More stories

  • in

    SEC sues entrepreneur, alleging $1 billion in unregistered crypto sales and multimillion-dollar fraud

    Richard Schueler, also known as Richard Heart, defrauded investors out of millions through his Hex cryptoasset, the SEC alleged.
    Schueler used proceeds from the $1 billion offer-and-sale to purchase high-end watches, real estate, and jewels, it said.
    Schueler faces three civil charges in the Eastern District of New York.

    SEC Chairman Gary Gensler participates in a meeting of the Financial Stability Oversight Council at the U.S. Treasury on July 28, 2023 in Washington, DC.
    Kevin Dietsch | etty Images

    The Securities and Exchange Commission on Monday filed charges against a U.S. citizen it alleged raised more than $1 billion through the unregistered offer and sale of crypto securities before pilfering millions to fuel a high-status lifestyle and the acquisition of luxury goods, including the largest black diamond in the world.
    Richard Schueler, also known as Richard Heart, operated three crypto-asset offerings: Hex, PulseChain and PulseX. The SEC alleged he touted the investments as a “pathway to grandiose wealth.”

    The offerings were made through Hex tokens, which were marketed as an ethereum-based “Certificate of Deposit.” But the SEC alleged that the 38% annual return that Schueler touted was nothing more than cover for an elaborate scheme.
    Schueler faces three charges of securities fraud in civil court.
    Schueler, who was born in the United States but resides in Finland, surreptitiously defrauded his investors, the SEC alleged, by generating hundreds of millions of dollars worth of wash trading activity on his platforms, “creating the false impression of significant trading volume and organic demand for Hex tokens.”
    Schueler misappropriated at least $12 million of investor funds, the SEC alleged, to purchase a 555-carat black diamond, high-end vehicles, and luxury watches. A $550,000 Rolex Daytona, an $800,000 Rolex GMT Master II and another unspecified $1.38 million Rolex watch were among his watch purchases, the SEC said.
    In March, Schueler began to pare back his social media presence, deactivating his Instagram profile to “show more humility and respectfulness.”
    The charges against Schueler were filed in the Eastern District of New York. More

  • in

    Stocks making the biggest moves premarket: Hasbro, Adobe, GoodRx, SBA Communications and more

    A Hasbro Monopoly board game arranged in Dobbs Ferry, New York, Feb. 6, 2022.
    Tiffany Hagler-Geard | Bloomberg | Getty Images

    Check out the companies making headlines before the bell:
    Adobe — The stock gained 2.4% before the bell after Morgan Stanley upgraded shares to overweight from equal weight and boosted its price target, citing artificial intelligence tailwinds.

    Chevron — Shares rose 1.6% after Goldman Sachs upgraded Chevron to buy from neutral and hiked its price target. Analysts said the oil giant is due for a breakout.
    Ford Motor — Shares declined 1.1% after Jefferies downgraded the stock to hold, citing weakness in Model E guidance.
    Walt Disney — The stock rose 0.7% after Disney reportedly brought back two former executives who were previously considered potential successors to Bob Iger, according to a Financial Times report citing people familiar. The two are Kevin Mayer and Tom Staggs.
    XPeng — The U.S.-listed shares of Chinese electric vehicle maker XPeng fell 2% in premarket trading. UBS on Monday downgraded the company to neutral from buy after the stock’s extraordinary run-up, saying it expects near-term upside has been priced in. The stock is up 135% this year.
    Hasbro — The toymaker added 2.9efore the bell after Bank of America upgraded the stock to buy from neutral. Bank of America said the company should beat expectations for earnings when it reports on Thursday given the strong demand for the Lord of the Rings Magic set.

