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YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

Problems with the new FAFSA have delayed financial aid award letters, making it harder for students to make informed decisions about next year ahead of enrollment deadlines.
In the meantime, applying for more private scholarships may help ease the burden of the cost of college.
This could also be an opportunity for college hopefuls to weigh their options before factoring in aid, according to Nancy Goodman, founder of College Money Matters.

Problems with the new Free Application for Federal Student Aid have left many students in a bind.
In an early April update, the U.S. Department of Education said the delivery of some FAFSA applications would be further delayed due to ongoing issues with applicants’ tax data.  

“We are working hard to address these challenges and ensure schools have the information needed to package and make aid offers as quickly as possible,” Rich Cordray, chief operating officer for the Education Department’s Office of Federal Student Aid, said in a statement. 
However, these latest setbacks may mean it will take colleges even longer to get financial aid award letters to students, shortening the time those college hopefuls have to make informed enrollment decisions about next year.

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“Continually taking two steps forward and one giant step back is not a sustainable pathway toward getting financial aid offers out to students and families,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators. 
In ordinary years, financial aid award letters are sent around the same time as admission letters, meaning students have several weeks to compare offers ahead of National College Decision Day on May 1, the deadline to decide on a college for most admitted students.
Higher education already costs more than most families can afford, and college costs are still rising. Tuition and fees, plus room and board, for a four-year private college averaged $56,190 in the 2023-2024 school year; at four-year, in-state public colleges, it was $24,030 per year, according to College Board.

Arrows pointing outwards

For most students and their families, the college they choose hinges on the amount of financial aid offered and the breakdown between grants, scholarships, work-study opportunities and student loans.
“For many of our students, it’s less about comparing offers and more about, ‘Can I go at all?'” said Charles Welch, president and CEO of the American Association of State Colleges and Universities.
To that end, the AASCU is encouraging colleges and universities to extend their decision deadlines to give students and families more time to assess their financial aid picture.
Some schools have already postponed those enrollment deadlines to May 15 or later.
“Our number one concern is making sure we give students every opportunity they can to make determinations about financial eligibility,” Welch said.

FAFSA delays don’t have to mean rushed decisions

This could also be an opportunity to weigh your options before factoring in aid, according to Nancy Goodman, founder of College Money Matters, a nonprofit focused on helping high school students and their families make informed decisions about paying for college.
“It’s not unexpected that people would feel the FAFSA delays are forcing them into a rushed decision about something that has a major financial impact on their lives,” she said. “But this waiting time can be an opportunity, because it gives students and their families the chance to step back and consider their options from a more clear, objective and unhurried point of view.”
Consider also your choice of major and future earnings potential, Goodman advised. Often, a good rule of thumb is not to borrow more than you expect to earn as a starting salary, other experts also say.
“This time is best used to objectively evaluate each school on the basis of how well they serve the student’s future — as opposed to how much aid they may offer in student loans,” Goodman said.
To determine which schools may be the more affordable options, the U.S. Department of Education’s college scorecard and each school’s net price calculator can help.

Tap private scholarships

In the meantime, students should also be exploring other sources of merit-based aid.
“I recommend being laser focused on applying for scholarships,” said James Lewis, co-founder of the National Society of High School Scholars.
In fact, there are more than 1.7 million private scholarships and fellowships available, often funded by foundations, corporations and other independent organizations, with a total value of more than $7.4 billion, Lewis explained.

Many don’t require a completed FAFSA, Lewis added, and there are free resources that can match you to available scholarships based on your skills and interests.
“There are students who have paid for their entire college education through scholarships, it’s just dependent on the amount of effort and time put in,” Lewis said.
Check with the college or ask your high school counselor about opportunities. You can also search websites like Scholarships.com and College Board.
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President Joe Biden will announce on Monday the details of his revised student loan forgiveness plan.
Although Biden’s Plan B will be narrower than his original effort, tens of millions of borrowers stand to benefit.

President Joe Biden on Feb. 21, 2024, visiting a library in Culver City, California.
Irfan Khan | Los Angeles Times | Getty Images

President Joe Biden will announce on Monday a new, sweeping student loan forgiveness plan, which could benefit tens of millions of Americans.
Biden will share the details of the aid package at an event in Madison, Wisconsin.

