—— Stanford to Return FTX Donations; FedEx Unveils $6B Cost Cuts; Goldman to Sell GreenSky; Secondary PE Funds Surge; WhatsApp Adds Payment Feature; Starbucks’ Slow Orders Cost Billions; Bank of America Raises Minimum Wage
1. Stanford to Return FTX Donations
According to an email statement from a Stanford University spokesperson, the university will return the entirety of the funds donated by the now-bankrupt crypto firm FTX, and is in talks with FTX creditors’ attorneys about the repayment.
The Stanford spokesperson revealed that the university received $5.5 million in donations from the FTX Foundation and related FTX entities.
FTX founder Sam Bankman-Fried’s parents, Joseph Bankman and Barbara Fried, are both legal scholars and longtime professors at Stanford Law School, which made their ties to the company particularly sensitive.
Sam’s parents have been accused of leveraging their privileged positions for personal financial gain.
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2. FedEx Unveils $6 Billion Cost Cuts
Recently, FedEx announced a $6 billion cost-cutting plan that will streamline operations and reduce headcount.
Meanwhile, rival UPS was forced to compromise after employee strikes, agreeing to $30 billion in additional wages and benefits over the next five years.
Since FedEx is in a stronger position than UPS, its stock has rebounded 75% from last year’s low.
TD Cowen senior analyst Helane Becker said now is the perfect time for FedEx to slash costs and boost margins—if successful, the stock has room to climb further.
Year-to-date, UPS stock is down 9.1%, while FedEx has gained 44%.
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3. Goldman to Sell GreenSky
Sources say Goldman Sachs is in late-stage talks with a consortium led by Sixth Street Partners to sell its GreenSky division.
GreenSky is a point-of-sale lending platform that Goldman acquired two years ago in an effort to grow its consumer finance business.
However, CEO David Solomon admitted the move was too aggressive.
Goldman reported a $504 million goodwill impairment in Q2 to prepare for the sale.
The buying consortium includes KKR and PIMCO, and the deal could be valued at $500 million.
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4. Secondary Private Equity Funds Surge
In recent years, secondary private equity investment strategies have gained popularity. In response, Goldman Sachs Asset Management has raised $14 billion for its largest flagship secondary fund, which will be used to buy stakes in other private equity portfolio companies.
Over the past year, many investors have realized their alternative asset allocations were too high, and primary fundraising has significantly slowed.
Still, top-tier secondary funds that offer early liquidity to institutional investors have continued attracting capital.
French PE firm Ardian and Blackstone’s secondary funds each raised more than $20 billion in the past year.
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5. WhatsApp Adds Payment Feature
Meta-owned messaging app WhatsApp announced that users in India will soon be able to pay for goods and services using credit and debit cards through the app. China’s WeChat has long offered this feature.
WhatsApp said its new payment feature, WhatsApp Pay, will help attract more business users and generate revenue, and will not charge merchants fees on transactions.
India was chosen as the pilot market because it recently surpassed China as the world’s most populous country.
The feature offers users a convenient payment method while helping businesses boost sales.
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6. Starbucks’ Slow Orders Cost Billions
According to a new survey by Technomic, more than one-third of Starbucks customers wait over 5 minutes to receive their coffee after placing an order.
The increasing wait time is reportedly due to the vast number of drink customization options. A Starbucks latte can be made in up to 383 billion different ways, significantly complicating and delaying preparation.
While customized drinks bring Starbucks $1 billion in annual revenue, they also substantially slow down service.
With over 37,200 stores globally, second only to McDonald’s, serving just five more customers per day at each store could mean an additional $900 million annually.
Customization boosts revenue but causes customer loss due to long wait times.
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7. Bank of America Raises Minimum Wage
Bank of America Corp. announced that starting next month, it will raise its minimum hourly wage by $1 to $23, equivalent to an annual salary of $48,000 for full-time employees.
Chief Human Resources Officer Sheri Bronstein said the boost in pay and benefits will help attract talent and support employees, customers, and communities long-term.
The bank aims to raise its minimum hourly wage to $25 by 2025, up from $14 in 2010.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.