Tag Archives: Cash

Business

Zillow is making cash offers on houses using its ‘Zestimate’ home value tool

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NAHB CEO Jerry Howard discusses the mass exodus from cities creating a high demand in the housing market and regulations slowing down home building.

Zillow is using its “Zestimate” to make cash offers on houses.

The real estate listing website announced Thursday that its Zestimate — Zillow’s home value estimation tool — could be considered an initial cash offer on “eligible homes” in 20 U.S. cities.

The tool will be paired with the company’s Zillow Offers program, where people in select markets can sell their homes directly to the company.

“This exciting advancement demonstrates the confidence we have in the Zestimate and the lengths we are willing to go to make selling your home truly seamless and easy,” Jeremy Wacksman, Zillow’s chief operating officer, said in a statement.

TULSA, OKLAHOMA WILL PAY YOU $10G UP FRONT TO BUY A HOUSE THERE

“Zillow is transforming the way people sell and buy homes,” Wacksman added. “Presenting the Zestimate as a cash offer to qualifying homes up front will save time, reduce friction and provide greater transparency – getting us closer to our vision of helping customers transact with the click of a button.”

Zillow announced its Zestimates can be considered an initial cash offer on eligible houses in 20 U.S. cities. (iStock)

26,000 PEOPLE APPLIED TO MOVE TO ARKANSAS AND GET $10G

Homes that are eligible for Zillow’s initial cash offer using the Zestimate valuation will have the offer displayed at the top of their property information on the real estate website, according to the announcement.

However, the initial cash offer displayed is “before taxes and fees are factored in and is also subject to eligibility and accuracy of property information,” the announcement said.

HOUSING THE BEST PERFORMING SECTOR OF ECONOMY AS FEARS MOUNT OVER DOWNTURN

According to Zillow’s announcement, Zestimates on eligible homes can be considered an initial cash offering from Zillow in 20 major cities, including places in Arizona, North Carolina, Florida, Oregon, Colorado, Tennessee, California, Texas, Nevada, Georgia and Minnesota.

Zillow said it plans to expand its service as its Zillow Offers grows.

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Zillow first launched its Zestimate tool in 2006. Today, the tool is being used to estimate the home value of almost 100 million homes. According to the announcement, it has a “nationwide median error rate for on-market homes of 1.9%.”

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The tool calculates home value using “data from public records, feeds from multiple listing services and brokerages,” the announcement said. Zestimates also use artificial intelligence such as computer vision and a deep-learning neural network to include information from photographs, according to Zillow.

Ticker Security Last Change Change %
ZG ZILLOW GROUP INC 159.33 -12.89 -7.48%

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Business

PayPal CFO says company is unlikely to invest cash in cryptocurrencies

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PayPal is not likely to buy digital currencies like bitcoin, though the company does see immense opportunity in the digital wallet space.

In an appearance on CNBC’s “Mad Money” Thursday, PayPal Chief Financial Officer John Rainey said the payments giant has no interest in buying cryptocurrency, instead preferring to invest in services that are additive to the platforms it offers.

“We’re not going to invest corporate cash, probably, in sort of financial assets like that,” he said in response to an inquiry from the show’s host, Jim Cramer, “but we want to capitalize on this growth opportunity that’s in front of us.”

The company has acknowledged that it believes the transition to digital forms of currencies is inevitable. In December, PayPal CEO Dan Schulman called digital wallets a “natural complement to digital currencies” and said the company serves 360 million digital wallets.

PayPal does have exposure to the crypto market. In October, the company announced that it would allow users to buy, hold and sell cryptocurrencies, including bitcoin, ethereum, bitcoin cash and litecoin. Users can also shop with the digital coins in PayPal’s retail network.

Venmo, the mobile wallet owned by PayPal, is expected to begin offering the same services in the first half of this year. The features will also be extended to international markets.

PayPal plans to invest its money in companies that provide “complementary assets to our platform” that can drive growth, Rainey said. The company also announced Thursday it would introduce its buy, sell and hold crypto services to the United Kingdom in the near future.

