1 July 2024 – The Fund Society

Collapsed FTX-linked lender Silvergate pays $63mn to settle probes

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Revolut CEO confident on UK bank license approval as fintech firm hits record $545 million profit

Nikolay Storonsky, Revolut’s CEO and co-founder, said the company is feeling confident about securing its British bank license “soon”, after overcoming some key hurdles. Revolut first applied for a U.K. banking license in 2021, but it has faced lengthy delays. Revolut released annual accounts Tuesday showing its full-year pre-tax profit rose to $545 million in 2023; the company cited strong user growth and revenue diversification. Nikolay Storonsky, founder and CEO of Revolut. Harry Murphy | Sportsfile for Web Summit via Getty Images

LONDON — The boss of British financial technology giant Revolut told CNBC he is optimistic about the company’s chances of being granted a U.K. banking license, as a jump in users saw the firm report record full-year pre-tax profits.

In an exclusive interview with CNBC, Nikolay Storonsky, Revolut’s CEO and co-founder, said that the company is feeling confident about securing its British bank license, after overcoming some key hurdles in its more than three-year-long journey toward gaining approval from regulators.

“Hopefully, sooner or later, we’ll get it,” Storonsky told CNBC via video call. Regulators are “still working on it,” he added, but so far haven’t raised any outstanding concerns with the fintech.

Storonsky noted that Revolut’s huge size has meant that it’s taken longer for the company to get its banking license approved than would have been the case for smaller companies. Several small financial institutions have been able to win approval for a banking license with few customers, he added.

“U.K. banking licenses are being approved for smaller companies,” Storonsky said. “They usually approve someone twice every year,” and they typically tend to be smaller institutions. “Of course, we are very large, so it takes extra time.”

Revolut is a licensed electronic money institution, or EMI, in the U.K. But it can’t yet offer lending products such as credit cards, personal loans, or mortgages. A bank license would enable it to offer loans in the U.K. The firm has faced lengthy delays to its application, which it filed in 2021.

One key issue the company faced was with its share structure being inconsistent with the rulebook of the Prudential Regulation Authority, which is the regulatory body for the financial services industry that sits under the Bank of England.

Revolut has multiple classes of shares and some of those share classes previously had preferential

CNBC

US stocks close higher as Treasury yields jump on US election odds

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Exclusive to VC+ in July: Market Insights, Sports Revenue, Energy Trends and More

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July features exclusive special dispatches packed with visuals covering world-defining trends:

Markets This Month: July 2024 Edition The Business of Sports Report Deep Dive: 2024 Statistical Review of World Energy In Visuals: The Rise and Fall of Civilizations The Trendline: Weekly Newsletter

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Report Deep Dive: Key Takeaways From the Statistical Review of World Energy

The Energy Institute’s Statistical Review of World Energy covers global energy trends including record fossil fuel use, renewable energy growth, and rising greenhouse gas emissions in 2023.

To save you time from reading 76 pages, we’ll provide the most important findings from this flagship report in a visual breakdown.

>>Coming Thursday, July 18th, 2024 (Join VC+ to access)

What Can Ancient Civilizations Teach Us Today?

Looking back at the rise and fall of ancient civilizations can teach us valuable lessons about the fundamentals of economics and the complexities of international diplomacy.

This dispatch features historical graphics from Visual Capitalist and trusted sources, offering insights into pivotal moments that shaped history and continue to influence global landscapes today.

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Your Guide to Key Market Insights

With markets closed on July 4th, why not use the time to catch up on the latest trends in the financial landscape with our regular feature, Markets This Month?

In June, we covered the most held stocks by hedge funds and the portfolio of super investors (read the free sample).

This month, we look at the S&P 500—including the companies driving the index’s returns and which sectors have the most foreign sales exposure. The dispatch will also feature our usual calendar of key earnings and data releases, which have the potential to move the markets.

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The Numbers Behind Summer’s Biggest Sporting Events

As U.S. sports leagues (besides the MLB) take their summer break, all eyes are on Euros 2024 and the Paris Olympics.

This dispatch dives into the finances of major U.S. sports leagues, along with the numbers behind this summer’s biggest sporting events featuring:

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Citadel’s Ken Griffin says he’s not convinced that AI will replace human jobs in the near future

Ken Griffin speaks to Citadel and Citadel Securities interns during a discussion moderated by Citadel software engineer, and former intern, Bharath Jaladi. Courtesy: Citadel

Ken Griffin, founder and CEO of Citadel, said he remains skeptical that artificial intelligence could soon make human jobs obsolete as he sees flaws in machine learning models applied in certain scenarios.

“We are at what is widely viewed as a real inflection point in the evolution of technology, with the rise of large language models. Some are convinced that within three years almost everything we do as humans will be done in one form or another by LLMs and other AI tools,” Griffin said Friday during an event for Citadel’s new class of interns in New York. “For a number of reasons, I am not convinced that these models will achieve that type of breakthrough in the near future.”