    United Parcel Service — Shares fell 1% after Credit Suisse downgraded UPS to neutral from outperform, citing labor concerns.
    GoodRX — The digital healthcare platform saw shares rise more than 8% premarket after Cowen upgraded the stock to outperform, saying its pharmacy benefit management partnerships – like Express Scripts and CVS’ Caremark – help not just generate a new revenue stream but also solidify the company’s position in the healthcare ecosystem. Cowen also raised its price target to reflect about 78% potential upside.
    SBA Communications — Shares fell 1.6% in premarket trading. The real estate investment trust involved in wireless communications infrastructure is set to report its second-quarter results after the close Monday.
    ON Semiconductor — The chipmaker’s shares gained 1.9% ahead of second-quarter earnings. ON Semiconductor is projected to report earnings of $1.21 per share on revenue of $2.02 billion, according to analysts polled by FactSet. It’s set to report results Monday morning.
    — CNBC’s Alex Harring, Hakyung Kim, Tanaya Macheel and Samantha Subin contributed reporting More

  • in

    Robinhood rival eToro agrees $120 million share sale at discounted valuation

    EToro offered early employees and angel investors a chance to sell their shares to some of its institutional investors, according to a memo to employees obtained by CNBC.
    The share sale totaled $120 million and gave the company a slightly lower valuation than the $3.5 billion it earned in a primary funding round earlier this year, according to CNBC sources familiar with the matter.
    It comes after eToro last year scrapped its plans to go public in a merger with a blank-check company, Fintech V.

    The eToro logo is seen during the 2021 Web Summit in Lisbon, Portugal.
    Pedro Fiúza | Nurphoto | Getty Images

    Stock trading platform eToro agreed to a $120 million secondary share sale, giving the company a slightly lower valuation than the $3.5 billion it was valued at in a primary funding round earlier this year.
    The Israeli digital brokerage, which offers users trading in stocks, crypto, and contracts for difference, gave early employees and angel investors a chance to sell shares to some of eToro’s existing investors, according to a memo to employees obtained by CNBC.

    The round is a secondary share sale, meaning the company hasn’t issued any new shares and won’t net any income from the transaction. However, it’s an indicator of the price investors are currently willing to pay to own shares of the firm.
    It comes after eToro last year scrapped its plans to go public in a merger with a blank-check company, Fintech V.
    The deal would have valued the company at $10 billion, but a downturn in equity and crypto prices threw a spanner in the works, as investors reassessed their exposure to tech and retail brokerages suffered a slump in trading activity.

    “As a business which continues to demonstrate sustainable, profitable growth we are considered an attractive investment opportunity by many investors,” Yoni Assia, eToro’s CEO and co-founder, said in the Monday memo to employees. 
    “This secondary transaction will give existing shareholders in eToro and veteran employees who have vested options the opportunity to sell a proportion of their shares to these purchasers.”

    “This is not a primary i.e. eToro is not raising money — rather it is a moment for some long standing shareholders and employees to take some liquidity. As always, please maintain confidentiality and do not share any details of this potential transaction with anyone. Employees with eligible options will receive an email with further details.”
    EToro most recently raised $250 million from investors at a $3.5 billion valuation, far lower than the $10 billion it was seeking in its bid to float via SPAC.
    Investors in that round included SoftBank Vision Fund 2, ION Investment Group and Velvet Sea Ventures. The investment came in the form of an advance investment agreement, which is where investors pay in advance for shares that will be allocated at a later date, sometimes at a discount.
    EToro agreed it would convert the investment to equity on the condition that the SPAC deal doesn’t go ahead — which it didn’t. 
    Earlier this year, eToro signed a partnership with Twitter, now known as X, allowing users of the social media platform to access stock and crypto trading by searching for so-called “cashtags,” which are searchable by adding a dollar sign before the ticker symbol of a stock or other asset.

    EToro said it is looking to expand its partnership with Twitter, or X, in a number of ways. The company’s CEO recently met with X CEO Linda Yaccarino in New York to discuss working on expanding their partnership.
    EToro, like many online wealth management platforms, benefited from the surge of demand during the Covid-19 pandemic when people were stuck indoors and had more time — and in some cases money — to splash a bit of their excess cash on stocks and other assets.
    GameStop, and several other so-called “meme” stocks, skyrocketed in response to heightened retail investor demand which put pressure on short-selling funds.
    More recently, online brokerage platforms have had a tougher time. The rising cost of living has made it tougher for consumers to part with the cash they were flush with during the days of Covid. Freetrade, the U.K. brokerage startup, slashed its valuation by a whopping 65% in a crowdfunding round, citing a “different market environment.”
    Read the full memo eToro CEO Yoni Assia sent out to staff below:

    Dear eTorians,
    As August approaches I wanted to take a moment to acknowledge the many achievements of H1 and share an outlook for H2.
    As outlined in July’s AHM, we had strong business performance in the first half of the year resulting in EBITDA (profits) of over $50 million. Funded accounts now stand at almost 3 million and our assets under administration (AuA) are $7.8 billion. This positive start to the year was driven by the rally in equity markets  (in June we saw the highest volume of equities trading since 2021) plus a recovery in crypto markets. We have also maintained our focus on costs to ensure sustainable, profitable growth. 
    2023 to date has been very busy in terms of product development, launches and partnerships with highlights including: the significant upgrade to our charts via a partnership with TradingView (more coming soon), an ISA with MoneyFarm, major milestones in terms of UX optimization including the new AI assistant, the launch of the amazing new eToro Academy, the launch of extended hours trading, expanding our football sponsorships to include women, adding more assets and so much more. 
    I also want to update that we were recently approached by several existing investors who have shown an interest in buying more shares in eToro.  As a business which continues to demonstrate sustainable, profitable growth we are considered an attractive investment opportunity by many investors. [Please note this is not financial advice!]  This secondary transaction will give existing shareholders in eToro and veteran employees who have vested options the opportunity to sell a proportion of their shares to these purchasers. This is not a primary i.e. eToro is not raising money –  rather it is a moment for some long standing shareholders and employees to take some liquidity. As always, please maintain confidentiality and do not share any details of this potential transaction with anyone. Employees with eligible options will receive an email with further details.
    For those of you taking a well-earned break in August, enjoy your vacation and I hope you come back refreshed and energized for an exciting second half of the year.
    Best,
    Yoni More

  • in

    A.I. is on a collision course with white-collar, high-paid jobs — and with unknown impact

    About 1 in 5 American workers have a job with “high exposure” to artificial intelligence, according to Pew Research Center. It’s unclear if AI would enhance or displace these jobs.
    Workers with the most exposure to AI like ChatGPT tend to be women, white or Asian, higher earners and have a college degree, Pew found.
    Technology has led some to “lose out” in the past, largely when their job is substituted by automation, one expert said.

    Tomml | E+ | Getty Images

    The notion of technological advancement upending the job market isn’t a new phenomenon.
    Robots and automation, for example, have become a mainstay of factory floors and assembly lines. And it has had various effects on the workplace, by displacing, changing, enhancing or creating jobs, experts said.

    related investing news

    Artificial intelligence — a relatively nascent and fast-moving type of technology — will undoubtedly do the same, experts said. However, it’s likely such tech will target a different segment of the American workforce than has been the case in the past.
    “AI is distinguished from past technologies that have come over the last 100-plus years,” said Rakesh Kochhar, an expert on employment trends and a senior researcher at Pew Research Center, a nonpartisan think tank. “It is reaching up from the factory floors into the office spaces where white-collar, higher-paid workers tend to be.”
    “Will it be a slow-moving force or a tsunami? That’s unknown,” Kochhar added.

    About 1 in 5 American workers have ‘high exposure’ to AI

    In basic terms, AI is built to mimic a human’s cognitive ability — i.e., to think like a human. It lets computers and machines perform tasks by themselves, Kochhar said.
    ChatGPT — an AI chatbot developed by San Francisco-based OpenAI — went viral after debuting to the public in November 2022, fueling a national debate as millions of people used the program to write essays, song lyrics and computer code.

    Such technology differs from robots, which generally perform physical tasks like lifting or moving objects.  
    In a new Pew study, Kochhar found that 19% of U.S. workers are in jobs with high exposure to AI. The study uses the term “exposure” because it’s unclear what AI’s impact — whether positive or negative — might be.
    More from Personal Finance:Don’t keep your job loss a secretYou can use A.I. to land a job, but it can ‘backfire’The job market is still favorable for workers
    The high exposure group includes occupations like budget analysts, data entry keyers, tax preparers, technical writers and web developers. They often require more analytical skills and AI may therefore replace or assist their “most important” job functions, the report said.
    Workers with the most AI exposure tend to be women, white or Asian, higher earners and have a college degree, the report said.
    “Certainly, there could be some [job] displacement,” said Cory Stahle, an economist at job site Indeed. However, AI could also “open new occupations we don’t even know about yet.”
    “The jury is still out,” he added.