The news comes less than a year after the Supreme Court rejected his first attempt to cancel up to $20,000 in student debt per borrower. The conservative justices ruled that that effort was unconstitutional in June.
Although Biden’s Plan B for student loan forgiveness will be narrower than his initial effort, tens of millions of borrowers may still see their balances erased or lowered if the program survives legal challenges this time.
“These historic steps reflect President Biden’s determination that we cannot allow student debt to leave students worse off than before they went to college,” U.S. Undersecretary of Education James Kvaal said in a statement.
Kvaal added that Biden had directed the department “to complete these programs as quickly as possible, and we are going to do just that.”

Who may benefit from new forgiveness plan

Biden’s revised plan targets specific borrowers, including those who:

Are already eligible for debt cancellation under an existing government program but haven’t applied
Have been in repayment for 20 years or longer on their undergraduate loans, or over 25 years on their graduate loans
Attended schools of questionable value
Are experiencing financial hardship

It’s not entirely clear yet how financial hardship will be defined, but it could include those burdened by medical debt or high child care expenses, the Biden administration said.

The president is also expected to discuss a plan to “cancel runaway interest” for millions of borrowers.
Consumer advocates have long criticized the fact that interest rates on federal student loans may exceed 8%, which can make it tough for borrowers who fall behind or are on certain payment plans to reduce their balances. Some end up owing more than they originally borrowed, even after years of repayment.
The Biden administration estimates that, if its new plan is enacted as proposed, borrowers will get up to $20,000 of unpaid interest on their federal student debt forgiven, regardless of their income. Certain low- and middle-income borrowers could have the entire amount of interest that has accrued on their debt since they entered repayment canceled.

A narrower aid package Biden hopes will survive

The Biden administration believes its updated plan will survive legal challenges this time for several reasons.
In addition to the fact that this effort is a more targeted aid program, the Education Dept. is also using a different law — the Higher Education Act — as its legal justification. Biden’s initial forgiveness effort was based on the Heroes Act of 2003.
The HEA was signed into law by President Lyndon B. Johnson in 1965, and allows the education secretary some authority to waive or release borrowers’ education debt.
The Heroes Act was passed in the aftermath of the 9/11 terrorist attacks, and grants the president broad power to revise student loan programs during national emergencies. The Biden administration tried to use this law in its first forgiveness effort because at the time, the country was under a national emergency status from the Covid-19 pandemic.
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However, the conservative justices didn’t buy that argument.
“‘Can the Secretary use his powers to abolish $430 billion in student loans, completely canceling loan balances for 20 million borrowers, as a pandemic winds down to its end?'” Chief Justice John Roberts wrote in the majority opinion for Biden v. Nebraska. “We can’t believe the answer would be yes.”
Lastly, the Biden administration has now turned to the rulemaking process to deliver its relief. The president previously attempted to cancel the debt through executive action.

Student debt cancellation an important issue for voters

Biden likely wants to start forgiving student debt before voters cast their ballots in November.
Almost half of voters in a recent survey, or 48%, say canceling student loan debt is an important issue to them in the 2024 presidential and congressional elections. SocialSphere, a research and consulting firm, polled 3,812 registered voters, including 2,601 Gen Z and millennial respondents, in mid-March.

Forgiving student debt could especially help Biden with young voters, a demographic he’s been struggling with. Around 70% of Gen Z respondents said student debt cancellation was important to them in the election, that same survey found. More than half (53%) of respondents in that generation said they or someone in their household has student debts.
Biden’s plan is estimated to reach more than 30 million borrowers, when combined with his other ongoing debt forgiveness efforts, his administration said.
Mainly by improving current loan relief programs, the Biden administration has now cleared the education debts of 4 million people, totaling $146 billion in aid.
This is breaking news. Please check back for updates. More

A Walmart Supercenter cart sits outside of the store on February 20, 2024, in Hallandale Beach, Florida. 
Joe Raedle | Getty Images

When markets get rocky, dividend-paying stocks can give investors’ portfolios the cushioning they need to ride out volatile times.
Finding the right dividend payers can be difficult, though. Investors can turn to the expertise of Wall Street analysts who can identify stocks with long-term growth potential and the ability to generate the solid cash flows needed to support continued dividends.

