Can Amazon pay off our student loans, too?
September 10, 2021 by The Q.ai Team
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- Recap of this week’s top headlines
- Our thoughts on the Elizabeth Holmes trial
- This week’s most surprising discoveries
Weekly Wrap Up
Judge orders Apple to loosen policy for in-app purchasing
Apple cannot prohibit developers from offering a way to pay for things beyond Apple’s marketplace. The current App Store payment model has Apple receiving a 30% cut of all revenue from in-app payments. The permanent injunction will take effect on December 9th. Epic Games was also found to have violated the terms of its contract when it implemented an alternative way to pay and was ordered to pay 30% of all revenue collected ($3.5 million) to Apple.
Amazon is paying college tuition for over 750,000 employees
Amazon is looking to solve two problems: attracting new employees and reducing employee turnover. The company hopes to accomplish this by paying college tuition for tens of thousands of new employees they have yet to hire. Amazon has already raised its minimum wage to $15 an hour but has not attracted enough to hire from that move alone.
The SEC investigates Coinbase‘s new lending program
Coinbase plans to roll out Coinbase Lend, a program that allows customers to earn interest by lending “stablecoins” to other traders. The SEC believes that this program is a security and that it needs to follow investor protection laws. Coinbase CEO Brian Armstrong calls this investigation “sketchy.” He obviously disagrees with the SEC’s position.
PayPal is acquiring payment company Paidy for $2.7 billion
In an all cash deal, PayPal is acquiring Paidy, a Japanese buy-now-pay-later unicorn startup that allows shoppers to pay off purchases in installments. Japan is the third largest eCommerce marketplace in the world, so this move will give PayPal direct access to Asia’s buy-now-pay-later sector. This acquisition reminds us of AfterPay, which Square recently acquired in August for $29 billion.
Walmart will stop offering quarterly bonuses
Walmart’s quarterly bonus program, “MyShare,” is being phased out as the company shifts its focus to higher wages. This decision is in response to employee feedback, which indicated that the most important earnings are weekly pay. Additionally, Walmart raised its starting wage from $11 an hour to $12, affecting 525,000 workers.
Who is Elizabeth Holmes, and why is she on trial?
Elizabeth Holmes is the founder of Theranos, a privately held corporation oft-touted as a breakthrough health-tech company. She was just 19 years old when she started working on the company in 2003, positioning herself as the youngest self-made female billionaire in the world.
Theranos raised more than $700 million and, at its peak, was valued at $9 billion. However, medical experts questioned the validity of the tests which led to an FDA investigation in 2015.
When regulatory bodies began investigating Theranos and the Wall Street Journal published a piece about it in 2015, the company went south. Theranos was accused of providing patients with questionable lab results. And Holmes was accused of making false claims about the company’s credibility to secure investing dollars. Walgreens eventually sued, seeking $140 million in damages. Theranos shut down lab operations, and Holmes stepped down as CEO in June 2018 the same day the Department of Justice charged her with 10 counts of wire fraud and two counts of conspiracy.
CREDIT: FINANCIAL TIMES
What we think about the trial
In theory. What could have happened if Theranos’ partnerships with major healthcare companies like Safeway, Pfizer, Walgreens were successful may have been detrimental to the health of the market. After all, if major investors dump all of their money in a sinking ship — even a big ole’ shiny ship — this allocates fewer dollars to successful securities that could actually take off. Never mind that investing in health-tech innovation that’s not actually happening could stunt the growth of the industry in and of itself.
In reality. With Theranos in shambles and Holmes facing decades of behind-bars time, we dive deeper into investor relationships. Investors need to take a closer look at how they spend their dollars, analyze the hard data and possible illusory truths, and further weigh the risks of investing in companies against the risks of not investing in them.
The struggle. There are always risks with investing. After all, investing in innovation requires trust in the journey; without it, emerging technologies would never emerge. This is especially true in the health-tech space. “In some of the harder tech spaces like health care and bio sciences, it would be impossible for any investor to apply enough due diligence to figure out whether the core science [behind a project], which might have taken a PhD or a team of postdocs literally decades to come up with, [is accurate]; there’s a bit more trust involved,” Steve Vassallo, a general partner at Foundation Capital, told Time. “We know these CEOs don’t have audited financials when they’re pitching us, but we also don’t think they’re completely fudging them. So if you’re intending to be dishonest or mislead, you can confuse any investor no matter how hard they’re working.”
The bottom line. While the world awaits the outcome of Holmes’ trial, investors across the globe should be gearing up to dig deeper.
Facebook is making camera glasses literally no one has asked for. They’re calling these glasses, which could also have facial recognition technology built in, Ray-Ban Stories. Yes, Ray-Ban is part of this project.
Brandy Melville is apparently a nightmare to work for. A Business Insider report exposed the company’s toxic culture, revealing that the CEO refuses to hire women who are neither thin nor white.
U.S. graduates hold $1.73 trillion in student loan debt. This record-breaking debt is a 3% increase from Q2 of 2020. West Virginia and New Hampshire are the two states impacted the hardest by student debt. California and Utah are impacted the least.
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