    Conversely, 23% of American workers have low exposure to AI, according to the Pew report.
    These workers — like barbers, dishwashers, firefighters, pipelayers, nannies and other child care workers — tend to do general physical activities that AI (at least, in its current form) can’t easily replicate. The remaining share of jobs — 58% — have varying AI exposure.
    In 2022, workers in the most exposed jobs earned $33 per hour, on average, versus $20 in jobs with the least exposure, according to the Pew study, which leveraged U.S. Department of Labor data from the Occupational Information Network.

    Which workers may win and lose with AI

    onurdongel | E+ | Getty Images

    Fear of technology and its ability to destroy jobs has been around since the Industrial Revolution, said Harry Holzer, a professor at Georgetown University and former chief economist at the federal Labor Department.
    “To date, these fears have been mostly wrong — but not entirely,” Holzer wrote recently.
    Over time, automation often creates as many jobs as it destroys, added Holzer, the author of the 2022 book titled “Shifting Paradigms” about the digital economy.
    Technology makes some workers more productive. That reduces costs and prices for goods and services, leading consumers to “feel richer” and spend more, which fuels new job creation, he said.
    In advanced economies like the U.S., new technologies have a negative short-term impact on net jobs, causing total employment to fall by 2 percentage points, according to Gene Kindberg-Hanlon, a World Bank economist. However, the impact swings “modestly positive” after four years, he found.

    Will it be a slow-moving force or a tsunami? That’s unknown.

    Rakesh Kochhar
    senior researcher at Pew Research Center

    However, some workers “lose out,” Holzer said. That group largely includes workers who are substituted by technology — those directly replaced by machines and then forced to compete.
    “Digital automation since the 1980s has added to labor market inequality, as many production and clerical workers saw their jobs disappear or their wages decline,” Holzer said.
    Business owners, who generally reap more profit and less need for labor, are often the winners, he said.
    The “new automation” of the future — including AI — has the potential to “cause much more worker displacement and inequality than older generations of automation,” perhaps eliminating jobs for millions of vehicle drivers, retail workers, lawyers, accountants, finance specialists and health-care workers, among many others, he said.
    It will also create new challenges and needs like retraining or reskilling; those may have knock-on effects, like child care needs for disadvantaged workers, Holzer said.

    Indeed data suggests there’s been a “pretty significant uptick” in the number of employers looking for workers with AI-related skills, Stahle said.
    For example, about 20 jobs listings per million advertised by Indeed in July 2018 sought some type of AI skill. That figure had swelled to 328 jobs per million as of July 2023.
    This remains a small share of overall Indeed job ads but is noticeable growth from “basically zero” five years ago, Stahle said. And most of the growth has occurred in the past year, likely tied to the recent popularity of ChatGPT, he added.
    The growth has largely occurred in two camps: Workers building AI technology and those in more creative or marketing roles who use those A.I. tools, Stahle said.
    Jobs in the latter group will be an especially interesting area to watch, to see how artificial intelligence might disrupt roles as varied as marketing, sales, customer service, legal and real estate, he added. More

  • in

    The fight over a bill targeting credit card fees pits payment companies against retailers

    A bipartisan push in Washington to clamp down on credit card fees is pitting retailers like Walmart against network payment processors such as Visa.
    Bipartisan support for the Credit Card Competition Act has surged since it was introduced last year.
    “It’s time to inject real competition into the credit card network market, which is dominated by the Visa-Mastercard duopoly,” Sen. Dick Durbin, D-Ill., said.