Here are three attractive dividend stocks, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.
OneMain Holdings
This week’s first dividend pick is OneMain Holdings (OMF), a financial services company focused on the needs of non-prime customers. OMF stock offers an attractive dividend yield of 8.1%.
Aside from regular dividends, the company also boosts shareholder returns with share repurchases. In the fourth quarter, OneMain repurchased 531,000 shares for $20 million.
Recently, RBC Capital analyst Kenneth Lee updated his model and estimates for OMF stock and raised the price target to $55 from $50 to reflect a more favorable macro outlook. The analyst reiterated a buy rating on the stock, citing the company’s reliable business model and capital generation ability.
Lee said that OMF’s new price target is based on a price-to-tangible book value (2025 estimate) multiple of 2.9x. He thinks that the company warrants a premium multiple as it can deliver a very high return on tangible common equity of more than 40%, with the cost of equity (under normalized conditions) estimated in the range of 9% to 10% and finance receivables expected to grow by mid- to high-single digits.

“In our view, there could be meaningful opportunities for further growth in the non-prime personal loan markets, as the loans only form 16% of total non-prime unsecured credit,” said Lee.
Lee ranks No. 76 among more than 8,700 analysts tracked by TipRanks. His ratings have been profitable 68% of the time, with each delivering an average return of 17%. (See OneMain Holdings Financials on TipRanks)
Walmart
We move to big-box retailer Walmart (WMT), which recently announced about a 9% increase in its annual dividend to 83 cents per share, representing its largest hike in over a decade. The announcement marked the company’s 51st consecutive year of dividend raises. Walmart pays a dividend yield of 1.4%.
Following a meeting with Walmart’s management, Jefferies analyst Corey Tarlowe reiterated a buy rating on WMT stock with a price target of $70. Among the key highlights of the meeting was the analyst’s observation that the company is witnessing some signs of consumer stability. For one, the customer experience score rose 140 basis points in fiscal 2024, which ended Jan. 31.  
Tarlowe also noted increasing private label penetration, enhanced e-commerce shopping experience, better order economics with improved e-commerce margins in fiscal 2024, and an impressive rise in Sam’s Club’s membership levels that is expected to boost the top-line growth.  
Additionally, the analyst is upbeat about the prospects of Walmart’s international segment. He expects its sales to see high-single-digit growth on an annual average basis and projects profits to more than double by fiscal 2028 compared to fiscal 2023.
Commenting on WMT’s advertising business, Tarlowe said, “Last year, WMT’s global advertising business grew 28% to ~$3.4B and we believe that advertising remains a significant opportunity for WMT ahead.”
Tarlowe holds the 537th position among more than 8,700 analysts tracked by TipRanks. His ratings have been profitable 65% of the time, with each delivering an average return of 14.6%. (See Walmart Ownership Structure on TipRanks)
SLB
This week’s third dividend pick is oilfield services company SLB (SLB). Earlier this year, the company announced better-than-anticipated fourth-quarter results and increased its quarterly cash dividend by 10%. SLB stock offers a dividend yield of 2%.
On April 1, Goldman Sachs added SLB to its U.S. Conviction List with a price target of $62, as analyst Neil Mehta thinks that that the company is a leading energy services provider. It is also the preferred stock to gain exposure to international and offshore oil services growth, at an attractive price-to-earnings multiple of 13x (based on 2025 earnings estimates).
Mehta also highlighted SLB’s ability to generate strong free cash flow, which can drive capital returns and growth investments. The analyst expects management to return more than 60% of its free cash flow via share buybacks and dividends.
Furthermore, the analyst thinks that SLB’s digital business is underappreciated. He stated, “We believe SLB is uniquely positioned to expand its digital business given the industry is not as digitized and SLB is the only digital provider in the space that carries competitive moat.”
Mehta ranks No. 176 among more than 8,700 analysts tracked by TipRanks. His ratings have been successful 67% of the time, with each delivering an average return of 12.7%. (See SLB Stock Buybacks on TipRanks) More

YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

A “silver tsunami” of baby boomers is expected to turn age 65 in the next several years.
Reaching that age milestone will prompt big Medicare and Social Security decisions.
Here’s what experts say today’s retirees need to consider when it comes to those programs.

