Raphael Stevens

More stories

  • 138 Shares189 Views

    in Business

    ‘Wicked’ soars with $114 million domestic opening, ‘Gladiator’ snares $55.5 million

    Universal’s “Wicked” is expected to snare $114 million during its domestic opening, the highest debut of a Broadway adaptation in cinematic history, according to Sunday estimates.
    Paramount’s “Gladiator II” is expected to open with $55.5 million in ticket sales domestically, according to Sunday estimates.
    Although “Glicked” did not quite reach the same level as last year’s “Barbenheimer,” this weekend’s tally will help bolster the overall annual box office, which lags around 11% behind 2023 levels during the same period.

    Cynthia Erivo and Ariana Grande star as Elphaba and Glinda in Universal’s “Wicked.”

    The box office was a popular destination this weekend as Universal’s “Wicked” and Paramount’s “Gladiator II” arrived in cinemas.
    “Wicked” is expected to snare $114 million during its domestic opening, the highest debut of a Broadway adaptation in cinematic history, according to Sunday estimates. Globally the film is set to take in $164.2 million.

    Tracking projections for “Wicked” started around $80 million in late October, but rose to a range of $120 million to $140 million. Hollywood has struggled to market and make a profit on movie musicals in recent years. However, the industry has also seen fan-favorite IP-driven titles outperform. With “Wicked” being based on one of Broadway’s most popular musicals, box-office analysts found it tricky to predict where it would land.
    However, at its $114 million tally, the film will earn the third-highest domestic opening of 2024 behind Disney and Marvel’s “Deadpool & Wolverine,” which took in $211 million in July, and Disney and Pixar’s “Inside Out 2,” which grabbed $151 million in June.
    Meanwhile, “Gladiator II” is expected to open with $55.5 million in ticket sales domestically, according to Sunday estimates. This is lower than box office expectations, which called for a haul between $60 million and $80 million. Globally, the film is set to reach $221 million by the end of the weekend, after opening in international locations earlier this month.
    “As arguably the most talked about weekend of 2024, this $200 million plus pre-Thanksgiving frame has delivered big with the one-two punch of ‘Wicked’ and ‘Gladiator II’ serving up a perfectly orchestrated, irresistible moviegoing combination with appeal to basically every demographic on the planet,” said Paul Dergarabedian, senior media analyst at Comscore.
    Although “Glicked” did not quite reach the same level as last year’s “Barbenheimer,” the combo of Universal’s “Oppenheimer” and Warner Bros.’ “Barbie,” this weekend’s tally will help bolster the overall annual box office, which lags around 11% behind 2023 levels during the same period. Both films are expected to continue to drive ticket sales at theaters through Thanksgiving and Christmas.

    “Once again, it’s clear that when healthy competition meets premium experiences, the marketplace thrives, and consumers win,” said Michael O’Leary, president and CEO of the National Association of Theatre Owners. ” The success of movies like ‘Wicked’ and ‘Gladiator II,’ not to mention hearty presales already for ‘Moana 2,’ demonstrates just how much movie fans of all ages enjoy going to the movies.”
    Disney’s “Moana 2” is expected to haul in $100 million over the five-day Thanksgiving period, according to box office analysts.
    Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor of “Wicked” and “Oppenheimer.” More

  • 125 Shares149 Views

    in Finance

    How Trump, Starmer and Macron can avoid a debt crunch

    America’s gross national debt is $36trn, or $107,000 per person. It is rising fast and will probably soon be rising even faster. If Donald Trump’s election campaign was anything to go by, his return to the White House heralds a flurry of tax cuts on everything from corporate profits to tips. In the fiscal year that ended in September, Uncle Sam spent $1.8trn more than he collected in taxes (6.4% of GDP, or over double the annual earnings of America’s seven biggest firms). By one estimate, Mr Trump’s agenda could raise borrowing by $4.1trn in the coming decade. More

  • 113 Shares129 Views

    in Business

    Can Starbucks fix long lines at its airport cafes?

    New Starbucks CEO Brian Niccol is tasked with reversing the coffee giant’s sales slump.
    He said airports, where consumers often face long lines, are one area in particular that could be improved.
    Airport concessions will be put to the test in what airlines expect to be the busiest Thanksgiving travel period ever.

    Customers wait in a long line at a Starbucks cafe in a terminal at Miami International Airport, in Miami, Dec. 12, 2022.
    Jeff Greenberg | Universal Images Group | Getty Images

    Air travelers face a host of headaches on their journeys: slow security lines, long waits for plush lounges, the threat of delays or cancellations — and the airport Starbucks.
    Many travelers, flight crews and even airport employees have at some point encountered long wait times for their Starbucks cappuccinos, cold brews and egg bites.

