“Don’t trust Facebook with your data? Give them your money, instead!”
Hey there carnivores,
Markets were mixed on Monday, but the S&P closed just short of an all-time high.
Today we’re talking Facebook’s expansion into finance.
Jeff & Jason
Bank on it
Facebook announced a new group to handle all of its financial and commerce dealings. The team, so creatively named Facebook Financial, will be helmed by David Marcus.
Marcus has a history in finance, spending time as an exec at PayPal before joining the Evil Empire (Facebook) back in 2014. He currently manages Facebook’s cryptocurrency project, Libra. Before that, Marcus was running the show over at Facebook Messenger. So he knows a thing or two about managing products that everybody f*cking hates.
Welcome to the show
Joining Marcus in growing Facebook Financial is another former PayPal exec, Stephane Kasriel. Kasriel will try to do the impossible (get people to trust Zuck with their money), and help compete with his former employer. Et tu, Stephane?
So, what is Facebook Financial?
The team, called F2 internally, will be in charge of managing all payment and finance based projects within Facebook’s larger portfolio. Including, but not limited to, Libra and Facebook Pay.
As a matter of fact, David Marcus will still be in charge of the Libra project, in addition to the Novi project. Novi, of course, is the wallet that holds all your Facebook Libra cryptocurrency. Real missed opportunity not calling them Zuck Bucks.
Facebook shares fell 1.5% on the day… probably after everyone realized Zuck is still trying to make Libra work…
The bottom line…
If its track record is any indication, Facebook also will likely be picking Kasriel’s brain on the inner workings of PayPal. Just last week, Facebook grabbed the functionality of the soon to be either defunct, or Microsoft-owned, TikTok, and slapped it into its Instagram platform. Before that, Zuck stole Snap’s idea for ephemeral messaging and built out its stories feature to all but copy Snap. Let’s just say, original thinking clearly isn’t easy for a guy with a supercomputer for a brain.
☑️ The game done changed. Yellow cab drivers rejoice!
A California judge granted a preliminary injunction yesterday that will force Uber and Lyft to consider their drivers employees rather than independent contractors.
California Attorney General Xavier Becerra launched the suit in May in hopes of defending the drivers’ rights as workers. Uber and Lyft argue that the drivers are in fact contractors because they have the flexibility to work on whatever schedule they want. Not providing healthcare benefits seems like a fair trade-off for working a graveyard shift…
Of course, both companies will appeal the injunction, which is set to commence in 10 days. Neither of the ride-sharing upstarts has made it to profitability. If they can’t get this injunction overturned in California, it may set a precedent for other states. Maybe Dara might want to revise that profitability estimate one more time.
☑️ Feeling lucky. IAC/InterActive is putting its money on the pass line. The digital media company announced it is paying $1B for a 12% stake in MGM Resorts. IAC is looking to help MGM expand its online gaming capabilities.
IAC was flush with cash after its recent sale of Match.com left it with $3.9B cash on hand and no debt. As the pandemic has kept people out of casinos, MGM welcomes the high roller. But did they comp the buffet?
MGM’s stock was up 13% on the news, while IAC’s dropped 1.37% on the day.
☑️ Prime the engines. TSA said it processed more people through security on Sunday than it has since mid-March. Roughly 800k people had to take off their belts and jackets in the US yesterday, a welcome sign for airlines.
Traffic is still down 70% from the same time last year, but investors don’t seem to mind. Airline stocks surged yesterday, with United leading the charge, up 9% on the day.
Discussions of another $25B in bailout funds certainly didn’t hurt. But, until the demand for flights starts to get back to normal, it’s going to be a turbulent ride.
☑️ No refunds. McDonald’s is lawyering up.
But this time it doesn’t have Uncle Jerry in its crosshairs. So who’s the defendant? Former CEO Steve Easterbrook who was fired by the Mickey D’s board after he lied about a consensual relationship he had with an employee…no, it wasn’t Grimace.
Now, the maker of the Big Mac is suing Easterbrook to get back compensation it paid him during his tenure. The company claims new information came to light in July, and that its former CEO lied and destroyed evidence regarding three other relationships he had in addition to the one he was caught for. Fool me once…but four times?
The ultimate no-no was that Easterbrook lied during the internal investigation and at one time, approved a six-figure stock grant for an employee he was allegedly giving the special sauce to, if you catch my drift.It is unclear how much McDonald’s is trying to get back but Easterbrook’s payout in 2019 was close to $42M.