Thomas Barwick

A “silver tsunami” — with a record number of Americans expected to turn age 65 — is here.
Americans who reach that milestone age face high-stakes financial decisions.

Two of the most important choices retirees face — which Medicare health insurance coverage option to choose and when to claim Social Security benefits — come with deadlines.
And making a less-than-ideal selection may cost a retiree over their lifetime.
More than 11,200 baby boomers are expected to turn 65 every day from now through 2027, a phase that has been dubbed “peak 65.”
For many reasons, the generation entering this new life phase doesn’t have it easy.
A so-called three-legged stool of retirement planning — employer pensions, personal savings and Social Security — has largely gone by the wayside as many private-sector employees no longer have traditional pensions that may provide income throughout retirement, according to recent research from the Alliance for Lifetime Income.

Meanwhile, about 40% of households will not be able to maintain their pre-retirement standard of living due to insufficient retirement income, according to the Center for Retirement Research at Boston College.

Choosing Medicare coverage comes with trade-offs

Turning 65 ushers in a key milestone — eligibility for Medicare coverage.
Ideally, beneficiaries should sign up for all parts of Medicare the month before that birthday to avoid coverage gaps, according to a recent retirement report by J.P. Morgan Asset Management.
That coverage may come in the form of “original” Medicare — through Parts A and B, for hospital and medical insurance, as well as optional additional coverage through Part D drug coverage or medigap private insurance plans.
Alternatively, retirees may opt for private Medicare Advantage plans that may include prescription drug coverage and possibly also vision, dental and hearing.
Beneficiaries may revisit their coverage each year during open enrollment periods.
“It can be very confusing for people to sort through all of their options and try to figure out what the differences are across plans, but also what options will work for them over the next year and work well over the longer term as well,” said Gretchen Jacobson, vice president of Medicare at the Commonwealth Fund.
Today’s beneficiaries need to brace themselves for rising health-care costs.

A beneficiary who is 65 in 2024 and covered by original Medicare faces $542 in monthly costs on average, according to J.P. Morgan’s research. By 2054, when that beneficiary is 95, that may go up to $1,484 per month, J.P. Morgan said.
That’s based on an annual 6% health care inflation rate, which J.P. Morgan calls a “prudent” assumption.
In comparison, inflation is up 2.8% annually, based on the latest read of the Federal Reserve’s key inflation gauge, the personal consumption expenditures price index.
The monthly outlay for beneficiaries covered by Medicare Advantage is much lower, according to J.P. Morgan’s estimates. Someone turning 65 in 2024 may spend up to $427 per month for Medicare Advantage premiums and out-of-pocket costs. By 2054, when they are 95, that may climb to up to $990.
Based on the numbers, Medicare Advantage may seem like a better deal. But experts say there are trade-offs to consider.
New enrollees who opt for Medicare Advantage may later want to switch to original Medicare. But it may be difficult getting medigap coverage, depending on the state you’re in and your health status, said Sharon Carson, retirement insights strategist at J.P. Morgan Asset Management.

Having original Medicare also gives you more providers to choose from, as all providers who accept Medicare generally take original Medicare, Carson said. Consequently, retirees who split their time between two states tend to opt for original Medicare.
Because Medicare Advantage enrollees have no supplemental coverage, they should set aside more money for surprise out-of-pocket costs, Carson said.
Moreover, while retirees may opt for Medicare Advantage for the additional coverage those plans may provide, many people don’t actually use benefits such as dental, vision, fitness or over-the-counter medication coverage, recent research by the Commonwealth Fund found.
“They should also consider whether they will actually use those benefits, or if perhaps there’s a different plan that offers benefits they’re more likely to use,” Jacobson said.

Claiming Social Security early means taking a 30% cut

Americans who turn age 65 in 2024 have a Social Security full retirement age of 66 and 10 months.
For those who reach that age next year and thereafter, the full retirement age is 67, per changes enacted decades ago that are being gradually phased in.
The full retirement age is the point when retirees stand to receive 100% of the benefits they’ve earned.
But they may claim as early as age 62, though if they do so they will receive reduced benefits.
For those turning 65 now, that amounts to a benefit cut of around 30%. So if their full retirement age benefit is $1,000 a month, they will receive a $700 monthly check for life if they instead decide to claim at age 62.
Beneficiaries who delay even longer — up to age 70 — stand to receive a benefit increase of 8% per year for every year they delay claiming past full retirement age.