    “They need to have a better system,” said Coresa Barrino, a Starbucks patron at New York’s LaGuardia Airport Terminal B earlier this month who said she had been waiting 10 minutes and counting for her coffee. The nursing assistant, who was taking a flight back to Charlotte, North Carolina, said the wait when she buys her coffee at a Starbucks in Charlotte is about two minutes.
    The long waits have caught the attention of the coffee chain’s new CEO, Brian Niccol, who joined Starbucks from Chipotle in September, pledging to win back customers and reverse the company’s sales slump.
    Niccol told investors he thinks that licensed locations, such as those inside Target stores or airports, are interested in following the company’s strategy of “getting back to Starbucks.”
    “When I think about the airports and such, there’s such a huge opportunity for us to simplify some of the execution there so that we get people the great throughput that they want so they can get on their way,” Niccol said on the company’s quarterly conference call Oct. 30.
    Starbucks’ airport location staff — and company technology — will be put to the test this week during some of the busiest travel days of the year. The Transportation Security Administration forecast a record number of travelers during Thanksgiving week and said Sunday, Dec. 1, could be the busiest day of the year, with more than 3 million people screened at U.S. airports.

    The surge in air travel, especially during peak times such as Thanksgiving, has led to congestion in airport security lines, in lounges and at gates — problems that airlines and the federal government are trying to fix. For the aviation industry, bottlenecks at airport Starbucks are just another sign of soaring demand and overcrowded airports.
    A record 1.05 billion people boarded airplanes going either to, from or between U.S. airports in 2023, narrowly topping the total in 2019, before the pandemic, according to the U.S. Department of Transportation.

    Struggles and fresh approaches

    Starbucks has recently struggled. Its sales fell for the third straight quarter in the period ended Sept. 30, as consumers pushed back against higher prices and ignored initiatives such as discounts and energy drinks aimed at bringing customers back. Same-store sales in the U.S. declined by 6% from a year earlier.
    In late October, Niccol unveiled plans aimed at improving customers’ experiences and reviving the company’s sales, from bringing back condiment bars, to eliminating surcharges for dairy alternatives and cutting down the menu.
    Cutting wait time is a key goal: He wants to trim service times down to four minutes, which would shrink long lines and improve the customer experience.
    And while Starbucks started rolling out mobile order and pay to its airport locations in 2022, the change can sometimes add to the confusion and chaos at the cafe counter instead of resolving it. Plus, some travelers might not be regular Starbucks customers who already have the app downloaded.
    Improving the coffee chain’s airport outposts could boost both sales and the brand’s reputation during a time when it needs it most. Even the customers Starbucks has lost might visit an airport location while they’re traveling.
    With travelers returning in droves after the pandemic, it gives Starbucks and other restaurant chains a chance to boost sales.

    Concessions contribute about 4% of U.S. airport revenue annually, according to the latest available Federal Aviation Administration data, but they’re an important feature to many passengers, who have limited time — and, often, energy — to fuel up before a flight.
    At Dallas Fort Worth International Airport, revenue from food and beverage outlets is growing faster than passenger numbers, said Jennifer Simkins, the airport’s assistant vice president of concessions. The airport has become the world’s third-busiest for passengers, up from 10th place in 2019, according to Airports Council International.
    Airlines are also packing more seats on their aircraft and in some cases are flying larger jets.
    More passengers per plane means restaurants can become crowded during peak times with more customers waiting to be served and space limited, said Ursula Cassinerio, an assistant vice president at Moody’s Ratings who covers airports.
    She noted that many airports have been undergoing major renovations, if not building new terminals. That means “more opportunities for revenue if you have more square footage for retail and restaurants,” she said.
    The 25 busiest airports in the U.S. have an average of 80 food and beverage brands as options for travelers, according to data from market research firm Technomic.

    Licensing model

    A challenge for Starbucks is that licensees — not Starbucks itself – operate its airport locations.
    Starbucks opened its first airport location with licensee HMSHost in 1991 at Seattle-Tacoma International Airport, which serves Starbucks’ hometown.
    For nearly three decades, HMSHost operated the chain’s airport locations through an exclusive deal with Starbucks and gradually grew its airport footprint to roughly 400 outposts.
    But in 2020, HMSHost ended the deal, giving the operator flexibility to offer more coffee options to airports.
    While HMSHost still operates the overwhelming majority of Starbucks’ airport cafes, more operators, such as Paradies Lagardere and OTG, have since taken a swing at it.
    HMSHost, Paradies Lagardere and OTG did not respond to requests for comment for this story.
    “Airport locations are tricky because they can make good money, but operationally, at times, they can be very challenging,” said Mark Kalinowski, restaurant analyst and CEO of Kalinowski Equity Research.