    Visa Inc. and Mastercard Inc. credit cards are arranged for a photograph in Tiskilwa, Illinois, U.S.
    Daniel Acker | Bloomberg | Getty Images

    A bipartisan push in Washington to clamp down on credit card fees is pitting retailers against network payment processors — and both sides are working hard to gain the attention of consumers.
    The Credit Card Competition Act was reintroduced last month in both the House and the Senate, after not being brought up for a vote in either chamber during the previous Congress.

    The measure aims to bolster competition for credit card processing networks by requiring big banks to allow at least one network that isn’t Visa or Mastercard to be used for their cards. This would give merchants who pay interchange fees a choice they otherwise rarely get. 
    Amazon, Best Buy, Kroger, Shopify, Target and Walmart are among the list of nearly 2,000 retailers, platforms and small businesses urging lawmakers to pass the bill. Retailers in support of the legislation argue credit card processing costs are hurting consumers by driving up the cost of business, and, in turn, the price shoppers pay at checkout.
    On the other side of the fight, major credit card processing networks like Visa, Mastercard, Discover and Capital One say the bill will actually hurt consumers by diminishing popular credit card rewards programs and lessening fraud protections.
    Bipartisan support for the bill has surged since it was introduced last year. As of now, there is no vote scheduled on the measure in either chamber of Congress, but there are indications a vote could come by year-end.
    Doug Kantor, a member of the Merchants Payments Coalition executive committee, remains “optimistic” that the Credit Card Competition Act could end up as an amendment attached to a larger piece of legislation at some point.

    “It’s time to inject real competition into the credit card network market, which is dominated by the Visa-Mastercard duopoly,” Sen. Dick Durbin, D-Ill., said in a statement to CNBC. He’s a sponsor of the bill and one of its most outspoken advocates.
    Visa and Mastercard account for 80% of all credit card volume, according to data from the Nilson Report, a publication tracking the global payment industry. Durbin says the legislation would “help reduce swipe fees and hold down costs for Main Street merchants and their customers.”
    Swipe fees are often built into the price consumers pay for goods and services and have more than doubled in the past decade, hitting a record $160.7 billion in 2022, according to the Nilson Report. On average, U.S. credit card swipe fees account for 2.24% of a transaction, according to the Merchants Payments Coalition. That’s why some businesses add a surcharge to bills for customers paying with debit or credit cards to encourage cash transactions. 
    The new legislation would require banks with assets over $100 billion to provide customers with a choice of at least two different payment networks to process credit card transactions. The bill also stipulates that Visa and Mastercard can only account for one of the choices as a way to prevent the two largest networks from being the only options offered to merchants. 
    “Interchange fees are effectively attacks on commerce,” said Shopify president Harley Finkelstein. “We began to notice that these fees kept climbing and climbing and climbing, and we felt that something was up.”
    The e-commerce platform known for helping businesses create their own custom digital stores, operates in 175 countries worldwide. “”Relative to every other country Shopify operates in, interchange fees are the highest in America,” Finkelstein said.
    Larger platforms and retailers like Amazon, Shopify and Walmart, as well as payment processors like Capital One, Discover and Visa, are funding efforts to pass or block this bill. In total, 26 organizations have mentioned the Credit Card Competition Act by name in their 2023 first-quarter lobbying reports, which were filed before the legislation was reintroduced last month, according to data from Open Secrets, a nonprofit group tracking campaign finance and lobbying data. 
    The Electronic Payments Coalition, a group representing big banks, credit unions, community banks and payment card networks said the legislation “would add billions of dollars to the bottom lines of mega-retailers every year while eliminating almost all the funding that goes towards popular credit cards rewards programs, weakening cybersecurity protections, and reducing access to credit,” in a June 9 post on its website. 

    Simon Dawson | Bloomberg | Getty Images

    CNBC reached out to major credit card processors including Visa, American Express, Discover and Capital One. All declined to comment or referred us to the Electronic Payments Coalition. Mastercard did not provide a response despite CNBC’s multiple attempts to get one.
    Shares of Visa and Mastercard are up more than 12% each this year as of Friday’s close.
    “Interchange revenue will dry up,” according to Aaron Stetter, the executive director of the Electronic Payments Coalition. 
    Stetter describes the bill as a “bait and switch that harms consumers,” because it “ultimately gives the decision-making of where the transaction is going to be routed to the merchant” instead of the card issuer or consumer. 
    Opponents say the bill misleads consumers who may think that their Mastercard or Visa credit card is being processed over the Visa network but could actually end up being routed over a separate cheaper network with fewer fraud protections and little to no customer rewards programs, according to Stetter.