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“The best financial asset you can have is a higher Social Security annuity,” said Teresa Ghilarducci, a labor economist and retirement security expert.
“It’s inflation indexed and guaranteed for life,” she said.
Yet only about 8% of beneficiaries wait until age 70 to claim, according to Ghilarducci, a professor at The New School for Social Research and author of the book “Work, Retire, Repeat: The Uncertainty of Retirement in the New Economy.”
“Everyone should know that you have a penalty if you collect before 70,” Ghilarducci said.
However, most people do not delay benefits that long simply because they can’t, she said.
They may be forced out of work early and need to dip into Social Security to supplement their income when retirement savings fall short. Or they may be working but have taken a job that pays a lot less and make up for those missing wages with their Social Security checks.
Those who can’t delay their Social Security benefits for years can still increase their lifetime benefit income by delaying for just a few months, Ghilarducci said.
“Do whatever you can to bridge to a higher Social Security benefit amount,” Ghilarducci said.

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The tax deadline is approaching and some filers are turning to chatbots powered by artificial intelligence for help with returns.
Nearly 1 in 5 Americans would trust ChatGPT, a popular AI-powered chatbot, to review their income taxes, and 14% have used it, according to a recent survey.
But taxpayers should “proceed with caution” when using the software to file returns, warned April Walker, lead manager for tax practice and ethics at the American Institute of CPAs.

Songsak Rohprasit | Moment | Getty Images

The tax deadline is approaching and some filers are turning to chatbots powered by artificial intelligence for help with returns.
But taxpayers should be wary of generative AI — which uses artificial intelligence to create content — for tax advice, experts say.

Nearly 1 in 5 Americans would trust ChatGPT, a popular AI chatbot from OpenAI, to review their income taxes, and 14% have used it, according to a February survey of roughly 1,000 U.S. adults from CardRates.com.
Another recent survey had similar findings, with 17% saying they have used AI for tax filing and 45% open to it for future use, a Harris Poll found.
While many experts are optimistic about the future of generative AI and taxes, filers should “proceed with caution” when using the software to file returns, said April Walker, lead manager for tax practice and ethics at the American Institute of CPAs.
More from Personal Finance:There’s still time to reduce your tax bill or boost your refund before the deadlineAn ‘often overlooked’ retirement savings option can lower your tax billSome retirement savers can still get a ‘special tax credit,’ IRS says
“We caution users against using ChatGPT for financial advice, as they should seek a professional instead. This activity actually goes against our usage policies,” a spokesperson from OpenAI told CNBC.

AI chatbots ‘aren’t ready for prime time’

This season, taxpayers have several options for AI-powered guidance, including software like ChatGPT, along with chatbots from TurboTax, H&R Block and the IRS.
In 2022, the IRS rolled out voice and chatbots to help answer basic payment and collection notice questions. The agency has since expanded its use of AI-driven technology.
Since the January 2022 rollout, the IRS used chatbots to help more than 13 million taxpayers and helped set up about $151 million in payment agreements, the agency announced in September.

Pranithan Chorruangsak | Istock | Getty Images

Meanwhile, TurboTax has unveiled the generative AI-powered “Intuit Assist” chatbot. The was chatbot was designed to help with software already using AI for “simplified filing” and more accurate returns, according to Karen Nolan, senior communications manager at Intuit TurboTax.
However, “AI is not completing or filing a tax return in TurboTax,” she said. “If a TurboTax filer ever has a question about their tax return, they are only a click away from a live tax expert at all times.”
H&R Block, which has used AI for years, also introduced a generative chatbot with “AI Tax Assist” this season. The tool assists the process for DIY filers and the company has instructions on the best way to use it.
“We also have a team of human testers reviewing questions and feedback daily to identify what to add and improve,” a company spokesperson said.  

