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    Robinhood shares jump 25% after crypto CEO Sam Bankman-Fried acquires stake

    Vlad Tenev, CEO and co-founder Robinhood Markets, Inc., is displayed on a screen during his company’s IPO at the Nasdaq Market site in Times Square in New York City, U.S., July 29, 2021.
    Brendan McDermid | Reuters

    Robinhood shares jumped 24.9% on Friday, a day after the CEO of a major crypto exchange took a stake in the retail investing app.
    An entity called Emergent Fidelity Technologies took a 7.6% stake in Robinhood worth $648 million earlier this month, according to a document filed with the Securities and Exchange Commission. The document also showed Sam Bankman-Fried, who leads the Bahamas-based crypto company FTX, is the sole director and majority owner of Emergent. The stake makes Emergent the third-largest Robinhood shareholder, FactSet data shows.

    Shares of Robinhood closed at $8.56 on Thursday, the day the document was filed. That was about 77% below the company’s July IPO price.
    Bankman-Fried acquired the shares because they “represent an attractive investment,” according to the filing, which also says he “intends to hold the Shares as an investment” and doesn’t have “any intention of taking any action toward changing or influencing the control of the Issuer.”
    He may “from time to time engage in discussions” with management, however.
    “Of course we think it is an attractive investment too,” Robinhood’s communications team said in a tweet Thursday evening in response to the news of the investment.
    Bankman-Fried can also review “options for enhancing stockholder value through, among other things, various strategic alternatives or operational or management initiatives,” according to the document. It also said he could acquire additional shares.

    FTX is one of the biggest crypto exchanges in the world. It offers derivatives products for more sophisticated traders, as well as spot trading, and has become a rival to big names such as Coinbase and Binance. It offers services in the U.S. through a separate entity, FTX U.S.
    Though Robinhood got its start in stock trading, it saw huge success when it rolled out its crypto trading platform in 2018. Crypto trading has since become important for the company’s bottom line. In the fall, Robinhood revealed its testing a crypto wallet and said the waitlist for it had topped 1 million customers.

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    Here are some strategies to pay off credit card debt before interest rates rise again

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    Interest rates are set to rise again, making it a good time to pay off high-cost credit card debt as soon as possible.
    Annual percentage rates on credit cards are currently just over 16%. Because the Federal Reserve is in a rate hiking cycle, with half-point increases on the table for every remaining meeting this year, APRs are likely to go up.

    They could even overtake the current record high of 17.87% set in April 2019.
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    That could pose a problem for Americans with outstanding bills. Credit card balances reached $841 billion in the first three months of the year, according to a report from the Federal Reserve Bank of New York. In the same timeframe, 229 million people opened new credit card accounts, an increase from the previous quarter.
    “The biggest key to get out of credit card debt is to not be paying a high interest rate on that debt,” said personal finance expert Suze Orman.
    Look for lower interest rates
    One of the first steps Orman advises for those looking to chip away at credit card debt is to see if you can lower your interest rates.

    Doing this will help you pay off your debt faster and make sure more of your money is going toward knocking out what you owe, instead of accumulating interest.
    There are a few ways to do this, such as a balance transfer to another credit card with 0% interest rates for a certain period, taking out a personal loan with a lower interest rate to pay off your credit balance or working with credit counselor to consolidate your debt with a lower rate.

    These options will depend on your personal situation and your credit score, Orman said. For those with lower scores, she recommends reaching out to the National Foundation for Credit Counseling for assistance in lowering your interest rate and getting on a payment plan.
    Pick a method
    If you are going to pay off your debt while keeping your cards open, there are generally two methods that people use to wipe away a balance, according to John Scherer, a certified financial planner and founder of Trinity Financial Planning in Madison, Wisconsin.
    One is to round up all your outstanding debts by balance and start by paying off the smallest one.
    “Then you get momentum,” said Scherer. “You see some of those things fall off the books, and it feels really good.”