    History repeats itself?

    In 2010, lawmakers passed the Durbin amendment as part of the Dodd-Frank Act, which sought to tighten financial regulation in the wake of the 2008 economic crisis. The amendment was supposed to cause a trickle-down savings effect, where merchants would pass along debit card processing savings to customers in the form of lower prices for their goods and services.
    But a 2015 survey conducted by the Richmond Federal Reserve found the Durbin amendment did little to lower costs for consumers and merchants. Just 1.2% of the surveyed merchants reduced prices, and 11.1% said their debit card processing costs declined. Nearly one-third of respondents reported even higher debit card swipe fees, according to the survey. 
    Brian Kelly, founder of the travel blog The Points Guy, referred to Durbin as the “grim reaper of debit card rewards” during his July 11 appearance on CNBC’s “The Exchange.”

    “When he passed that amendment over a decade ago, not only did we see fees go up, but consumers could no longer earn rewards on debit cards,” Kelly said. ThePointsGuy.com is compensated by credit card companies for the card offers listed on its website, according to a disclosure at the bottom of the webpage.
    But a new research paper from the global payments consulting firm CMSPI argues the new bill won’t have the kind of dire impact Kelly is warning about. “Credit card rewards are unlikely to disappear based on current issuer margins on rewards and experience from other markets,” according to the CMSPI paper.
    The same firm also estimates the new legislation would save merchants and their customers more than $15 billion a year in swipe fees. That savings would be nearly 70 times the amount of any expected reduction in rewards, according to the new study.

    Innovation and lower fees

    Sheldon Cooper | Lightrocket | Getty Images

    Businesses are trying other ways to cut fees, regardless of legislation.
    Tandym, a startup offering e-commerce brands the chance to create a private label debit and credit card, similar to big-box retailer-branded credit cards, is tackling the problem of high interchange fees through technology.
    Before founding Tandym, CEO Jennifer Galspie-Lundstrom worked at Capital One for seven years. She believes the Credit Card Competition Act would take years and cost billions of dollars to execute, calling it a “massive resource drain.” Instead, she said innovation will provide the answer to lower fees. 
    “We do not ride the Visa, Mastercard, American Express or Discover rails,” she said. “We’ve created essentially an alternative network where we can connect directly to a merchant.”
    Tandym’s interchange fees are typically 80% lower because it is not using the revenue to fund its own cash back incentives or rewards programs. Instead, Tandym helps small digital businesses like online bike retailer Jenson USA build integrated loyalty programs with the savings.
    Jenson started offering Tandym as a payment option to customers earlier this year. Orders processed over Tandym’s network cost about 2% less compared with Visa and Mastercard, according to Jenson’s director of IT, Jeff Bolkovatz. Those savings are now being used to help fund a 5% rewards program for Jenson USA’s customers. 
    “We basically just turned the savings that we got by using Tandym and gave it back to the customer to entice them to use it. The goal is to get them to be more loyal,” he said.
    Customers seem to like the program. Each shopper has placed an average of two and a half orders since Jenson USA started offering Tandym as a payment option, Bolkovatz said.  More

  • in

    Why substituting cryptocurrency for gold exposure may be a costly mistake

    Viewing cryptocurrency as “digital gold” may be a mistake.
    State Street Global Advisors’ George Milling-Stanley, whose firm runs the world’s largest gold exchange-traded fund, believes cryptocurrency is no substitute for the real thing due its vulnerability to big losses.