“The types of services that we’re providing, like buy now, pay later [and] crypto as an example — even offline QR code — those are the types of things that we want to continue to invest in, be it organically or even inorganically when we see opportunities in the ecosystem,” he explained.

Buy now, pay later is a point-of-sale loan program that works much like layaway plans, allowing shoppers to pay for products via an installment plan with no interest or fees.

The crypto comments come as activity in crypto markets has picked up this year. Tesla made a splash earlier this week when the company disclosed that it purchased $1.5 billion worth of bitcoin and would also begin accepting the currency as a form of payment from customers. That followed a surge in interest for dogecoin, the digital coin that was blessed by Tesla CEO Elon Musk on his Twitter page.

Tesla’s move to invest in bitcoin sparked wonders in the investment community if other companies would follow in the carmarker’s footsteps. Earlier Thursday, Uber CEO Dara Khosrowshahi said that the topic was discussed but that the company ultimately declined to invest in the digital currency.

Schulman, who appeared alongside Rainey in the “Mad Money” interview, said PayPal grew free cash low by 48% in 2020 to $5 billion. He forecasts the company will generate $10 billion of annual free cash flow by 2025.

PayPal will be a consolidator in the financial technology industry, he said.

“We want to use that cash. We want to use our balance sheet as a strategic weapon,” Schulman said. “That may be returning cash to shareholders and it may be through acquisition, but every one of those dollars matter to us and we really take our capital allocation quite seriously.”

Last month, PayPal made its first acquisition since announcing in late 2019 that it would buy coupon aggregator Honey Science for $4 billion. PayPal took 100% control of the GoPay payment platform, which is based in China, in a deal that closed on Jan. 11.

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Business

UPDATE: Jazz Pharmaceuticals to acquire GW Pharma for $7.2 billion in cash and stock, GW soars 46% premarket

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Jazz Pharmaceuticals Plc
JAZZ,
+1.32%
said Wednesday it has agreed to acquire GW Pharmaceuticals Plc
GWPH,
+1.51%
in a cash-and-stock deal valued at $7.2 billion. Under the terms of the deal, Jazz Pharma will pay $200 per share in cash and $20 in stock for each share owned, or a premium of about 50% over GW’s closing price on Tuesday, and 60% over its 30-day volume weighted average price. The deal is expected to close in the second quarter, to boost profit in the first year after close and to drive double-digit revenue growth. GW is a leader in therapies based on its proprietary cannabinoid product platform to treat a number of diseases. The company was the first to receive FDA approval for a CBD-based treatment for severe forms of childhood epilepsy in its Epidiolex lead product. Jazz makes sleep medications and has a growing oncology business. GW Pharma shares soared 46% premarket after resuming trade following a halt for the news. Jazz shares were down 2.7% premarket, but have gained 11% in the last 12 months, while the S&P 500
SPX,
+1.39%
has gained 18%.

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Entertainment

Sun Records Sells Johnny Cash Recordings

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The deal also included the Sun Records trademark, which sources say is also a very profitable component, as well as the Sun Diner in Nashville and its merch business too. John Singleton — brother of the late Shelby Singleton who purchased the Sun label back in 1969 from founder and industry legend Sam Phillips — will stay on overseeing the Sun Records operation.

“We are extremely pleased to pass the Sun Records baton to Primary Wave and are confident that they will continue to reach new heights for the crown jewel of the music business created by Sam Phillips, which my brother, Shelby, and I have kept alive and relevant for the past 50 years” John Singleton, Sun Entertainment Corp. president, said in a statement.

Primary Wave will also provide additional resources to expand the Sun Records brand, which can now tap into the company’s marketing, branding, digital strategy and licensing and synch opportunities.

“Sun Records is the original home to some of the biggest legends in music,” said Larry Mestel, Primary Wave CEO & founder, in a statement. “Sam Phillips treated all of his artists with the utmost respect and provided a space of creativity [like] no other. His vision for Sun aligns perfectly with the creative ethos of Primary Wave, and I am overjoyed that this historic label is now a part of our family.”