    Customers wait in line at a Starbucks cafe in a terminal at LaGuardia Airport in New York City, Nov. 11, 2024.
    Leslie Josephs/CNBC

    Licensing its stores saves Starbucks the hassles of operating inside an airport, such as staffing problems, high rents and security checkpoints. And though the coffee chain is used to handling a surge of undercaffeinated customers in the mornings, the swell in demand at an airport can be even more erratic.
    “A plane lands, and all of a sudden there’s a hundred people when there were zero people there before,” said Kevin Schimpf, director of industry research for Technomic.
    The trade-off is that Starbucks makes less money from those licensed restaurants.
    The company has more than 16,300 locations in the U.S. as of Sept. 24. But it only runs about 60% of those cafes itself; licensees operate the rest. That number includes its cafes in 47 of the 50 busiest airports in the U.S., according to Starbucks. The company did not disclose its current airport store count to CNBC.
    In fiscal 2024, licensed locations accounted for 12% of Starbucks’ revenue, or $4.51 billion. From those stores, Starbucks collects only licensing fees, a percentage of monthly sales through royalties, and payments for supplying its coffee, tea and food to licensees, according to company filings.
    For every dollar spent in a licensed store, Starbucks generates about 7 cents of earnings before interest, taxes, depreciation and amortization, according to estimates from Bank of America analyst Sara Senatore. Company-owned stores make about 23 cents per dollar spent, Senatore wrote in a research note in September.

    If its business partners and third-party providers slack off, Starbucks’ brand could be damaged, the company noted in the risk factors section of its latest annual filing.
    “The vast majority of customers, they don’t know whether that is a company-owned Starbucks or a licensed Starbucks,” Kalinowski said. “They just want their Starbucks. They want it made properly. They want it quickly. And they’re in a situation of heightened stress because they’re trying to get to their gate.”
    Airports themselves have been adopting more technology in their restaurants to help move lines along.
    Labor challenges have led to more kiosks and tablets inside airport restaurants, for example.
    “It’s harder and harder to staff a lot of these restaurants, so any front-of-house savings that you can make by having consumers order on kiosks or tablets or whatever, that really, really helps,” Schimpf said.
    Laurie Noyes, vice president of concessions and commercial parking at Tampa International Airport, said that “sometimes the airports are a little bit behind the street.” But she said the airport has made strides in offering more digital options and now, travelers can order food ahead of time via Uber Eats, and pick it up at airport restaurants.
    Dallas Fort Worth offers DFWOrderNow, a website and platform available at digital kiosks so travelers can order food ahead. Simkins said the airport’s platform will reroute Starbucks customers to Starbucks’ own platform. Starbucks offers more than 170,000 possible drink orders, according to the chain’s website. “We just found the value in keeping the familiarity for their customers,” Simkins said.
    Simkins said the airport is developing robotic technology for delivery to speed up service. It’s also experimenting with offering meal and retail bundles from airport restaurants and shops, she said, so passengers “no longer have to plan their route for multiple stops” in an airport.
    A local coffee company, Fort Worth, Texas-based Ampersand, plans to open a robotic barista at DFW’s Terminal C, Simkins said. It will be available 24/7, to accommodate flight crews arriving at off-hours. 
    Simkins said popular chains still draw a crowd.
    “There are some brands that people will line up for,” she said.
    For Barrino, who was waiting for her coffee at LaGuardia, Starbucks is one of those companies.
    “I just really love the brand,” she said. More

  • 188 Shares149 Views

    in Finance

    Bitcoin vs. gold: State Street worries the crypto rally’s allure is distracting precious metal investors

    The bitcoin rally is generating a false sense of security among investors, according to the strategist behind the so-called granddaddy of gold exchange-traded funds.
    State Street Global Advisors’ George Milling-Stanley warns cryptocurrency plays don’t offer the stability of gold.