Still, AI chatbots “aren’t ready for prime time,” when filing tax returns, according to Subodha Kumar, professor of statistics, operations and data science at the Fox School of Business at Temple University.
Kumar has tested AI chatbots with his students and found the software works for general tax questions, but often provides wrong answers for more specific prompts.
For example, filers may not get accurate answers to tax questions from ChatGPT because its training is “general purpose” rather than tax-specific, he said.
Plus, the data isn’t fully updated, with different knowledge cutoff dates, depending on which version of ChatGPT you’re using. The latest AI model is GPT-4 Turbo, and provides answers with context up to April 2023. That could be an issue with yearly inflation adjustments, tax changes from Congress and the IRS.
However, with models specifically trained for tax, Kumar expects a “big leap” from tax-specific AI chatbots by next season.

Protect yourself from data ‘leakage’

While experts agree that AI chatbots aren’t ready for personalized tax recommendations, there’s still a chance for education.
“I think there are opportunities to use tools like that in a generalized context,” said Michael Prinzo, managing principal of tax at CliftonLarsonAllen. “It could be an effective tool as long as personal information is protected.”
Experts warn there could be data security issues when plugging financial information into ChatGPT or other AI chatbots.
“There could be multiple types of [data] leakage,” explained Spencer Lourens, managing principal of data science, machine learning and artificial intelligence at CliftonLarsonAllen.

However, you could input a general fact pattern of possible income sources and tax breaks without including sensitive personal data and relying on the software for a specific answer.
Of course, you should always verify any information received from AI-powered chatbots by double-checking the details on the IRS website or with a tax professional, added Walker with the American Institute of CPAs.

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Jakub Porzycki | Nurphoto | Getty Images

Company: Twilio (TWLO)

Business: Twilio is a software and communications solutions company. It operates a cloud communications platform that enables developers to build, scale and handle customer engagement within software applications.
Stock Market Value: $10.94B ($60.08 per share)

Activist: Sachem Head Capital Management

Percentage Ownership: 1.81%
Average Cost: n/a
Activist Commentary: Sachem Head was founded in 2013 by Scott Ferguson. He was the first investment professional hired at Pershing Square, where he worked for nine years. Sachem Head has a history of solid value investing, but we believe that the firm really found its activist stride in 2020 with its investment in Olin. Ferguson took a board seat at Olin — the first public company board seat he took in an investment that was not part of a group — and created tremendous value there. More recently, after nominating a majority director slate, Sachem Head settled for three board seats at US Foods. Taking board seats signifies both commitment and contribution, and this philosophy and style is really paying off for Sachem Head.

What’s happening?

Behind the Scenes

Twilio is comprised of two main business units: Communications, which accounts for approximately 90% of revenue, and Segment, which accounts for 10% of revenue. The company is considered to be the industry gold standard for communications infrastructure, providing messaging, voice and email solutions to their customers. Twilio went public in June 2016 with $65 million of sales and a $15 share price. Over the next five years, it was a hyper-growth stock in a market that put a premium on growth names more than any other market possibly in history. It was growing at 50%+ annually through 2021 when it had revenue of $2.8 billion and its stock price closed as high as $443.49. After 2021, the revenue growth started slowing: It’s 8.5% today, and it’s estimated to be 5% to 10% in the coming years. As much as a growth market rewards hyper-growth stocks, it punishes those companies when revenue growth slows. So, with $4.2 billion of revenue today, the company’s stock price is down to $60.08 per share, as of Friday’s close.

