FY19 imply a -6% contraction – Micron’s buybacks could drive this figure to positive even with slight memory pricing headwinds factored in.

3D NAND shipments taking off

NAND has always been the lesser portion of Micron’s business, with DRAM taking up two-thirds of its revenues. But Micron’s late May announcement that it began 3D NAND shipments in partnership with Intel is also worth mentioning.

3D NAND has long been awaited in the industry as it allows for the capability of stacking more memory chips in a smaller space. As envisioned by Gordon Moore of Intel years ago, the goal of semiconductor manufacturing is the continual improvement of packing more and more computing power into a smaller and smaller space year after year. 3D NAND allows manufacturers to stack memory chips vertically within the memory unit, unlike 2D NAND where memory chips are consolidated into a single flat layer, eating up space.

The Micron/Intel partnership is universally recognized as a technology leader in 3D NAND. Here’s the quote from an Intel VP highlighting the benefits of 3D NAND, taken from the press release:

“Commercialization of 1Tb 4bits/cell is a big milestone in NVM history and is made possible by numerous innovations in technology and design that further extend the capability of our Floating Gate 3D NAND technology,” said RV Giridhar, Intel vice president, Non-Volatile Memory Technology Development. “The move to 4bits/cell enables compelling new operating points for density and cost in Datacenter and Client storage.”

Bit growth in NAND shipments beginning in Q3 and beyond is another major driver for Micron’s earnings that may not yet have been factored into analysts’ expectations for EPS decline next year.

Key takeaways

Despite the robust performance of Micron shares year to date, the company still has plenty of room left to rally. Aside from Micron’s expectation of a stabilized memory pricing environment driven by balanced supply/demand growth, the company is also supporting its EPS growth via a huge new buyback program and new product launches (3D NAND) that can greatly increase its bit shipments.

Micron remains one of the truly value-oriented plays in the technology sector, and it even looks cheap against other undervalued memory stocks. Investors are encouraged to continue building a position, especially as upcoming catalysts (Q3 earnings) may prove to be another strong upside catalyst.

Disclosure: I am/we are long MU, WDC.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

First 'Assassins Creed Odyssey' Screenshots Leak Ahead Of E3

Credit: Ubisoft

Assassin’s Creed Odyssey screenshots have leaked online prior to Ubisoft’s big reveal.

Screenshots for Assassin’s Creed Odyssey have leaked online prior to Ubisoft’s big reveal this afternoon.

The game, which is set in ancient Greece, looks remarkably similar to last year’s Assassins Creed Origins, which was set in ancient Egypt around 47 BC.

Judging by these screenshots, this game takes place much earlier, making it a prequel to the Assassins’ origin story. There’s a bit of evidence for this in the screens, though we’re left with questions.

It appears the game takes place during the War Peloponnesian, or about 431 – 404 BC. In many of the screenshots you see missions instructing you to fight, kill or weaken the Athenians. One mission instructs you to destroy Athenian war supplies and destroy weapon racks to reduce the ‘Nation Power’ of the Athenians. ‘Delians’ are also mentioned.

It would seem, then, that the protagonist is on the side of the Spartans if this does, in fact, take place during the war between Sparta (the Peloponneisan League) and Athens (the Delian League.)

Then there is a mission in one of the screenshots that says ‘Return to Thaletas.’ While the exact date of the historical Greek musician and poet is uncertain, it’s possible that he lived as far back as the 9th century BC. Either way, Odyssey appears to take place hundreds of years before the events of Origins.

How the Assassins and Templar fit into this—likely not named either of those things—remains to be seen.

Here are the screenshots, courtesy of Gematsu:

The protagonist:

Credit: Ubisoft

The protagonist.

Credit: Ubisoft

The protagonist.

Credit: Ubisoft

The protagonist and Kyra.

Naval warfare:

Credit: Ubisoft

Naval warfare.

Credit: Ubisoft

Naval warfare.

Credit: Ubisoft

The map:

The map is largely aquatic, making it more likely than ever that we’ll see plenty of naval warfare.

Credit: Ubisoft

Menus/UI

Credit: Ubisoft

Credit: Ubisoft

Interestingly, in this last screenshot you see Hunter Damage, Warrior Damage and Assassin Damage, presumably for bows, melee and stealth attacks.