    “Bitcoin, pure and simple, it’s a return play, and I think that people have been jumping onto the return plays,” the firm’s chief gold strategist said on CNBC’s “ETF Edge” this week.
    Milling-Stanley’s comments came as his firm’s SPDR Gold Shares ETF (GLD) celebrated its 20-year anniversary this week. It is the world’s largest physically backed gold ETF, and it’s up more than 30% in 2024.
    “Gold was $450 an ounce [20 years ago],” said Milling-Stanley. “It’s now five times what that price was then. If you look at a five-times price, then gold should be somewhere over $100,000 in twenty years’ time.”
    Gold just had its best weekly performance since March 2023. Gold futures settled at $2,712.20 on Friday, the highest settle since Nov. 5. Gold prices are now just 3% below the record high hit on Oct. 30.
    Bitcoin, which has surged since the Nov. 5 election, is having a banner year, too. It hit an all-time high on Friday.

    Milling-Stanley thinks investors who treasure gold’s safety qualities should reconsider piling into bitcoin. He suggests the crypto world is trying to manipulate them.
    “This is why they [bitcoin promoters] called it mining. There’s no mining involved. This is a computer operation, pure and simple,” he said. “But they called it mining because they wanted to seem like gold — maybe take some of the aura away from the gold.”
    Yet, he acknowledges it is unclear how high the yellow metal can actually go.
    “I have no idea what’s going to happen over the next 20 years except it’s going to be a fun ride,” Milling-Stanley said. “I think that gold is going to do well.”

    Disclaimer More

  • 113 Shares189 Views

    in Finance

    What Scott Bessent’s appointment means for the Trump administration

    At last, white smoke has emerged from Mar-a-Lago. Two and a half weeks after the election and more than a week since it first seemed as if an announcement about a choice of treasury secretary was coming, Donald Trump has finally made his decision. On November 22nd the campaign said that Scott Bessent, a hedge-fund titan, would command 1500 Pennsylvania Avenue. Both the appointment of Mr Bessent, and the manner in which he was picked, offer clues about economic policy during a second Trump term. More

  • 113 Shares149 Views

    in Finance

    Top 10 S&P 500 stock winners since Election Day

    Many stocks have seen double-digit returns since Election Day.
    That’s largely due to a combination of likely policy stances from the incoming Trump administration and positive quarterly earnings reports, experts said.
    President-elect Donald Trump will likely back deregulation and adopt a less stringent stance on mergers and acquisitions, experts said.
    Tesla stock also got an “Elon Musk premium,” one analyst said.

    Stock traders on the floor of the New York Stock Exchange.
    Michael M. Santiago | Getty Images News | Getty Images

    Many large U.S. companies have seen their stocks swell since the presidential election.
    The top 10 performing stocks in the S&P 500 index saw returns of 18% or more since Election Day, according to data provided by S&P Global Market Intelligence, which analyzed returns based on closing prices from Nov. 5 to Nov. 20.

    Two companies — Axon Enterprise (AXON), which provides law-enforcement technology, and Tesla (TSLA), the electric-vehicle maker led by Elon Musk, an advisor to President-elect Donald Trump — saw their stocks gain more than 35%, according to S&P Global Market Intelligence.
    By contrast, the S&P 500 gained about 2% over the same period.

    ‘Usually a bad idea’ to buy on short-term gain

    Investors should be cautious about buying individual stocks based on short-term boosts, said Jeremy Goldberg, a certified financial planner, portfolio manager and research analyst at Professional Advisory Services, Inc., which ranked No. 37 on CNBC’s annual Financial Advisor 100 list.
    “It’s usually a bad idea,” Goldberg said. “Momentum is a powerful force in the market, but relying solely on short-term price moves as an investment strategy is risky.”
    Investors should understand what’s driving the movement and whether the factors pushing up a stock price are sustainable, Goldberg said.

    Why did these stocks outperform?

    Lofty stock returns were partly driven by Trump administration policy stances expected to benefit certain companies and industries, investment experts said.
    Deregulation and a softer view toward mergers and acquisitions are two “key” themes driving bullish sentiment after Trump’s win, said Jacob Manoukian, head of U.S. investment strategy at J.P. Morgan Private Bank.

    Relying solely on short-term price moves as an investment strategy is risky.

    Jeremy Goldberg
    portfolio manager and research analyst at Professional Advisory Services, Inc.

    Additionally, U.S. regulators will likely be much less stringent about allowing potential mergers during Trump’s second term, experts said.
    Companies in the streaming ecosystem — like Warner Bros. Discovery (WBD), which owns the Max streaming service, and Disney+ owner The Walt Disney Co. (DIS) — may be benefactors of looser rules around consolidation, they said.

