Category: Finance

How to prevent the next GameStop disaster

Posted onAuthoradmin

The mind-numbing inanity of last week’s GameStop hearing on Capitol Hill was just as predictable as the worthless result. Of course members of both parties wanted in on the media frenzy surrounding Robinhood and WallStreetBets, the Reddit forum where thousands of amateur investors mounted a historic campaign to pump (and dump) the stock of a left-for-dead video game retailer. Talking heads on CNBC were alarmed, and so the House Financial Services Committee ordered hearings, subpoenaed witnesses, and played for the cameras at every turn. By the end of last Thursday’s spectacle, the consensus was clear: We learned absolutely nothing. Not surprisingly, Congress focused on the wrong culprit. Yes, Robinhood’s marketing as “the platform for the average investor” ended up conflicting with their treatment of the average investor once they had to stop taking GameStop trades, making them look like greedy hypocrites. (Fast Company has a brief explainer here .) And yes, the use of Reddit and Twitter to drive market forces and propel certain stocks is new and a little scary. But Robinhood, Reddit, and Twitter were all using their platforms in the exact ways they were intended: to spread and drive information and access. If there’s a villain in the GameStop saga, it’s the federal regulators—in this case, the Securities and Exchange Commission (SEC)—who failed to notice that the world was changing and didn’t bother to update the rules accordingly. By definition, regulation will always lag behind innovation. Regulators can’t know what rules are needed until an entrepreneur first thinks of the new idea, turns it into actual technology, turns that technology into a business, and then starts selling its product or service. But once that happens, it’s not necessary to wait for a debacle before updating the rules. In the case of GameStop, the two-day settlement requirement meant that Robinhood couldn’t keep taking trades absent raising more capital. That two-day waiting period made sense in a previous era—one before blockchain and the cloud. But that waiting period still exists because of inertia and complexity—and, historically, because it produced extra revenue for brokerages—not because it’s technologically necessary. Real-time settlement is not only feasible, it would have prevented all of the harms caused to Robinhood’s investors. The SEC knows that, but it didn’t act on it. That was a mistake. GameStop is but one example. Take something more significant like self-driving cars and trucks Read More …

Facebook has banned Australian news, but there’s a workaround

Posted onAuthoradmin

Facebook users are currently caught in a fight between the social network and the Australian government over the sharing of news on tech platforms. On Wednesday, Facebook banned users in Australia from sharing links to any local or international news stories, blocked Australian news publishers from sharing their own stories, and prevented users worldwide from sharing news articles published in Australia. The drastic move is a response to the Australian government’s Media Bargaining code, which tries to counter tech giants’ decimation of the news business by making Google and Facebook share some revenue with local news publishers. [Screenshot: Jared Newman] The move by Facebook has sparked an international backlash , with one MP in the United Kingdom calling it “one of the most idiotic but also deeply disturbing corporate moves of our lifetimes.” Amnesty International Australia campaigner Tim O’Connor said that allowing one company to dominate the information ecosystem “threatens human rights,” and criticized Facebook for blocking access to community groups and emergency information. (Facebook itself acknowledged that some Pages were “ inadvertently impacted .”) It’s unlikely that the news ban will last forever, at least in its current form. Australia’s treasurer, Josh Frydenberg, has said that he continues to have constructive discussions with Facebook CEO Mark Zuckerberg, and Google has already made its own made its own deal with News Corp, agreeing to pay the publisher for news in United States, United Kingdom, and Australia. Deals between Google and other publishers are expected to follow , which could put pressure on Facebook to be less belligerent in its response. But in the meantime, Facebook users are stuck without a way to share reliable information on the world’s largest social media platform. That’s not ideal, given how easily misinformation can flourish on Facebook instead. Fortunately, there is a workaround. Read More …

Shareholders sue Pinterest over pattern of race and gender discrimination

Posted onAuthoradmin

Shareholders of Pinterest are suing members of the company’s board of directors and several top executives for allegedly ignoring or deliberately enabling discrimination against women and people of color. The suit claims that the board of directors, including Pinterest cofounders Ben Silbermann and Evan Sharp, either actively perpetrated or knowingly ignored high-profile allegations of discrimination and retaliation against Pinterest’s former COO Francoise Brougher and two Black female executives, Ifeoma Ozoma and Aerica Shimizu Banks. Pinterest did not respond to a request for comment. The suit singles out Pinterest board chair, cofounder, and CEO Silbermann in particular for creating a boys’ club at the top that systematically ignored claims of pay disparity and an inability to advance for women and people of color. In addition, it alleges that even when employees told Silbermann about Pinterest’s problems, he did nothing to change the situation. “He repeatedly placed himself before the Company, surrounding himself with yes-men and marginalizing women who dared to challenge Pinterest’s White, male leadership clique,” the suit reads. In the summer of 2020, Ozoma and Banks first shared their stories of being underpaid, underappreciated, and misleveled on Twitter. The two came forward after Pinterest issued a statement in the wake of the George Floyd protests and said that they wanted to expose the company’s hypocrisy for saying Black lives matter publicly, while mistreating its Black employees privately. (While Pinterest first denied Ozoma and Banks’s allegations, the company has since done an about-face and hired a law firm to assess its internal practices.) “I spoke up so people would know and I want accountability but don’t expect it in a white supremacist system,” Ozoma says. Their story prompted other former and current Pinterest employees to speak out , including Brougher, who filed a gender discrimination lawsuit two months later. Her suit lays out how she was given a different stock compensation vesting schedule than her peers, dramatically affecting her compensation. After she raised concerns, she says, she was cut out of meetings, including the company’s IPO roadshow—even though she was the company’s second-in-command and the only executive who’d participated in an IPO before. She was later fired. Days after Brougher went public, Pinterest employees staged a virtual walkout in support. Pinterest has not commented on the active litigation. This new lawsuit claims that the board’s and executives’ actions have resulted in a breach of fiduciary duty, waste of corporate assets, and abuse of control Read More …