Combat and Gameplay

Credit: Ubisoft

Credit: Ubisoft

Kick the Athenian

Credit: Ubisoft

Shooting with a bow.

Credit: Ubisoft

The eagle returns.

All told, the game is looking quite good though very similar to Origins. That game was the best in the series since Black Flag, so I’m not particularly worried about similarities. It is interesting that, at least in these screenshots, there appears to be no shield for the player character. It seems like shields would have been more pronounced in ancient Greece than in Egypt. Of course, it could just be these particular missions and menus don’t feature the shield. Or it could be that Ubisoft decided shields were a poor fit for this series.

We’ll know more tomorrow afternoon when Ubisoft is set to hold its big pre-E3 press conference. See the full press conference schedule (with links to livestreams) here.

See Also:

Amazon Founder Jeff Bezos Has Never Been Richer Than He Was This Week

The fortune of Amazon founder Jeff Bezos, the world’s only centi-billionaire, continues to grow with Amazon, which has seen its share price gain 42% this year. (Photo by David Ryder/Getty Images)

The stock of e-commerce giant Amazon took another step toward the stratosphere this past week, boosting the net worth of founder and CEO Jeff Bezos to an eye-popping $138.8 billion at the end of trading on Friday, according to Forbes’ Real-Time rankings of the world’s billionaires. That makes the world’s only centi-billionaire $3.3 billion richer than a week earlier.

The uptick in the company’s stock occurred amid a flurry of news: Amazon Prime announced it would live-stream English Premier League soccer games in the U.K; Whole Foods grocery store chain, which Amazon purchased last year for $13.4 billion, expanded its discounts for Prime members; and analysts released bullish reports about the company, which is the second largest in the U.S. after Apple in terms of market capitalization.

Bezos owns 16% of the e-commerce colossus, a stake that accounts for an estimated 95% of his fortune. The performance of Amazon’s stock has a direct, and significant, impact on his wealth. Since markets opened on Monday, Amazon’s share price may have only increased 2%, closing Friday at $1683.99, but for Bezos, that translates into billions of dollars.

The steady rise of Amazon stock this year—it is up 42% year-to-date—made Bezos the richest person in the world on Forbes’ annual Billionaires List for the first time, unseating Bill Gates.

Bezos’ position would have been hard to predict in 1994, when Gates was the richest person in the world and Bezos had just launched an e-commerce bookstore out of his garage in Seattle. In 1997, Bezos took Amazon public at $18 per share. He debuted on the The Forbes 400 list of the richest Americans the following year.

Though Bezos is the richest to see his fortune rise this week, he is not alone. Nike founder Phil Knight’s net worth grew by $800 million this week as retail stocks, particularly those of athletic brands, ticked up. Nike shares rose 3% over the past week.

The shoe company may have not brought Lebron James and the Cleveland Cavs enough luck to beat the Golden State Warriors in the NBA finals, but its success has lifted Knight’s fortune to $32.9 billion.

For more on the world’s richest and brightest entrepreneurs, follow me on Twitter @MadelinePBerg. Got tips or word about a new billionaire? Go to Forbes.com/tips.

French emergency room tests virtual reality path to pain relief

PARIS (Reuters) – The very thought of visiting a hospital emergency department is stressful enough for many people, even without the discomfort or pain of an examination or treatment.

A nurse treats a patient wearing the 3D therapeutic virtual reality headset developped by Healthy Mind start-up, at the emergency service department of the Saint-Joseph Hospital in Paris, France, June 7, 2018. The headset immerses the patient in the heart of a Zen garden or an enchanted forest to counter the pain rather than increase the doses of painkillers. REUTERS/Philippe Wojazer

Enter an immersive virtual-reality program created by three graduates being used in France to relax patients and even increase their tolerance of pain – without resorting to drugs.

“What we offer is a contemplative world where the patient goes on a guided tour, in interactive mode, to play music, do a bit of painting or work out a riddle,” said Reda Khouadra, one of the 24-year-olds behind the project.

As patients are transported by chunky VR goggles into a three-dimensional world of Japanese zen gardens or snowy hillsides, they become more tolerant of minor but painful procedures such as having a cut stitched, a burn treated, a urinary catheter inserted or a dislocated shoulder pushed back into place.