The rapid rise of AI has had the world pondering its far-reaching impact on society, including technology-induced job cuts. Elon Musk, CEO of Tesla, is among many who have repeatedly warned of the threats that AI poses to humanity. He has called AI “more dangerous” than nuclear weapons, saying there will come a point where “no job is needed.”

Griffin, whose hedge fund and electronic market maker have been at the forefront of automation, said machine-learning tools do have their limits when it comes to adapting to changes.

“Machine learning models do not do well in a world where regimes shift. Self-driving cars don’t work very well in the North due to snow. When the terrain changes, they have no idea what to do,” Griffin said. “Machine learning models do much better when there’s consistency.”

Still, the billionaire investor thinks the power of advanced technology can’t be dismissed in the long term, and he even sees cancer being eradicated one day because of it.

“The rise of computing power is allowing us to solve all kinds of problems that were just simply not solvable five, 10, 15 years ago,” Griffin said. “This is going to radically transform healthcare. We will end cancer as you know it in your lifetime.”

Citadel has long placed a great emphasis on hiring, not hesitant about putting responsibility into the hands of young employees and even interns, the CEO said.

The firm’s internship program has become one of the most competitive in the country. More than 85,000 students

CNBC

The Top 10 Highest Paid CEOs in America

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The Top 10 Highest Paid CEOs in America

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The median pay for S&P 500 CEOs soared to an all-time high of $15.7 million in 2023, as a strong stock market boosted executive compensation.

Some of the highest paid CEOs in America earned nine-figure pay packages, with the vast majority of CEO compensation tied to stock awards. Overall, executives in the index earned on average 196 times more than the median S&P 500 employee, up from 185 in 2022.

This graphic shows the top 10 highest paid CEOs of S&P 500 companies, based on analysis from The Wall Street Journal and MyLogIQ.

The Highest-Earning S&P 500 CEOs in 2023

Here are the S&P 500 chief executives who received the highest compensation packages last year:

RankCEOCompanyTotal PayCash PaySector 1Hock TanBroadcom $161.8M$1.2MTechnology 2Nikesh AroraPalo Alto Networks $151.4M$2.3MTechnology 3Stephen SchwarzmanBlackstone $119.8M$0.4MFinancial
Services 4Christopher WinfreyCharter
Communications $89.1M$5.2MCommunication
Services 5Will LansingFair Isaac$66.4M$2.0MTechnology 6Tim CookApple$63.2M$13.7MTechnology 7Hamid MoghadamPrologis$50.9M$1.9MReal Estate 8Theodore SarandosNetflix$49.8M$19.5MCommunication
Services 9David ZaslavWarner Bros.
Discovery$49.7M$25.0MCommunication
Services 10Glenn FogelBooking Holdings$46.7M$5.8MConsumer Cyclical

Total pay includes equity awards and cash pay.

Hock Tan, CEO of chipmaker Broadcom, tops the list, with an annual compensation of $161.8 million in 2023.

Like Nvidia, the company has benefited from surging demand for AI technologies. Broadcom supplies the networking chips used in data centers for big tech companies, including Microsoft. Between 2022 and 2023, Tan’s salary doubled, earning 510 times the median pay of employees.

Ranking in third is Stephen Schwarzman, who runs the biggest private equity firm in the world, Blackstone. The executive’s $119.8 million pay package was bolstered by a 83% rise in its share price last year. The firm is the world’s largest owner of commercial property, with approximately 12,500 real estate assets overall.

Meanwhile, Apple CEO Tim Cook received $63.2 million in 2023—a sharp decline from the $99.4 million earned in the prior year. This rare pay cut was the result of

apple blackstone Broadcom highest paid ceos Markets netflix palo alto networks tim cook

A new index is using AI tools to measure U.S. economic growth in a broader way

The Zeta Economic Index, launched Monday, uses generative AI to analyze what its developers call “trillions of behavioral signals” to score growth on both a broad level and for stability. In June, both measures had good news, with the economic score at 66 and the stability index at 66.1. David A. Steinberg, CEO of Zeta Global Holdings, at the New York Stock Exchange. Source: NYSE

Measuring the strength of the sprawling U.S. economy is no easy task, so one firm is sending artificial intelligence in to do the job.

The Zeta Economic Index, launched Monday, uses generative AI to analyze what its developers call “trillions of behavioral signals,” largely focused on consumer activity, to score growth on both a broad level of health and a separate measure on stability.

At its core, the index will gauge online and offline activity across eight categories, aiming to give a comprehensive look that incorporates standard economic data points such as unemployment and retail sales combined with high-frequency information for the AI age.

“The algorithm is looking at traditional economic indicators that you would normally look at. But then inside of our proprietary algorithm, we’re ingesting the behavioral data and transaction data of 240 million Americans, which nobody else has,” said David Steinberg, co-founder, chairman and CEO of Zeta Global.

“So instead of looking at the data in the rearview mirror like everybody else, we’re trying to put it out in advance to give a 30-day advanced snapshot of where the economy is going,” he added.