But the problem is not solely lack of growth – Twilio is still growing at 8.5% per year. A bigger problem is that despite the level of revenue, even at $4.2 billion, the company has never even come close to being profitable. That is OK for a hyper-growth company. But companies with normal growth must show profitability to attract investors. Part of this problem is the inordinate amount of stock-based compensation Twilio pays: $676 million in 2023 (leading to an operating loss of $877 million). This has partly been the cause of the company’s share count doubling since 2017 from approximately 90 million shares to 180 million shares. But there are several signs that the company has been heading in the right direction even prior to Sachem Head’s appointment to the board. Stock-based compensation has declined in 2023 by 15.4% from $1.2 billion in 2022. Twilio has substantially reduced its headcount, cutting employees by 18% in the past year from 8,156 in 2022 to 5,867 in 2023. Moreover, Twilio’s co-founder and former CEO Jeff Lawson resigned in January 2024 and was replaced by former CFO and COO, Khozema Shipchandler. This is not meant to denigrate Lawson: He is truly a visionary entrepreneur and technologist who created an incredible product and company, but he is not the best person to be CEO at this juncture. What the company needs – and has gotten – is a more financially minded operating executive to continue to rein in expenses and bring it to profitability. Finally, in March 2024, shortly after the CEO transition, Twilio announced an additional $2 billion share repurchase authorization that it is targeting to complete during fiscal year 2024. It also announced the completion of an operational review of its underperforming Segment business in which management committed to right-size costs and replaced the president of that unit.
The primary value creator here will be margin improvement. The company’s nearest publicly traded peer Sinch, a smaller and lower quality business built through M&A of even smaller Twilio competitors, has generated positive operating profits and net income for several years with negligible to no stock-based compensation. Twilio should be able to do even better. While the company has demonstrated good intent and is doing a lot of the right things already, there is still plenty of upside potential on further margin expansion and reduction in stock-based compensation. This is a situation where the activist and management are like-minded, which led to a quick and quiet settlement rather than a public proxy fight. On March 30, Sachem Head received a board seat for Andy J. Stafman, partner at Sachem Head, and agreed to withdraw its notice of shareholder proposals and nomination of candidates for election to the board at the 2024 annual meeting. It is always a great activism engagement when the activist goes on the board to help management execute on a plan they all agree on, as opposed to convincing management that the activist’s plan is better. We believe Stafman will be a valuable asset to Twilio in overseeing its margin expansion and other plans, but we also expect that he will hold management accountable if they fail to do so. Additionally, we think there is a strong possibility that Twilio gets its top-line growth up as well. Market intelligence and data providers Gartner and IDC still project an industry growth rate in the mid- to high-teens. As the market leader, Twilio should be at the high end of the range.
Finally, Sachem Head is not the only activist actively engaged with Twilio. Legion Partners and Anson Funds (which hired Sagar Gupta, former senior analyst and head of technology, media, and telecom  investing at Legion Partners, in October 2023) both have activist campaigns here. Both funds have been calling for the divestiture of Segment. On March 5, Twilio announced that it concluded an operational review of its Segment business and has decided not to divest it. Further, in connection to that development, Twilio appointed Thomas Wyatt as president of Segment, where he formerly served as chief product and strategy officer.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. Twilio is owned in the fund. More

The Powerball jackpot hit $1.3 billion on Friday, the game’s fourth-largest prize, and most Americans still buy tickets in person.
But that could shift as more states approve lottery apps for online purchases.
The winner can choose a lump sum of $608.9 million or an annuity worth $1.3 billion. Both are pretax estimates.
The next Powerball drawing is Saturday at 10:59 p.m. ET.

Justin Sullivan | Getty

The growth of ‘lottery couriers’

U.S. lottery sales exceeded $113.3 billion in 2023, according to the North American Association of State and Provincial Lotteries.
With varying state and provincial regulations, players have different purchase options, such as in-person or online sales, depending on where they live.

One option is lottery-courier services, which accept orders and buy lottery tickets on a customer’s behalf.
“Lottery couriers are still relatively new,” said Mike Silveira, chief of staff for Jackpot.com, which provides digital lottery-courier services. “This has to be one of the last consumer-facing industries to shift online.”

This has to be one of the last consumer-facing industries to shift online.

Mike Silveira
Chief of staff for Jackpot.com

Players can use Jackpot.com to order state lottery tickets via mobile phone, tablet or computer. The company buys the ticket on behalf of customers and scans an image of the ticket directly into the app.
As of April 5, Jackpot.com operated in five states: Arkansas, Ohio, Massachusetts, New York and Texas. But the company expects to see more state approvals, Silveira said.
DraftKings in February acquired Jackpocket, another lottery app, which operates in more than a dozen states.
While ticket purchases now have digital options from state lotteries and third-party companies, most players still buy lottery tickets in person, according to Drew Svitko, executive director of the Pennsylvania Lottery.
He said the state has roughly $5 billion of in-person lottery sales yearly across 10,000 retailers and about $1 billion in online sales.
However, the Pennsylvania Lottery’s app has boosted brick-and-mortar sales by “reaching a new audience,” Svitko said.