Slideshow (2 Images)

“The virtual reality project … enables us to offer patients a technique to distract their attention and curb their pain and anxiety when being treated in the emergency room,” said Olivier Ganansia, head of the emergency department at the Saint-Joseph Hospital in Paris.

“I think in 10 years, virtual reality won’t even be a question any more, and will be used in hospitals routinely.”

The Healthy Mind startup is not a world first but has landed a $20,000 prize from a university in Adelaide, Australia – which will now pay for the three founders to present their project at Microsoft’s headquarters in the U.S. city of Seattle.

Writing by Brian Love; Editing by Kevin Liffey

The Next Stage: How to Grow a Successful Retail Company

There are countless stories (including a bunch I’ve written) about startup launches: When time and resources are in scant supply, and the fate of the company seems to hang on every single decision. There are plenty of stories about exits. (I’ve written some of those, too.)

But what you don’t see as often are stories about the middle stages of a company’s life, which in many ways can be more difficult than the startup phase: Expanding a team, maintaining growth, building a sustainable infrastructure, maintaining the right culture… for many entrepreneurs, that’s when the leadership and business skill rubber really hits the road. 

So let’s change that.

This is the first in my series, The Next Stage, where I check in with entrepreneurs and companies I’ve written about in the past. This time it’s Brian Berger, the CEO and co-founder of Mack Weldon, makers of my favorite polo shirts and, although it sounds odd to say out loud, my favorite underwear

The first time we talked I learned how Berger and co-founder Michael Isaacman started designing and selling their own socks and underwear brands. (Today they offer over hundreds of items of men’s clothing: Underwear, socks, t-shirts, polos, bathing suits, active wear, accessories… they’ve sold millions of units and enjoyed triple-digit sales gains every year since their launch.)

For many entrepreneurs, time passes in dog years: Every year seems like seven. Looking back, what has changed for you and the company?

(Laughs.) That’s true and yet the opposite is also true: When you’re busy it feels like you never have enough time. 

Overall the company is doing great. We’re growing really fast. Maybe most importantly we’ve proven a lot of things to ourselves over the past year that we quite honestly questioned as to whether they would define how we thought about product strategy, marketing, etc.

We’re a brand focused on offering as little as possible to our customers so we don’t create overwhelming choices and confusion. So whenever we consider expanding into a new category, we have to feel very sure that product are differentiated enough to warrant introducing a new choice to our customer.

That’s a tough balance to strike. Growth is important, but at the risk of being Captain Obvious, not at any cost.

A good example is last spring when we launched Airknit fabric in underwear. The customer adoption has been amazing.

We initially thought it would be something customers would only use during at the gym, when they’re active, and surveys showed that was true… but 80 percent were also wearing them as an everyday item.

The product category has grown enormously. If you take our underwear fabric, year over year it had grown about 80 percent, and last year it grew by several hundred percent and is a significant part of our total offerings. 

Our customer base has a huge appetite for innovation.

That’s more of an extension than a new category, though.

True. So we also we stepped into soft goods, polos, sweats… and  one of the things we were testing towards the end of last year was what that would look like in relevant hard goods: Backpacks, gym bags, wallets, etc.  

We didn’t make gigantic inventory commitments, but there was a real question in terms of whether our customers would purchase them — and would there be confusion or brand dilution, with customers thinking, “Why are you doing this?”

What we overwhelmingly found was that customers were excited by the product category. We sold through all of our buys well ahead of plan. We sold through the travel kit, the gym bag, and the wallet at 50 percent or higher sell-through rate within a quarter, our Ion bag is off to a successful start…

What’s great is that shows the fundamentals of how we think about product innovation, how we translate that into adjacent categories of not just soft goods but hard goods… it shows we’re on the right track.

That’s what every brand aspires to: Extensions that complement and don’t distract.

The key for us is having a clear product strategy — and making sure we never forget that strategy. When a customer considers our Pima t-shirt, they’re looking for what’s different about it.

If we deliver on that, the next thing we put in front of them better measure up, too.

What about marketing? You’re primarily an online retailer.

There were two big stories in 2017. The first was channel expansion. We started taking advantage of content marketing, placing links at the bottom of news articles, referring customers to pieces of content about the brand… that has been a really interesting way to tell a product story beyond what we can do in an ad.