With its new checking account, Credit Karma wants to get into your wallet

Posted onAuthoradmin

Credit Karma, the company that turned the promise of a free credit score into a business worth over $7 billion, is joining the ranks of “neobank” startups offering a checking account. The product will be folded into Credit Karma Money, which launched last year as a savings account available to the company’s 100 million members. Digital banking has been gaining steam for the last several years, with the pandemic only accelerating consumers’ interest in the options that neobanks are providing. In the U.S. and Europe, there are now over two dozen neobanks, which have collectively raised over $6 billion in venture funding. “We think this is a product for people who have been left behind in financial services,” Credit Karma cofounder and CEO Kenneth Lin says of his company’s variation on the theme. Credit Karma Money Checking will not charge fees and will include automated features designed to help users better manage their money, such as bill payment date optimization. Over time, data from Checking will also help the company better present its members with targeted advertisements for loans, credit cards, and more. “Historically, Credit Karma has been focused on helping people optimize their credit, optimize their borrowing,” says Lin. “Now we’re moving to the other side of that spectrum. We want to help you save for your future, and this is the connector to making all of the pieces work.” [Image: courtesy of Credit Karma] Credit Karma is entering an increasingly crowded market for digital-first checking and savings accounts. Read More …

How this program turns ordinary teens into tech superheroes

Posted onAuthoradmin

In 2016, Ananya Chadha was just a regular 14-year-old girl struggling to fit in at her high school in Toronto. She often had sci-fi-inspired fantasies about building futuristic technologies like jet-pack shoes, going so far as to look into where she could buy parts. Then one day two brothers, Navid and Nadeem Nathoo, came to her school and described a new type of educational program they started called The Knowledge Society , or TKS. “They talked about essentially creating the next Elon Musk,” recalls Chadha, now 18 years old. “When they talked about taking crazy ideas and unconventional paths and making it real, I was like ‘Wow, I need this.’” It would sound like a rip-off of a classic superhero story if it weren’t completely true: ordinary teenagers being recruited into an elite program designed to give them the power to do extraordinary things, and maybe even save the world. While many programs like Code for America and the Flatiron School focus on teaching entrepreneurship or tech skills to high school students, TKS, which was founded in 2016, is unique for giving students both the hard skills they need to build next-generation solutions to some of the world’s biggest problems as well as the soft skills they need to communicate and create them. Ananya Chadha at TKShowcase [Photo: courtesy of TKS] Soon after enrolling in the program, Chadha was working in a gene-editing lab, where she discovered a problem with the homogeny of samples used in data sets. That inspired her to develop a blockchain-based application that compensates users for uploading anonymous genetic information to help diversify the data pool. After the app, G-gnome, was acquired by a blockchain startup, she switched her focus to computer-human interfaces. In 2018 Chadha secured a sponsorship from Microsoft to build a remote control car that she can control by meditating . Today she interns for IBM. “What I found unique was their ability to connect advances in bleeding-edge technologies to tackle hard problems our society faces on daily basis,” says Piotr Mierzejewski, the director of Db2  deployment for IBM Data and AI. “These young minds don’t seem to be discouraged by how hard and complex problems they are trying to solve are; they simply face the challenge to find solutions.” In recent months Chadha has presented her work at some of the biggest technology conferences in the world, she was named to the 2019 class of Canada’s Developer 30-Under-30 , and she won First Prize in engineering.com’s Impossible Science Challenge. Chadha, however, is just one of almost 400 students who have achieved incredible feats after enrolling in TKS. Building the next Elon Musk After the Nathoos spent three years developing the program in Toronto and Waterloo, TKS is expanding to New York, Boston, Las Vegas, and Ottawa in the fall— enrolling 80 students in each new chapter—and offering a new program in Toronto for students as young as nine. Navid and Nadeem-Natho [Photo: courtesy of TKS] “The whole reason why we’re scaling is because I strongly believe that we are not short on human potential,” says Navid Nathoo. Read More …