    The second model, which Scherer says is personally what he recommends to clients, is to look at all your outstanding debt and pay off the one with the highest interest rate first. Over time, this means you’ll pay less money to knock out your debt because you’re tackling the highest interest rates right away.
    Orman also recommends this approach. She says to round up your credit card debt and add up all the minimum payments due each month. From there, add 20% or more to your total payment and apply it to the debt with the highest interest rate. Once that’s paid off, roll that extra payment to the next card, and then the next until everything is wiped away.  
    Build up personal savings

    “What you might want to do is take all your credit cards, put them into a plastic bag and put them in the freezer,” said personal finance expert Suze Orman.
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    How to calculate your own personal inflation rate amid rising prices

    Inflation dropped slightly in April, yet it’s still close to a 40-year high, with consumer prices rising at an annual rate of 8.3%. Rising costs for housing, food, airfares and new cars were the biggest contributors to that key gauge of inflation.
    The typical American family is spending about $450 more per month for goods and services than a year ago, according to Moody’s Analytics Chief Economist Mark Zandi. Yet you may not be “typical.” We don’t all spend the same amount on the same things.

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    To figure out how much inflation is actually impacting your wallet depends on how much you are spending and where you’re spending it. You need to calculate your own personal inflation rate. Here’s how to do it:

    Look at what you’ve spent on food, housing, gas, entertainment, apparel, education and other items. (To find out exactly what to include, go here to the U.S. Bureau of Labor Statistics’ list of expenditures that make up the consumer price index.)
    Gather your credit card bills and bank statements to find the exact amounts that you spent in each category.
    Add up your monthly spending for last month and a year ago.
    Then subtract your total spending for April 2021 from April 2022.
    Divide that difference by your monthly expenses for April 2021.
    The result of that equation is your personal inflation rate.

    Depending on your income, the impact of your personal inflation rate may feel better — or worse — on your wallet than the latest CPI number.
    SIGN UP: Money 101 is an eight-week learning course to financial freedom, delivered weekly to your inbox. For the Spanish version Dinero 101, click here.CHECK OUT: Meet a 26-year-old who earns $30,000 a month in ‘mostly passive’ income and built a $1.3 million net worth with Acorns+CNBC
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    Inflation is costing U.S. households an extra $341 a month. Here's what's more expensive and how you can save some money

    Images By Tang Ming Tung | Stone | Getty Images

    Editor’s note: This article has been updated with corrected information provided by Moody’s about additional spending this year by U.S. households to purchase the same goods and services they did last year.
    Americans continue to feel the sting of inflation.

    Consumer prices rose 8.3% in April from a year ago. As a result, U.S. households are spending an additional $341 a month to purchase the same goods and services compared to a year ago due to inflation above typical inflation of 2%, according to an analysis by Moody’s Analytics senior director Ryan Sweet.
    “This is a little less than last month but still a noticeable burden on households,” Sweet said.
    In March, the Consumer Price Index, which measures the price of goods and services, jumped 8.5% year-over-year.
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    While the pace of price increases moderated, it wasn’t as much as expected, Bankrate chief financial analyst Greg McBride said in a note.

    “It can be tempting to say we’ve seen the peak, but we’ve also been head-faked before, as was the case last August,” he wrote.
    To be sure, consumers are still feeling the pain, particularly when it comes to the cost of food, shelter, airfares and new automobiles. Energy prices, on the other hand, declined 2.7% from March — although they are still up 30.3% from April 2021.
    New car prices rose 1.7% from March, while used cars and trucks saw a 0.4% decrease. Meanwhile, airline fares jumped 18.6% from a month ago and shelter costs rose 0.5%.

    Food prices at the grocery store rose 0.9% from March and 9.4% from the year prior. Eggs, chicken and milk were among those hit hardest. The cost of eggs rose 10.3% from last month, while milk was up 3.1% and chicken prices increased 3.4%. Butter increased 3.7% month over month, compared with a 7.1% hike in margarine prices.
    However, some prices went down month over month, as with vegetables, which decreased slightly by 0.3%; beef and veal, down 0.9%; and ham, which saw a 1.8% decline.
    “It’s important to pay attention to the cost of goods, and especially on the items you need to pay consistently every month,” said Winnie Sun, co-founder and managing director of Irvine, California-based Sun Group Wealth Partners.

    Adjust your budget

    To combat higher prices and find ways to save money, first review your spending.
    “With the knowledge of how much ‘more’ you’re spending comes the power of making informed decisions,” said Sun, a member of the CNBC Financial Advisor Council.
    That could include whether to buy something in bulk, shopping for sales or swapping a food item for another that is less costly, she added.
    Meal planning can also help you save on groceries.