The latest Powerball jackpot comes roughly one week after a single ticket purchased in New Jersey won Mega Millions’ fifth-largest grand prize of $1.128 billion.
That grand prize is back down to $67 million and the chances of winning are roughly 1 in 302 million.

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The U.S. economy added 303,000 jobs in March, the largest gain in more than a year, the Bureau of Labor Statistics said in its monthly jobs report.
The unemployment rate also edged lower, to 3.8%.
It’s a bit harder for workers to find jobs relative to the “great resignation” era a few years ago.
But overall, the labor market looks healthy and sustainable and is giving inflation-adjusted raises to the average worker, economists said.

Now Hiring sign in a supermarket window in Queens, New York. 
Lindsey Nicholson/UCG/Universal Images Group via Getty Images

The U.S. job market continues to chug ahead without signs of overheating — a good sign for workers and the U.S. economy, according to economists.
While the market has cooled from its breakneck pace of the “great resignation” era, employers are adding ample jobs to their payrolls, unemployment hovers near historical lows, and worker buying power (so-called “real” wage growth) is steadily rising, economists said.

The labor market has been resilient despite economic headwinds like higher interest rates.

“This is still a labor market that’s very attractive, especially historically speaking, for workers,” said Julia Pollak, chief economist at ZipRecruiter.
“There’s still strong, broad-based job growth and real wage growth has been restored,” Pollak said. “I think that’s very, very good news.”

The labor market is in a ‘sweet spot’

Employers added 303,000 jobs to payrolls in March, the U.S. Bureau of Labor Statistics reported Friday. That’s the largest monthly gain since January 2023.
Job growth in the first three months of 2024 — 274,000, on average — beats the 2019 pre-pandemic average by more than 100,000.

The U.S. unemployment rate declined to 3.8% in March, from 3.9% in February. Unemployment has been below 4% — a historically low mark — for more than two years.
“That’s an exceptionally long period of such tight labor markets,” Pollak said.
Those conditions are pushing employers to make “very attractive” offers to new hires and proactively recruit prospective candidates, she said.

The layoff rate has also been near a historic low for more than two years, as employers hang on to their current workforce.
Additionally, more workers joined the labor force in March, boosting the labor force participation rate at a time when job openings remain historically high. That dynamic suggests a healthy, sustainable equilibrium between the supply and demand of labor, economists said.
“The labor market is settling into a sweet spot,” said Nick Bunker, economic research director for North America at job site Indeed.
It’s powering ahead and “there’s open road ahead of it as well,” he said.

The job market is cooler — but perhaps more desirable

Of course, the job market isn’t as a hot as it was in 2021 and 2022, after the U.S. economy awoke from a Covid-induced slumber.
At that time, workers were quitting their jobs at the fastest rate in history — a trend dubbed the great resignation — amid ample job opportunity and the relative ease of finding a higher-paying gig.
Workers saw the “red carpet rolled out for them,” Pollak said.
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But those conditions helped stoke high inflation, which touched a four-decade high in 2022. Fast-rising prices for consumer goods meant workers’ rapidly growing wages couldn’t keep pace with price tags at the store.
The average worker’s buying power fell for two years as a result.
Wage growth has declined, to an annual 4.1% pace in March from a pandemic-era peak of 5.9% in March 2022, on average. But inflation has fallen more than that, which translates to an increase in household buying power since May 2023.
Real hourly earnings — wages after accounting for inflation — grew by 1.1% in February 2024 versus a year earlier.
The current labor market is in many ways more desirable than the red-hot one a few years ago, which wasn’t sustainable, economists said.
While workers have lost some leverage, it’s still “relatively easy” to find a job and workers are now getting those inflation-adjusted raises, Bunker said.
“There are aspects of the 2021 and 2022 labor market people want back, but aspects of the 2024 labor market people prefer more,” Bunker said.
Plus, the Federal Reserve raised borrowing costs to their highest level in over two decades to combat pandemic-era inflation. That pushed interest rates for mortgages, credit cards and other consumer debt sky high.
Fed officials see cooling wage growth is a positive relative to the inflation fight, and may provide comfort they need to start reducing borrowing costs this year, economists said.

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