It’s not sexy, but it works. That kind of content marketing was 20 percent of our ad spend in 2017.

We also built a home-grown customer loyalty program. Historically we rewarded customers on a transaction by transaction basis in terms of the value of the items in their shopping cart.  If you had $200 in your cart, you got 20 percent off. If you had $150, you got 15 percent off, $100, 10 percent.

That was our way to not run sales, something we don’t do.

That program worked well. Customers saw the value.

But then we wondered if customers were waiting to purchase in order to maximize the value of the benefit. So we flipped it on its head and made it customer-centric.

If you’re a customer and spend a certain amount within 12 months, you can qualify for two levels. First is free shipping. The second is if you spend $200 in 12 months, you get 20 percent off every purchase, and free shipping, and can get special gifts, try out products we’re testing…

What we’ve found is that customers reach the $200 threshold at a 17 percent higher rate than before, and our total number of orders has also increased.  

Makes sense: Some percentage of people who decide to wait will never return. Or they’ll come back and buy something they didn’t really want just to get the discount, or… there are plenty of reasons shopping carts get abandoned.

Time is not your friend in a business like this. (Laughs.)

But in one way time can be your friend. Over time, as the program matures, we feel certain it will help us build even better customer relationships.

That’s what we really value. The real juice in the business comes from creating loyal, long term customers.

Plus, at a fundamental level, we want to constantly reinforce our value proposition. Let’s say we put out a running tight and you want to try it but your order isn’t big enough to qualify for a per-transaction discount… now you’re much more likely to say, “Hey, I’ll try that.”

And that gives us additional touch points with our customers, which gives us additional ways to delight them and to build that long-term relationship.

You continue to grow at a rapid rate. What about people?

We continue to build our team. We added 10 people across all the important areas of our business. But at 30 people, we’re still a pretty lean team.

We made building our team a focus in Q2 and Q3. We also worked hard to create an employer brand so we could attract great people and give them a great experience. NYC is a great environment to work in — and that means it’s a qualified candidate’s market. They have choices. We want to make sure we’re a company great people would choose.

At some point a bigger team means changing roles and responsibilities to some degree; you can’t operate the way you did when there were, say, 10 of you.

We’re at that operational inflection point where we’re trying to create more focus and more definition of roles and departments. People — including me — have to get comfortable staying a little more in their lanes.

That’s a reality, but it’s always an interesting shift. When you’re scaling a business, no one can always be in the loop about everything. That’s a tough mental shift. 

I’m okay with letting go some. What’s critical for me is to make sure we bring in the next level of leadership so we can streamline those communications as well.

I’m pretty hands-off in parts of the company, having maybe one meeting a week… and in others I’m much more deeply involved day-to-day.

The goal is to get to a place where our structure allows everyone to operate at their best. When you’re growing a company that’s always a work in progress. (Laughs.)

You’ve recently started creating some retail partnerships.

Third-party retail partnerships have created really interesting opportunities to put physical product — in the right environment — in front of customers. For example, we have a partnership with Equinox; we launched Airknit with them, did joint creative, did a photo shoot with their gym trainers, we co-branded packaging…

We also have a small partnership with J. Crew with some of our core products in 9 of their top men’s shops, mostly in NYC and on the West Coast. That will evolve into something more substantial, with unique products only available in their shops. And we have a partnership with Todd Snyder, the acclaimed menswear designer. He has a lot of credibility in the menswear space.

Those partnerships aren’t huge needle-movers in terms of units… but they’re great in terms of branding, credibility, etc.  

All are situations where we’re making money, but our principle driver is really market awareness. 

Keep in mind we exist because shopping for underwear and socks is an awful retail experience. So, if we end up on a shelf with 20 other brands… that’s counter to why we started the business. If we can be featured in a unique way, if it puts our product in front of the right customers, we’re happy to explore that… but it has to fit our brand.

Where we do it matters, but how we do it matters most.

If you had to sum up the last year, what have you learned? And what’s next?

We’re working on expanding internationally. We’re in product categories that definitely translates globally.

We’re in Canada now, and we’re thinking about places where we can have a lot of success, like western Europe, Australia, etc. The logistics need to be addressed, but they aren’t overly complex… and certainly are issues that other businesses have worked through.