    “Volatility does not back up any claims for crypto to be a long-term strategic asset as a competitor to gold,” the firm’s chief gold strategist told CNBC’s “ETF Edge” earlier this week.
    Milling-Stanley’s firm is behind SPDR Gold Shares, the world’s largest physically backed gold ETF. It has a total asset value of more than $57 billion as of last week, according to the company’s website. The ETF is up 7% year to date as of Friday’s market close.
    Milling-Stanley believes gold’s 6,000-year history as a monetary asset serves as a significant sample basis to understand the benefits of investing in gold.
    “Gold is a hedge against inflation. Gold’s a hedge against potential weakness in the equity market. Gold’s a hedge against potential weakness in the dollar,” he noted. “To me, historically, the promise of gold for investors has … overtime [helped] to enhance the returns of a properly balanced portfolio.”
    The precious metal is having trouble this year staying above the $2,000 an ounce mark. But Milling-Stanley believes the economic backdrop bodes well for gold — recession or not.

    “It’s pretty clear that we’re liable to be in a period of slow growth. … Historically, gold has always done well during periods of slower growth,” Milling-Stanley said.
    Milling-Stanley also believes the relaxation of Covid-19 restrictions in China should spark more demand for gold. It’s known as the world’s largest consumer of gold jewelry behind India, according to the World Gold Council.
    “It’s not just China and India. It’s Vietnam, it’s Indonesia, it’s Thailand and Korea. It’s a whole raft of Asian countries that are really the main drivers of gold jewelry demand,” Milling-Stanley said.
    Gold settled at $1,960.47 an ounce Friday. The commodity is up more than 7% so far this year.

    Disclaimer More

  • in

    Stocks making the biggest moves midday: Intel, Roku, Sweetgreen, Ford and more

    Signage outside Intel headquarters in Santa Clara, California, Jan. 30, 2023.
    David Paul Morris | Bloomberg | Getty Images

    Check out the companies making headlines in midday trading. 
    Intel — The chip stock jumped more than 6% after the company posted better-than-expected second-quarter earnings results. The latest quarter marked a return to profitability after two consecutive losing periods. Intel’s forecast for the third quarter also came in above analyst expectations.

    Roku — Shares popped 31% after the company reported a smaller-than-expected loss for the recent quarter. The streaming stock posted a loss of 76 cents a share, ahead of the $1.26 loss per share expected by analysts, according to Refinitiv. Revenue came in at $847 million versus the estimated $775 million.
    New York Community Bancorp — The regional bank stock added 4.9% after JPMorgan upgraded shares to overweight from neutral, calling it a “massive market share taker” in the near and medium term.
    Biogen — The biotech company rose nearly 1% after the company said it’s acquiring Reata Pharmaceuticals for $172.50 per share, in a cash deal valued at about $7.3 billion. Shares of Reata popped 54% following the news.
    Procter & Gamble — The consumer giant’s stock climbed nearly 3%, boosting the blue-chip Dow Jones Industrial Average. The rally came after the company reported quarterly earnings and revenue that beat analysts’ expectations. P&G did release a gloomy outlook for its fiscal 2024 sales that fell short of Wall Street estimates, however.
    Exxon Mobil — The oil giant saw its shares dip 1.2% after the company posted mixed second-quarter results. The company reported earnings of $1.94 a share, excluding items, lower than the $2.01 estimate by analysts, per Refinitiv. Revenue came in at $82.91 billion, above the expected $80.19 billion.

    Enphase Energy — The solar stock dropped nearly 7% to hit a 52-week low after the company posted a revenue miss. Enphase said its second-quarter revenue reached $711 million, falling short of analyst estimates of $722 million, according to Refinitiv. Deutsche Bank, Wells Fargo and Roth MKM downgraded the stock following the disappointing report.
    Boston Beer — The alcohol beverage company saw its shares soar more than 16% following a stronger-than-expected quarterly report. Boston Beer posted earnings of $4.72 per share, well above an estimate of $3.38 per share from FactSet. Its revenue also came in above expectations.
    Sweetgreen — Shares of the salad chain slid nearly 9% after the company posted weak sales that missed Wall Street expectations in the second quarter and a net loss of $27.3 million, or 24 cents per share. Sweetgreen also reported narrowing losses and raised its forecast for restaurant-level margins. It’s aiming to turn a profit for the first time by 2024.
    Ford Motor — The automaker saw shares fall more than 3% after it said the adoption of electric vehicles is going more slowly than expected and that it expects to lose $4.5 billion on the EV business this year, widening losses from roughly $3 billion a year earlier. Otherwise, Ford posted strong quarterly earnings that beat Wall Street expectations and raised its full-year guidance.
    T. Rowe Price — Shares of the asset manager jumped more than 8% after T. Rowe Price reported stronger-than-expected earnings for the second quarter. The company earned an adjusted $2.02 per share on $1.61 billion of revenue. Analysts surveyed by Refinitiv were expecting $1.73 per share on $1.6 billion of revenue. CEO Rob Sharps said in a press release that T. Rowe Price has “identified substantial cost savings” that will slow expense growth going forward.
    — CNBC’s Jesse Pound, Tanaya Macheel and Samantha Subin contributed reporting.
    Correction: T. Rowe Price earned an adjusted $2.02 per share. A previous version misstated the figure. More