    Rosy earnings and AI

    For some stocks, outperformance was tied to rosy quarterly earnings results or guidance that some companies reported around or after Election Day, experts said.
    Many such businesses cited artificial intelligence as a growth driver.
    For example, Palantir Technologies (PLTR), cited “unprecedented” demand for its AI platform in the third quarter, helping deliver “exceptionally strong” earnings, Treasurer and CFO David Glazer told investors Nov. 4.

    Likewise, Axon beat analysts’ estimates in its Nov. 7 earnings results, with officials touting its “AI era plan” and raising earnings guidance, Goldberg said.
    Axon and Palantir stocks were up 38% and 22%, respectively, from Nov. 5 to Nov. 20, according to S&P Global Market Intelligence.
    Some companies benefited from a combination of policy and earnings, experts said.

    Rows of servers fill Data Hall B at Facebook’s Fort Worth Data Center in Texas.
    Paul Moseley/Fort Worth Star-Telegram/Tribune News Service via Getty Images

    Take Vistra Corp. (VST), an energy provider, for example. The company’s stock jumped 27% after Election Day.
    Vistra is in talks with large data centers — or “hyperscalers” — in Texas, Pennsylvania and Ohio to build or upgrade gas and nuclear plants, Stacey Doré, Vistra’s chief strategy and sustainability officer, said on the company’s Q3 earnings call Nov. 7.
    Tech companies are building more and more such data centers to fuel the AI revolution — and need to source increasing amounts of energy to run them.

    The ‘Elon Musk premium’

    And then there’s the Elon Musk factor.
    Tesla’s stock got an “Elon Musk premium” from Trump’s victory, said Goldberg of Professional Advisory Services.
    Musk, Tesla’s CEO, was one of Trump’s top campaign backers. Trump tapped him to co-lead a new Department of Government Efficiency. Shares of the electric-vehicle maker soared 14% the day after the election and almost 30% by week’s end.

    President-elect Donald Trump and Elon Musk talk ring side during the UFC 309 event at Madison Square Garden on Nov. 16, 2024 in New York.
    Chris Unger | Ufc | Getty Images

    But Tesla stock has additional tailwinds, experts said.
    For one, Trump wants to end a $7,500 federal tax credit for EVs. Scrapping that policy is expected to hurt Tesla’s EV rivals.
    Tesla has also been developing technology for driverless vehicles. In Tesla’s recent earnings call, Musk said he’d use his influence in Trump’s administration to establish a “federal approval process for autonomous vehicles.” More

  • 188 Shares169 Views

    in Finance

    ‘I have no money’: Thousands of Americans see their savings vanish in Synapse fintech crisis

    Thousands of Americans will receive little or nothing from savings accounts that were locked during the collapse of fintech middleman Synapse.
    Customers believed the accounts were backed by the full faith and credit of the U.S. government.
    CNBC spoke to a dozen customers caught in the predicament, people who have lost sums ranging from $7,000 to well over $200,000.
    While there’s not yet a full tally of those left shortchanged, at fintech Yotta alone, 13,725 customers say they are being offered a combined $11.8 million despite putting in $64.9 million in deposits.

    Oscar Wong | Moment | Getty Images

    For 15 years, former Texas schoolteacher Kayla Morris put every dollar she could save into a home for her growing family.
    When she and her husband sold the house last year, they stowed away the proceeds, $282,153.87, in what they thought of as a safe place — an account at the savings startup Yotta held at a real bank.

    Morris, like thousands of other customers, was snared in the collapse of a behind-the-scenes fintech firm called Synapse and has been locked out of her account for six months as of November. She held out hope that her money was still secure. Then she learned how much Evolve Bank & Trust, the lender where her funds were supposed to be held, was prepared to return to her.
    “We were informed last Monday that Evolve was only going to pay us $500 out of that $280,000,” Morris said during a court hearing last week, her voice wavering. “It’s just devastating.”
    The crisis started in May when a dispute between Synapse and Evolve Bank over customer balances boiled over and the fintech middleman turned off access to a key system used to process transactions. Synapse helped fintech startups like Yotta and Juno, which are not banks, offer checking accounts and debit cards by hooking them up with small lenders like Evolve.
    In the immediate aftermath of Synapse’s bankruptcy, which happened after an exodus of its fintech clients, a court-appointed trustee found that up to $96 million of customer funds was missing.
    The mystery of where those funds are hasn’t been solved, despite six months of court-mediated efforts between the four banks involved. That’s mostly because the estate of Andreessen Horowitz-backed Synapse doesn’t have the money to hire an outside firm to perform a full reconciliation of its ledgers, according to Jelena McWilliams, the bankruptcy trustee.