What have we learned? It’s definitely not a new lesson: You have to keep your head down and grind it out. There are no freebies in this business. There are no freebies in any business. 

You always have to stay true to the reason you started the business. For us the original thinking was to choose a product category that had been overlooked or had become a commodity and provide a specific upgrade. 

When you do that, when your customers realize you focus on product innovation, utility, comfort and fit… and you provide those things across a broad range of products… then you have a real chance. 

And then you have to keep your head down and keep doing exactly what you set out to do.

That, ultimately, is how you build a brand.

The 10 Cities With The Most Student Loan Debt

Shutterstock

How much student loan debt is in your hometown?

According to Make Lemonade, there are more than 44 million borrowers who collectively owe more than $1.4 trillion in student loan debt.

A new study from Lending Tree analyzed the places with the most student loan debt.

Let’s see if your town made the cut.

Here are the Top 10 cities with the most student loans debt — and what you can do to pay off your student loans faster.

10. Charleston, South Carolina

(Photo by Christopher Pillitz/ In Pictures via Getty Images)

Median Loan Balance: $20,469
Average # of Loans: 3.9
% Who Owe More Than $50,000: 24.4%
% Who More Than $100,000: 7.0%

9. Columbia, South Carolina

Median Loan Balance: $20,560
Average # of Loans: 3.9
% Who Owe More Than $50,000: 23.3%
% Who More Than $100,000: 7.9%

8. Jackson, Mississippi

Median Loan Balance: $20,469
Average # of Loans: 4.0
% Who Owe More Than $50,000: 24.8%
% Who More Than $100,000: 8.7%

7. Birmingham, AL

(Photo by Michael Wade/Icon Sportswire via Getty Images)

Median Loan Balance: $20,679
Average # of Loans: 3.6
% Who Owe More Than $50,000: 24.2%
% Who More Than $100,000: 7.7%

6. Little Rock, Arkansas

(Photo by Andrea Morales/Getty Images)

Median Loan Balance: $21,031
Average # of Loans: 3.8
% Who Owe More Than $50,000: 25.9%
% Who More Than $100,000: 7.6%

5. Akron, Ohio

Median Loan Balance: $21,037
Average # of Loans: 3.5
% Who Owe More Than $50,000: 23.0%
% Who More Than $100,000: 6.5%

4. Raleigh, North Carolina

Median Loan Balance: $21,357
Average # of Loans: 3.7
% Who Owe More Than $50,000: 22.9%
% Who More Than $100,000: 8.7%

3. Richmond, Virginia

Median Loan Balance: $21,915
Average # of Loans: 3.8
% Who Owe More Than $50,000: 23.9%
% Who More Than $100,000: 7.7%

2. Atlanta, Georgia

(Photo by Todd Kirkland/Icon Sportswire via Getty Images)

Median Loan Balance: $22,232
Average # of Loans: 3.8
% Who Owe More Than $50,000: 26.0%
% Who More Than $100,000: 9.1%

1. Washington, D.C.

Photo By Bill Clark/CQ Roll Call)

Median Loan Balance: $22,803
Average # of Loans: 3.4
% Who Owe More Than $50,000: 25.8%
% Who More Than $100,000: 9.8%

How To Pay Off Student Loans Faster

When it comes to paying off your student loans, the good news is that the ball is in your court.

Here are 5 ways to pay off student loans faster:

1. Make an extra payment

Be sure to specify that you want to apply any extra payment above the minimum payment to principal only (not to next month’s monthly payment) to limit the amount of interest that accrues.

Without this instruction, your lender will hold the excess payment and apply it to next month’s payment – which means you would pay more interest.

2. Pay an extra $100 each month

That may sound challenging if you’re barely able to pay your minimum monthly payment, but if you instruct your lender to apply the extra $100 to reducing principal, you could save thousands of dollars in interest.

If you can’t afford $100, any amount – $10, $25, $50 or more – will help save you interest.

3. Make a lump-sum student loan payment

Let’s assume that you have $100,000 in student loans at a 7% interest rate and a 10-year repayment term.

If you make a one-time, lump sum payment of $2,000, you would save $1,703 on your student loans and pay off your student loans 4 months early.