The eight verticals the economic index uses include automotive activity, dining and entertainment, financial services such as credit line expansion, health care, retail sales, technology and travel.

For the stability measure, the index will look to gauge consumers’ ability to handle gyrations in the economy.

Together, the goal is to provide something more expansive than gross domestic product and similar measures to gauge growth.

In June, both measures had good news, with the economic score at 66 and the stability index at 66.1. Respectively, the two readings correspond to “active” and “stable” regarding the health of the economy.

“This is maybe a more holistic way of really predicting the economy because not only are you taking the existing economic indicators around GDP,

CNBC

BlackRock’s pricey bet on data and private markets is a tough sell

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Branding Chewy a meme stock is bad for the pet retailer, according to Wall Street analysts

Chewy shares started swinging wildly after online personality Roaring Kitty revealed a big stake , but Wall Street analysts believe being branded as a meme stock is not good for the pet retailer. The meme stock leader, whose legal name is Keith Gill, has taken a 6.6% stake in Chewy, making him the third-largest shareholder. An initial boost in the share price — it surged 18% in two days early last week — has quickly faded, with shares falling more than 5% Monday. While Chewy is in a much better place fundamentally than GameStop or AMC , analysts said the elevated volatility and the potential meme status could hurt the retailer, whose stock surged during the pandemic and retreated afterward. “We view this morning’s share price move and additional volatility as a potential exit opportunity for investors,” said David Bellinger, a Mizuho analyst with a neutral rating on Chewy. “[A]n escalating, unpredictable, and difficult to track news flow may result in a narrower institutional investor base and growing hesitation to own shares and/or increasing likelihood to exit current positions,” he wrote in a report. Selling from the biggest backer Meanwhile, Chewy’s share price has also been affected by sales of stock from the private equity firm BC Partners, which is its largest shareholder. The firm recently sold 17.6 million of its shares back to Chewy for $500 million. BC Partners also dumped more than 5.3 million shares in the open market Thursday, the day Gill posted a picture of a cartoon dog that resembled Chewy’s logo, sparking a huge rally. Many believe BC could use any rally in Chewy stock to sell more of its stake, putting a temporary ceiling on the shares. “We suppose some [Roaring Kitty] fans who plan to buy the stock today aren’t aware that BC is a seller and stands ready to take advantage of another high-volume meme spike, if one materializes for more than an hour or two,” Don Bilson, head of events-driven research at Gordon Haskett, said in a note. The dynamic could be at play Monday as Chewy’s stock opened 9% higher, only to quickly give up all the gains and turn lower. “With BC still holding ~275m shares (~66% of total diluted shares outstanding), this presents a ceiling on upside with incremental retail interest in the name likely met by

CNBC

Stocks making the biggest moves midday: Chewy, GameStop, Boeing, Norwegian Cruise Line and more

Check out the companies making headlines in midday trading: Chewy , GameStop — Chewy’s stock dropped about 6% after a regulatory filing showed meme stock trader Keith Gill, who is also known as “Roaring Kitty,” bought nine million shares, amounting to a 6.6% stake in the pet food e-commerce company. His other top holding, GameStop, also slid 6%. It is unclear if he sold shares of GameStop to buy Chewy. Boeing , Spirit AeroSystems — Boeing on Monday said it would buy back fuselage maker Spirit AeroSystems in a $4.7 billion all-stock deal. Shares of Boeing and Spirit AeroSystems rose more than 3% each. Trump Media & Technology Group — Shares of Trump Media & Technology Group rose 3% following a roughly 11% loss during Friday’s session. The stock is coming off a volatile session following the first presidential debate between President Joe Biden and former president Donald Trump ahead of the November election. Birkenstock — The shoe manufacturer advanced about 1% on the heels of a UBS upgrade to buy from neutral. UBS pointed to higher average sale prices and growth in the Asian market as reason for optimism. Nio — The Chinese electric vehicle stock rose 6% on Monday after the company said vehicle deliveries rose nearly 100% in June . Nio said it delivered 21,209 vehicles last month, up 98% year over year. Tesla — The electric vehicle stock popped 6%. Tesla is slated to report second-quarter delivery numbers this week. Floor & Decor Holdings — Shares of Floor & Decor dropped 3% after Spruce Point Capital Management published a short report , citing concerns about management and the board’s credibility. The report also revealed concerns about the company’s strategy and financial reporting accuracy. NextEra Energy Partners — The renewable energy stock dropped 5%. The Royal Bank of Canada downgraded NextEra Energy Partners to sector perform from outperform, citing a “challenging” road ahead for the company. Cruise stocks — A slate of cruise companies fell as Hurricane Beryl made landfall in Grenada as a Category 4 storm. Norwegian Cruise Line and Carnival slid more than 6%, while Royal Caribbean dropped 2.7%. — CNBC’s Jesse Pound, Michelle Fox, Alex Harring, Sarah Min and Hakyung Kim contributed reporting.