  • in

    $20 an hour, clothing stipend, meals: How a Big Four firm is trying to get teens interested in accounting

    Life Changes

    KPMG is offering high school interns $20-$22 an hour to encourage more teenagers to consider a career in accounting and help fix the talent pipeline problem.
    Nationwide, accounting firms are facing a significant staffing shortage.
    The profession’s lack of diversity is one of the reasons the industry has failed to attract young talent, studies show.

    KPMG is offering high schoolers paid internships to help fix accounting’s staffing shortage.

    By her own admission, Autumn Kimborough, 17, didn’t have a passion for accounting. But the rising high school senior from Flossmoor, Illinois, heard about a well-paid summer internship at KPMG, which included a $250 clothing stipend, and got excited.
    For the first time, the Big Four accounting firm organized a three-week session geared toward high schoolers with the specific goal of encouraging younger adults to consider a career in the field, according to Jennifer Flynn, KPMG’s community impact lead.

    Nearly 200 teenagers are participating in the summer internship program, which pays $20 or $22 an hour plus clothing and transportation stipends and meals, and includes a business etiquette class, among other skill-building tools.
    More from Personal Finance:This strategy could shave thousands off the cost of collegeHow to understand your financial aid offerThe cheapest states for in-state college tuition
    Students are also paired with mentors who track their progress. “We wanted to make sure our interns are getting a really full experience,” Flynn said.
    “I had some preconceived notions that it’s sitting at a desk,” Kimborough said, about being a CPA. “Now I’ve learned that with accounting you can travel and meet people and that drew me in.”

    Accounting firms face a shortage of CPAs

    Accounting firms have been facing a significant staffing shortage.

    Between the long hours, stressful deadlines and unflattering stereotype, more people are quitting the profession than going into it.
    Instead, students straight out of college are choosing to pursue careers in related fields such as investment banking, consulting or data analysis. The additional credit hours required to earn a certified public accountant license don’t help either.
    To tap the next generation of number crunchers, other accounting firms and nonprofit groups are also trying new strategies to address the talent pipeline problem by appealing directly to teenagers.

    Recently, The Deloitte Foundation, Urban Assembly and Outlier.org, which works with schools to offer for-credit online college courses, kicked off a dual enrollment pilot program in New York.
    Starting in the fall, some public high school juniors and seniors can take an Intro to Financial Accounting class and earn three college credits through the University of Pittsburgh, which they can then transfer to the college of their choice.
    The goal is also to inspire more diverse students to consider accounting careers.

    This isn’t the sexiest of professions.

    Elena Richards
    KPMG’s chief diversity, equity and inclusion officer

    “We know this isn’t the sexiest of professions,” said KPMG’s chief diversity, equity and inclusion officer Elena Richards. “We are really trying to focus on starting earlier and broadening the reach.”
    “This is our way of getting them to know this is a profession that has a lot of opportunities.”
    The profession’s lack of diversity is another reason the industry has failed to attract young talent, separate studies show. Just 2% of CPAs are Black and 5% are Hispanic despite significant job opportunities in the field, according to a recent AICPA Trends Report.
    Accounting often ranks among the top jobs with the best future outlook and six-figure salaries, according to other reports.
    Subscribe to CNBC on YouTube. More