4. Apply for public service loan forgiveness

While student loan forgiveness may not continue as a federal program (in its current form or at all), Public Service Loan Forgiveness and Teacher Student Loan Forgiveness are still available to qualifying individuals.

5. Refinance your student loans

Student loan refinance is often the single best strategy to lower your student loan rate.

You can choose either fixed or variable rates and loan terms ranging from 5 to 20 years. To maximize your chances of being approved to refinance student loans, you should apply simultaneously to multiple lenders.

India seeks Facebook's response over reports of data sharing without consent

NEW DELHI (Reuters) – India has asked social media company Facebook Inc to respond by June 20 to media reports of sharing users data without their explicit consent, a government statement said on Thursday.

FILE PHOTO: The Facebook logo and emoticons are seen on a coffee mug at the reception of its new office in Mumbai, India May 27, 2016. REUTERS/Shailesh Andrade/File Photo

“Recently there are media reports claiming that Facebook has agreements which are allowing phone and other device manufacturers access to its users’ personal information, including that of their friends, without taking their explicit consent. The Government of India is deeply concerned about reports of such lapses/violations,” the statement said.

“The Ministry of Electronics and Information Technology has sought an explanation from Facebook seeking a detailed factual report on the issue. Facebook has been asked to respond by June 20.”

Facebook faced criticism in the United States on Wednesday from Republican and Democratic lawmakers who demanded that the social media company be more forthcoming about data it has shared with four Chinese firms.

Reporting by Malini Menon; Editing by Alex Richardson

Does It Matter If China Beats the US to Build a 5G Network?

Technical standards for the next generation of wireless services aren’t even finalized, yet the US and China are already locked in a crucial race to be the first country to deploy a so-called 5G network.

Or at least that’s what both the US government and the wireless industry say. “The United States will not get a second chance to win the global 5G race,” Meredith Attwell Baker, president and CEO of the wireless industry group CTIA, warned in April, when the group released a report concluding that the US trails China and South Korea in preparing for 5G (fifth generation) networks. If that doesn’t change, the report warns, the US economy will suffer.

The report echoed a leaked National Security Council document that suggested the US government consider building a 5G network. If China dominates the telecommunications network industry, the document said, it “will win politically, economically, and militarily.”

Democrats are worried too. The Federal Communications Commission’s lone Democrat, Jessica Rosenworcel, penned an op-ed for TechCrunch earlier this year calling for a renewed 5G strategy to head off China.

The first specifications for the 5G standard were released last year, but the rest of the standard isn’t expected until later this month. Carriers don’t expect national availability in the US until 2020. The wireless industry promises that 5G will bring enormous boosts in speed and reliability to mobile devices, bridge the gap between wireline and wireless broadband speeds, and enable a new wave of technologies and applications that we can’t even imagine yet.

But why exactly is it so important for the US to build 5G networks before China? The benefits of 5G are obvious, but today the US doesn’t have the fastest home broadband speeds, nor the fastest or most widely available 4G networks, and often lags countries such as Finland, Japan, and South Korea in such metrics. Why would the US’s economic strength erode if it’s a bit late to the 5G party?

A widely cited 2016 report by consulting firm Accenture estimates that the construction and maintenance of 5G networks in the US could result in 3 million jobs and a $500 billion boost to GDP. But would all those jobs end up overseas if China is the first country with a nationwide 5G network?

Not necessarily says Sanjay Dhar, a managing director at Accenture who worked on the report. “Even if China wins the race to build various 5G technologies, it won’t be a zero-sum game,” he says.

Telecommunications industry analyst Jeff Kagan says the competition between the US and China keeps the US motivated to push 5G forward, but he doesn’t believe that it will make a big difference to the US economy in the long term if the US is second or third. “I don’t think it’s ever been more than a battle over the ego over which country is first,” he says.

For one thing, the two countries’ economies remain dependent on one another. Chinese telecommunications company ZTE nearly collapsed after the US barred American companies from selling components to it. Even if China “wins,” US companies will benefit by selling technology to China.