    Money expert Sahirenys Pierce, founder of personal finance blog Poised Finance & Lifestyle, creates a meal plan for the week that incorporates items that are on sale. She then prepares three of those meals on Sunday. Having a plan in place for the remaining days of the week helps her avoid picking up takeout or fast food.
    “This strategy has helped my family save hundreds of dollars during our debt-free journey, the pandemic and now during times of high inflation,” Pierce said.
    Beyond the grocery store, look at other bills, such as subscription services you may be able to live without. Consider trading off an expensive vacation for a daytrip or staycation.
    You can also set it up as a monthly money challenge, Sun suggests.
    “Stretch your supermarket budget, shop your pantry, drive less for one month, find creative outlets for a month that will bring joy without adding to your spend,” she said.

    Bring money in

    Daniel Grill | Tetra Images | Getty Images

    While saving money will help, so can finding ways to bring more money into your household.
    Consider taking on temporary side gigs, such as freelancing or tutoring, or even asking your manager for more assignments for increased pay, Sun advised.
    Selling items you can live without, such as toys, appliances and clothing, is another way to bring in some money. You might also rent out something you don’t use, such as an extra room, garage or even your pool (check your insurance first).
    “Stretching your earning muscles can really benefit you during challenging financial times and set you up for even greater success when things get better,” Sun said.
    SIGN UP: Money 101 is an 8-week learning course to financial freedom, delivered weekly to your inbox. For the Spanish version Dinero 101, click here.
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    Negotiating a job offer works: 85% of Americans who counteroffered were successful. Here's how to do it

    Steve Debenport | E+ | Getty Images

    When it comes to negotiating a job offer, if you don’t ask — you won’t receive.
    It turns out many don’t ask, according to a survey from Fidelity Investments.

    Some 58% of Americans accepted the initial offer at their current position without negotiating, the survey found.
    Yet negotiating works. Fully 85% of Americans — and 87% of young professionals ages 25 to 35 — who countered on salary, other compensation or benefits, or both pay and other compensation and benefits got at least some of what they asked for, according to Fidelity. The survey, conducted March 8-14 by Engine Insights, polled 1,524 U.S. adults ages 25 to 70 who currently work either full- or part-time.
    “People feel like they can’t or shouldn’t negotiate, but companies expect you to negotiate,” said Caroline Ceniza-Levine, executive coach at Dream Career Club.
    “They respect good negotiators,” she added. “They respect you if you can advocate for yourself.
    “They want someone with that confidence to be on their side of the table.”

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    Confidence is key. Therefore, do your homework. Research compensation for your job, field and location. Also, ask other people about their salaries or what they know about pay for the job.
    “If you understand what you can ask for, if you are doing a good job showing your value, it would help increase the confidence you have going into any salary negotiations,” said Kelly Lannan, senior vice president of emerging customers at Fidelity Investments.
    Before you counteroffer, identify what you want. It may be a higher paycheck, or it might be about a bonus, benefits, title or scope of the job.
    When focusing on salary, remember that even if the salary is in line with market data, you can still sell your specific skill set or experience as a reason for a higher rate, Ceniza-Levine said.

    People feel like they can’t or shouldn’t negotiate, but companies expect you to negotiate.

    Caroline Ceniza-Levine
    Executive coach at Dream Career Club.

    If higher pay isn’t in the cards, you can also negotiate for those non-salary items.
    “Really look at the entirety of the offer and don’t just be so quick to say whoever gets the most money wins,” she said.
    Also, think about what is going on at the company. For example, do they need you to start right away? If so, that may be worth additional pay or a bonus to start earlier, she said.
    If possible, negotiate with the person who will make the ultimate decision. If you can’t, try to do your best to develop a rapport with the individual you are speaking with, like the recruiter, so they can be a good steward of your case, Ceniza-Levine advised.

    How you approach the employer with a counteroffer also matters. Be clear that you are excited to work for the company and highlight the skills and value you bring to the table, Lannan said.
    “The way our engage in the conversation is just as important as the points you are making,” she said.
    At the end of the day, it never hurts to ask. If the answer is “no,” it doesn’t mean the job offer will be rescinded. Plus, you can always revisit the topic down the road.
    “‘No’ just means ‘not now,'” Ceniza-Levine said. “It’s not forever.”
    SIGN UP: Money 101 is an 8-week learning course to financial freedom, delivered weekly to your inbox. For the Spanish version Dinero 101, click here.
    CHECK OUT: Meet a 34-year-old who has sold over 11,000 items on Etsy and makes nearly $3,500/month in passive income with Acorns+CNBC
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    MicroStrategy's bitcoin bet looks shaky as crypto market encounters turbulence

    MicroStrategy is now underwater on its bitcoin holdings due to the crypto market tumble.
    The enterprise software maker has bet big on bitcoin over the past two years, with a cost basis of $30,700 per token, as of March 31.
    Bitcoin traded just north of $28,000 per token Thursday morning.