    But what is now clear is that regular Americans like Morris are bearing the brunt of that shortfall and will receive little or nothing from savings accounts that they believed were backed by the full faith and credit of the U.S. government.
    The losses demonstrate the risks of a system where customers didn’t have direct relationships with banks, instead relying on startups to keep track of their funds, who offloaded that responsibility onto middlemen like Synapse.

    Zach Jacobs, 37, of Tampa, Florida helped form a group called Fight For Our Funds after losing more than $94,000 that he had in a fintech savings account called Yotta.
    Courtesy: Zach Jacobs

    ‘Reverse bank robbery’

    There are thousands of others like Morris. While there’s not yet a full tally of those left shortchanged, at Yotta alone, 13,725 customers say they are being offered a combined $11.8 million despite putting in $64.9 million in deposits, according to figures shared by Yotta co-founder and CEO Adam Moelis.
    CNBC spoke to a dozen customers caught in this predicament, people who are owed sums ranging from $7,000 to well over $200,000.
    From FedEx drivers to small business owners, teachers to dentists, they described the loss of years of savings after turning to fintechs like Yotta for the higher interest rates on offer, for innovative features or because they were turned away from traditional banks.
    One Yotta customer, Zach Jacobs, logged onto Evolve’s website on Nov. 4 to find he was getting back just $128.68 of the $94,468.92 he had deposited — and he decided to act.

    Arrows pointing outwards

    Zach Jacobs decided to act after logging onto Evolve’s website on Nov. 4 to find he was getting just $128.68 of his $94,468.92 in deposits.
    Courtesy: Zach Jacobs

    The 37-year-old Tampa, Florida-based business owner began organizing with other victims online, creating a board of volunteers for a group called Fight For Our Funds. It’s his hope that they gain attention from press and politicians.
    So far, 3,454 people have signed on, saying they’ve lost a combined $30.4 million.
    “When you tell people about this, it’s like, ‘There’s no way this can happen,'” Jacobs said. “A bank just robbed us. This is the first reverse bank robbery in the history of America.”
    Andrew Meloan, a chemical engineer from Chicago, said he had hoped to see the return of $200,000 he’d deposited with Yotta. Early this month, he received an unexpected PayPal remittance from Evolve for $5.
    “When I signed up, they gave me an Evolve routing and account number,” Meloan said. “Now they’re saying they only have $5 of my money, and the rest is someplace else. I feel like I’ve been conned.”

    A bank just robbed us. This is the first reverse bank robbery in the history of America.”

    Zach Jacobs
    Yotta customer

    Cracks in the system

    Unlike meme stocks or crypto bets, in which the user naturally assumes some risk, most customers viewed funds held in Federal Deposit Insurance Corp.-backed accounts as the safest place to keep their money. People relied on accounts powered by Synapse for everyday expenses like buying groceries and paying rent, or for saving for major life events like home purchases or surgeries.
    Several people CNBC interviewed said signing up seemed like a good bet since Yotta and other fintechs advertised that deposits were FDIC-insured through Evolve.
    “We were assured that this was just a savings account,” Morris said during last week’s hearing. “We are not risk-takers, we’re not gamblers.”
    A Synapse contract that customers received after signing up for checking accounts stated that user money was insured by the FDIC for up to $250,000, according to a version seen by CNBC.
    “According to the FDIC, no depositor has ever lost a penny of FDIC-insured funds,” the 26 page contract states.

    ‘We are responsible’

    Abandoned by U.S. regulators who have so far declined to act, they are left with few clear options to recoup their money.
    In June, the FDIC made it clear that its insurance fund doesn’t cover the failure of nonbanks like Synapse, and that in the event of such a firm’s failure, recovering funds through the courts wasn’t guaranteed.
    The next month, the Federal Reserve said that as Evolve’s primary federal regulator it would monitor the bank’s progress “in returning all customer funds” to users.
    “We are responsible for working to ensure that the bank operates in a safe and sound manner and complies with applicable laws, including laws protecting consumers,” Fed general counsel Mark E. Van Der Weide said in a letter.
    In September, the FDIC proposed a new rule that would force banks to keep detailed records for customers of fintech apps, improving the chances that they qualify for coverage in a future calamity and cutting the risk that funds would go missing.
    McWilliams, herself a former FDIC chair during the first Trump presidency, told the California judge handling the Synapse bankruptcy case last week she was “disheartened” that every financial regulator has decided not to help.
    The FDIC and Fed declined to comment for this story, and McWilliams didn’t respond to emails.