Roger Entner, a founder of Recon Analytics and coauthor of the CTIA report, concedes that it might not matter much if the US introduces 5G a few months later than China. Europe was quicker to roll out 2G, and Japan was the first with 3G, but that hardly deterred Apple and Google from dominating the smartphone market. But Entner argues that if China beats the US by a year or two, it could damage the US’s ability to compete in the global technology market.

3G, which began rolling out in the US in 2002, made possible the iPhone, which debuted in 2007, and the app market, which drove enormous investment in mobile computing, says mobile industry consultant Chetan Sharma. 4G, which made its commercial debut in the US in 2011, made smartphones and mobile apps even more appealing. Apps like Instagram, Uber, and Lyft were able to reach critical mass before competitors from other countries, giving the US an edge.

Ultimately, it’s the decisions of consumers and the private sector that determine the winners and losers in technology. The US “beat” Europe and Japan because Apple created a product that took smartphones mainstream, Google built a popular mobile operating system and gave it away for free, and Facebook built a platform that keeps people glued to their phones. The concern is that if China delivers widespread access to 5G first, its companies will get a head start on creating the next generation of high-tech products and services.

That’s less of a concern with smaller countries such as South Korea, Entner says, because Korean companies won’t have as large a market to test and refine ideas. But China’s 1.4 billion population provides the perfect place for a company to grow a business before exporting to other countries. Consider the WeChat instant messaging app, which offers mobile payments, online banking, car services, and more. Western companies have been trying to emulate its success and functionality for years. Huawei, now the world’s largest provider of telecommunications infrastructure equipment, initially grew by serving the domestic market.

Gaining a lead in 5G could have other benefits for Chinese tech as well. 5G enables not just increased speeds, but the increased capacity that could help support growth of the Internet of Things. All those connected cars and other gadgets will produce data. Lots of it. That could help put China ahead in cutting-edge developments, like self-driving cars and artificial intelligence. “The massive amounts of data that 5G will enable will also be critical for training AI algorithms,” says Paul Triolo, who focuses on technology for the political risk consulting firm Eurasia Group. “So being a leader in both developing equipment and applications will be a major economic advantage to the country or countries that seize the baton.”

Providing Wireless Spectrum

The odds of China beating the US by more than a year are real, Entner says, because the US hasn’t yet allocated enough wireless spectrum for the new networks. Thus far, most development of 5G technologies has focused on “millimeter wave spectrum,” a very high frequency range that enables extremely fast speeds, but only over a very short range. That would require carriers to deploy an enormous number of small cellular antennas to blanket the US with 5G.

Carriers are pushing the FCC to open more of what’s known as the midband of the spectrum for 5G, which would allow them to use large cell towers, much as they do now. That could make it faster to deploy 5G. The fear is that if enough of this midband spectrum isn’t made available to carriers, the 5G networks launched by the 2020 start date won’t actually cover the whole country. The FCC plans an auction to sell access to some of the midband spectrum to carriers in November, and last month it formally began the process to make another big chunk available.

But the longer this takes, the longer it will take US carriers to build real 5G networks. Entner says that in the US, it has historically taken years to launch the first networks after a new portion of spectrum has been identified for a particular use.

By contrast, the Chinese government has opened up more midband spectrum for use with 5G. That’s a big part of why the CTIA report suggests that China, along with South Korea, are “ahead” of the US.

National Security Concerns

Concerns about China’s lead in 5G spill into national security. Huawei’s products are now used by carriers around the world. But the US government has long worried that Huawei could help the Chinese government spy on US citizens, businesses, or political leaders. Huawei is effectively blocked from the US market. But if telecommunications equipment companies in the US and allied countries exit the market, US carriers might be left without any option.

Security experts say the government is right to be concerned. Although there would be serious political fallout if Huawei or another Chinese company were caught spying, equipment makers are in a position to deliberately build vulnerabilities into their products and hand the details of those problems to the Chinese government, says Ryan Kalember, senior vice president of cybersecurity strategy of the security company Proofpoint. Alternately, the companies could hand over the details of newly discovered security flaws to the Chinese government before fixing them.

US buyers will almost certainly continue to shun Huawei products in favor of equipment from US companies such as Cisco and Juniper, or Europe’s Ericsson and Nokia. But that won’t do much to challenge Huawei’s role globally.

Much the same can be said of the whole race to 5G. Even if the US wins the 5G race, it won’t stop China.


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