    Rafael Henrique | LightRocket | Getty Images

    MicroStrategy, the enterprise software maker that’s bet big on bitcoin over the past two years, is now underwater on its holdings of the world’s largest cryptocurrency due to the market tumble.
    Bitcoin traded around $28,500 apiece on Thursday afternoon, recovering from earlier losses that brought the digital token below $27,000. Just last week, it touched a recent high around $40,000. Its all-time high, just below $69,000, was reached in November.

    MicroStrategy’s cost basis was roughly $30,700 per bitcoin, as of March 31, according to its first-quarter earnings report. As of the same date, the company owned roughly 129,218 bitcoins, spending a total of $3.967 billion to acquire them.
    MicroStrategy’s stock, while volatile, enjoyed success alongside bitcoin in late 2020 and into last year. Now, it reflects the tumult facing bitcoin and the crypto market more generally, which has been rocked in recent days as investors flee risky assets, and as an experimental stablecoin project is under duress.

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    At their lows on Thursday, MicroStrategy shares were down more than 20% to almost $134, after plummeting 25.4% Wednesday. The stock then rallied all the way back and jumped as much as 22% intraday on Thursday. It ended higher by 1.8% at $171.18 per share, putting its losses over the past five days at 46.3%.
    Based on Thursday’s close, MicroStrategy shares are down about 87% from their bitcoin-era highs of $1,315 on Feb. 9, 2021. That came just one day after Tesla announced it bought $1.5 billion worth of bitcoin, a move that may have been inspired by MicroStrategy’s buying and the evangelizing of its chairman and CEO, Michael Saylor.
    Since MicroStrategy disclosed its maiden bitcoin purchase, in August 2020, Saylor has become one of the most well-known bitcoin boosters in Corporate America, amassing a large following on Twitter and speaking at various crypto conferences.

    He’s made a number of bold predictions and claims about bitcoin, suggesting to CNBC last year it could have a total market cap of $100 trillion eventually and become “a stabilizing influence in the entire financial system of the 21st century.” As of Thursday, bitcoin’s market value was below $600 billion.
    MicroStrategy, which generated $510.8 million in revenue in 2021, has made increasingly risky bets on bitcoin. Its initial tranche nearly two years ago was bought using cash on hand, spending about $250 million, including fees and expenses, at a time when bitcoin traded below $12,000 per token.
    MicroStrategy then began to tap the debt market to fund additional purchases, issuing $650 million of convertible notes in December 2020 and $500 million of bonds in June 2021. Proceeds from both were used to buy still more bitcoin.

    Michael Saylor, chairman and chief executive officer of MicroStrategy, speaks during the Bitcoin 2022 conference in Miami, Florida, U.S., on Thursday, April 7, 2022.
    Eva Marie Uzcategui | Bloomberg | Getty Images

    Most recently, on March 29, a subsidiary of MicroStrategy closed a $205 million loan — collateralized by bitcoin — with the purpose of acquiring even more bitcoin. On April 5, Saylor announced MicroStrategy bought 4,167 bitcoins at an average price of $45,714 each.
    The March 29 loan, issued by Silvergate Bank, is now the subject of attention as bitcoin slides. On MicroStrategy’s earnings call last week, CFO Phong Le said if bitcoin fell below $21,000 per token, the company could face a margin call, based on the terms of the loan-to-value (LTV) ratio from Silvergate.
    “We took out the loan at 25% LTV. The margin call occurs at 50% LTV. So essentially, bitcoin needs to cut in half, or around $21,000, before we’d have a margin call,” Le explained on the May 3 earnings call. “That said, before it gets to 50%, we could contribute more bitcoin to the collateral package so it never gets there, so we don’t ever get into a situation of a margin call.”