    Jelena McWilliams, chairman of the Federal Deposit Insurance Corporation, testifies during a House Financial Services Committee hearing in Rayburn Building titled “Oversight of Prudential Regulators: Ensuring the Safety, Soundness and Accountability of Megabanks and Other Depository Institutions,” on Thursday, May 16, 2019.
    Tom Williams | CQ-Roll Call, Inc. | Getty Images

    Winners and losers

    Things hadn’t always seemed so dire. Early in the proceedings, McWilliams suggested to Judge Martin Barash that customers be given a partial payment, essentially spreading the pain among everyone.
    But that would’ve required more coordination between Evolve and the other lenders that held customer funds than what ultimately happened.
    As the hearings dragged on, the three other institutions, AMG National Trust, Lineage Bank and American Bank, began disbursing the funds they had, while Evolve took months to perform what it initially said would be a comprehensive reconciliation.
    Around the time Evolve completed its efforts in October, it said it could only figure out the user funds it held, not the location of the missing funds. That’s at least partly because of “very large bulk transfers” of funds without identification of who owned the money, a lawyer for Evolve testified last week.
    As a result, the bankruptcy process has minted relative winners and losers.
    Some end users recently received all their funds back, while others, like Indiana FedEx driver Natasha Craft, received none, she told CNBC.

    Natasha Craft, a 25-year-old FedEx driver from Mishawaka, Indiana. She has been locked out of her Yotta banking account since May 11.
    Courtesy: Natasha Craft

    As of Nov. 12, the four banks released $193 million to customers, or more than 85% of what they held earlier in the year.
    The Nov. 13 hearing has provided the only public venue for victims to register their distress; dozens of victims queued up in the hopes they could testify about receiving a tiny fraction of what they’re owed. The event went longer than three hours.
    “You can’t imagine the panic when it said I was getting 81 cents,” said Andreatte Caliguire, who said she is owed $22,000. “I have no money, I have no path forward, I have nothing.”

    ‘Nothing optimistic’

    Evolve says that “the vast majority” of funds held for Yotta and other customers were moved to other banks in October and November of 2023 on directions from Synapse, according to an Evolve spokesman. 
    “Where those end user funds went after that is an important question, but unfortunately not one Evolve can answer with the data it currently has,” the spokesman said.
    Yotta says that Evolve has given fintech firms and the trustee no information about how it determined payouts, “despite acknowledging in court that a shortfall existed at Evolve prior to October 2023,” according to a spokesman for the startup, who noted that several executives have recently left the bank. “We hope regulators take notice and act.”
    In statements released ahead of this month’s hearing, Evolve said that other banks refused to participate in its efforts to create a master ledger, while AMG and Lineage said that Evolve’s implication that they had the missing funds was “irresponsible and disingenuous.”
    As the banks and other parties hurl accusations at each other and lawsuits pile up, including pending class-action efforts, the window for cooperation is rapidly closing, Barash said last week.
    “As time goes by, my impression is that unless the banks that are involved can sort this out voluntarily, it may not get sorted out,” Barash said. “There’s nothing optimistic about what I’m telling you.”

    Don’t miss these insights from CNBC PRO More

  • 200 Shares99 Views

    in Business

    ‘Wicked’ tallies $19 million in previews, as ‘Gladiator II’ team-up heads for $200 million opening weekend

    Universal’s “Wicked” and Paramount’s “Gladiator II” arrive ahead of the Thanksgiving holiday and are expected to tally more than $200 million in combined ticket sales this weekend.
    “Wicked” has already tallied $19.2 million at the domestic box office from advance screenings held during the week. Box-office analysts project a domestic opening weekend of between $120 million and $140 million.
    Meanwhile, “Gladiator II” took in $6.5 million from Thursday previews and is expected to add between $60 million and $80 million to the domestic weekend tally.

    Posters for Wicked and Gladiator II
    Sources: Universal (L), Paramount (R)

    The box office this weekend will be painted pink and green, with a splash of red.
    Universal’s “Wicked” and Paramount’s “Gladiator II” arrive ahead of the Thanksgiving holiday and are expected to tally more than $200 million in combined ticket sales this weekend.