Sun Records is currently distributed by the label itself through direct digital licensing deals and by licensing the masters to well-known established re-issue labels like Charly Records and Bear Family Records.

 

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Business

Robinhood, in Need of Cash, Raises $1 Billion From Its Investors

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Facing an onslaught of demands on its cash amid a stock market frenzy, Robinhood, the online trading app, said on Thursday that it was raising an infusion of more than $1 billion from its existing investors.

Robinhood, one of the largest online brokerages, has grappled with an extraordinarily high volume of trading this week as individual investors have piled into stocks like GameStop. That activity has put a strain on Robinhood, which has to pay customers who are owed money from trades while posting additional cash to its clearing facility to insulate its trading partners from potential losses.

On Thursday, Robinhood was forced to stop customers from buying a number of stocks like GameStop that were heavily traded this week. To continue operating, it drew on a line of credit from six banks amounting to between $500 million and $600 million to meet higher margin, or lending, requirements from its central clearing facility for stock trades, known as the Depository Trust & Clearing Corporation.

Robinhood still needed more cash quickly to ensure that it didn’t have to place further limits on customer trading, said two people briefed on the situation who insisted on remaining anonymous because the negotiations were confidential.

Robinhood, which is privately held, contacted several of its investors, including the venture capital firms Sequoia Capital and Ribbit Capital, who came together on Thursday night to offer the emergency funding, five people involved in the negotiations said.

“This is a strong sign of confidence from investors that will help us continue to further serve our customers,” Josh Drobnyk, a Robinhood spokesman, said in an email. Sequoia and Ribbit declined to comment.

Investors who provide new financing to Robinhood will receive additional equity in the company. The investors will get that equity at a discounted valuation tied to the price of Robinhood shares when the company goes public, said two of the people. Robinhood plans to hold an initial public offering later this year, two people briefed on the plans said.

Robinhood’s emergency fund-raising is the latest sign of how trading in the stock market has been upended this week.

An online army of investors, who have been on a mission to challenge the dominance of Wall Street, rapidly bid up the price of stocks like GameStop, entrapping the big-money hedge funds that had bet against the stocks. Some of these individual investors have reaped huge profits, while at least one major hedge fund had to be bailed out after facing huge losses.

Robinhood, which is based in Silicon Valley, has been key to empowering the online investors. Adoption of the app has soared in the pandemic as the stock market surged and people took up day trading in the void of other pastimes. The company has drawn in millions of young investors who have never traded before by offering no-fee trading and an app that critics have said makes buying stocks feel like an online game.

Without fees, Robinhood makes money by passing its customer trades along to bigger brokerage firms, like Citadel, who pay Robinhood for the chance to fulfill its customer stock orders.

In May, Robinhood said it had 13 million users. This week, it became the most-downloaded free app in Apple’s App Store, according to Apptopia, a data provider.

Critics have accused the company of encouraging people to gamble on stock market movements and risk big losses. Brokerages including T. Rowe Price, Schwab and Fidelity have imitated Robinhood by lowering their trading fees to zero. Many of them were also hit by the crush of trading this week.

Robinhood has had no trouble raising money over the last year, drawing $1.3 billion in venture capital backing and boosting its valuation to nearly $12 billion. Its other investors include the venture capital firm DST Capital, New Enterprise Associates, Index Ventures and Andreessen Horowitz.

Yet the company has faced many issues, including fines from regulators for misleading customers. Last March, it raised more money after its app went down and left customers stranded and nursing big losses, leading to a still ongoing lawsuit.

In recent weeks, many online investors have used Robinhood to make bets that pushed up the price of GameStop, AMC Entertainment and other stocks that had been widely shorted — or bet against — by hedge funds. That changed on Thursday after the company curbed customer trading in the most popular stocks.

“As a brokerage firm, we have many financial requirements,” Robinhood said in a blog post Thursday. “Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment.”

In protest, hundreds of thousands of users joined a campaign to give Robinhood’s app the lowest one-star review and drive the company’s rating down. Some investors also sued Robinhood for the losses they sustained after the company cut off trading in certain stocks and several lawmakers urged regulators to exercise more scrutiny of the company.

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