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    Heavily shorted online used car seller Carvana surges nearly 25%, is halted several times

    Shares of online used car retailer Carvana surged amid a wild trading session in which several heavily-shorted stocks popped.
    The stock closed up about 25% and trading was halted at least four times.
    Nearly 29% of Carvana shares available for trading are sold short, according to FactSet.

    A Carvana used car “vending machine” on May 11, 2022 in Miami, Florida.
    Joe Raedle | Getty Images

    Shares of online used car retailer Carvana surged Thursday amid a wild trading session in which several heavily-shorted stocks popped.
    The stock closed up 24.7%. Trading was halted at least four times Thursday. Carvana’s share price had hit a new two-year low earlier in the session.

    Stocks with high short interest are likely to pop in market rallies, as some investors who have bet against these companies are likely to cover their short positions by buying back borrowed stock. This can lead to what is known as a short squeeze.
    Nearly 29% of Carvana shares available for trading are sold short, according to FactSet, among the highest ratios on U.S. markets.
    Earlier in Thursday’s session, the major stock averages attempted a comeback from a vicious sell-off led by technology stocks.
    The surge in Carvana comes as other names with big short bets against them popped during the session. GameStop, AMC and electric vehicle stocks traded sharply higher.
    Carvana has traded over 41 million shares today, compared with its 30-day average volume of about 9 million.

    The company, whose shares are down more than 83% this year, has faced very negative sentiment lately on Wall Street. Carvana received downgrades from the likes of Stifel, Morgan Stanley and Wells Fargo in May.
    “Deteriorating capital market conditions and worsening trends in the used vehicle industry have eroded our conviction in the path for Carvana to secure the necessary capital to realize sufficient scale and self-funding status,” Stifel’s Scott Devitt said in a research note Tuesday.
    Carvana in April reported disappointing quarterly results with a wider-than-expected loss per share.

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    House passes bill aimed at curbing the $2.9 billion seniors lose each year to financial scams

    Unsuspecting older Americans get duped by financial scams every year.
    Now, a bill in Congress aims to to increase regulators’ abilities to help end that.
    “No one from the IRS is going to call you and ask you to send money,” one expert says. “Only scammers do that.”

    Piksel | Istock | Getty Images

    Older Americans lose an estimated $2.9 billion per year to financial scams.
    The House of Representatives is moving forward with an initiative aimed at helping stem those losses.

    On Wednesday, the chamber passed the Empowering States to Protect Seniors from Bad Actors Act by a vote of 371-48.
    The bipartisan measure will enable the Securities and Exchange Commission to help state enforcement agencies and task forces protect and educate seniors through the creation of a new Senior Investor Protection Grant Program.
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    The bill would authorize $10 million each year so regulators can hire additional investigative staff and improve technology, training and equipment. In addition, money would also be devoted to educating seniors about financial scams.
    Bipartisan companion legislation was proposed in the Senate in January by Sens. Chris Van Hollen, D-Md.; Tim Scott, R-S.C.; Raphael Warnock, D-Ga.; and Cynthia Lummis, R-Wyo.

    Rep. Josh Gottheimer, D-N.J., who sponsored the House bill, said on floor on Wednesday that he had had personal experience with these scams when his own mother was targeted by a purported IRS agent.
    “Luckily, we figured out and stopped that ‘IRS agent’ in his tracks,” Gottheimer said of the fraudulent actor. “But how many others paid?”
    While records show about 7 million Americans were the victims of financial exploitation last year, other estimates show just 1 in 24 cases of elder exploitation are typically reported, according to Gottheimer.
    The reason more seniors do not come forward is largely due to fear, Lorraine Joewono, executive director of the Bergen County Division of Senior Services, said during an event in New Jersey hosted by Gottheimer earlier this week.
    “Their biggest fear is that if they report it, they feel their family will think they can no longer be independent and live alone,” Joewono said.
    Many seniors get scammed out of their life savings or retirement funds, she said.

    “We always tell seniors please don’t give your information to anybody,” Joewono said. “No one from the IRS is going to call you and ask you to send money.
    “Only scammers do that.”
    Scammers also often impersonate the Social Security Administration. That agency has worked to raise public awareness of those schemes.
    Gottheimer also sponsored the Senior Security Act, which was passed by the House last year. The bill would create a task force within the SEC to submit reports to Congress every two years on financial schemes targeting seniors, like robocalls and voice spoofing.

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