    “‘Wicked’ and ‘Gladiator II’ are the kind of counter-programming duo punch movie theaters and audiences have been eagerly anticipating,” said Shawn Robbins, director of analytics at Fandango and founder of Box Office Theory. “This fall’s box office has seen its share of ups and downs as usual, but these two films are on course to kickstart a potentially historic holiday corridor with ‘Moana 2’ also ready to deliver big results during Thanksgiving next week.”
    “Wicked” has already tallied $19.2 million at the domestic box office from advance screenings held during the week. Amazon Prime members doled out $2.5 million at 750 theaters in the U.S. on Monday, and another $5.7 million was collected from around 2,000 theaters on Wednesday in the U.S. and Canada. “Wicked” snared an additional $11 million from standard Thursday night preview screenings at around 3,300 theaters.
    Tracking projections for “Wicked” started around $80 million in late October, but have since risen to a range of $120 million to $140 million, with some projecting an even higher three-day total for the film’s debut weekend.
    Hollywood has struggled to market and make a profit on movie musicals in recent years. However, the industry has also seen fan-favorite IP-driven titles outperform. With “Wicked” being based on one of Broadway’s most popular musicals, box-office analysts are finding it tricky to predict where it will land.
    Heading into its opening, “Wicked” held a 92% “Fresh” rating on review aggregator Rotten Tomatoes from more than 160 critics. Its popcornmeter, a metric the site uses to calculate what percentage of verified movie ticket holders rated the film at 3.5 stars or higher, stands at 99% with more than 2,500 ratings.

    Cynthia Erivo and Ariana Grande star as Elphaba and Glinda in Universal’s “Wicked.”

    Whatever it hauls in for the weekend, “Wicked” should debut as the highest-opening Broadway adaptation in cinematic history. The current record holder is Disney’s “Into the Woods,” which secured $31 million during its first three days in theaters in 2014, according to data from Comscore.
    Meanwhile, “Gladiator II” took in $6.5 million from Thursday previews and is expected to add between $60 million and $80 million to the domestic weekend tally. The film, which arrives 24 years after the original, has secured a 73% “Fresh” rating on Rotten Tomatoes from more than 200 reviews. For comparison, “Gladiator” snared $34.8 million during its opening weekend back in May 2000.

    The power of ‘Glicked’

    “The so-called ‘Glicked’ movie mashup is reminiscent of the ‘Barbenheimer’ phenomenon and is creating a cultural buzz,” said Paul Dergarabedian, senior media analyst at Comscore. “And though not quite at that level, has certainly raised the profile of both films and that combined with overwhelming positive reviews has positioned these two very different movies for opening weekend glory and more importantly long-term playability through the holidays.”
    Between “Wicked,” “Gladiator II” and previously released films still in theaters, box-office analysts foresee a weekend of ticket sales between $200 million and $250 million. While impressive, that would still fall outside of the top 20 highest-grossing weekends of all time, according to data from Comscore.
    The “Barbenheimer” weekend of July 21, 2023, topped $311 million, the fourth-highest weekend haul of all time.
    “It’s not all about the first hours or days, though,” Robbins noted. “These films can and probably will play well for weeks to come, especially if word of mouth mirrors that of critics’ reactions.”
    This weekend’s tally will help bolster the overall annual box office, which lags 11% behind 2023 levels during the same period. And the moviegoers coming to theaters will be treated to advertisements for other films coming in December and later in 2025.
    “Our job is to maximize what’s coming in that door,” said Greg Marcus, CEO of Marcus Corp., owner of Marcus Theatres and Marcus Hotels & Resorts. “Take care of our customers. Give the customers that show up a great experience. Make sure that lines are moving as quickly as we can, so that we can serve them, literally and figuratively, and show them what a great time it is to go to the movies and enjoy something with other people.”
    Marcus Theatres alongside dozens of other cinema chains, big and small, are offering guests drink and food specials, themed popcorn buckets and beverage containers as well as other movie merchandise at their locations.
    Cinemark has a “Gladiator II” popcorn bucket shaped like the Colosseum and a gladiator helmet that fits over its drink cups to hold popcorn. Regal has a witch hat-shaped cup. AMC’s menu features pink and green candy-coated popcorn as well as a collection of themed drinks like green apple ICEE, Sprite variants called Ozdust Punch and Emerald Elixir and alcoholic beverages named Popular Pink and Gravity Green.
    Disclosure: Comcast is the parent company of NBCUniversal, CNBC, Fandango and Rotten Tomatoes. NBCUniversal is the distributor of “Wicked.”

    Don’t miss these insights from CNBC PRO More