Governments worldwide are struggling to keep up with how to regulate new decentralized online currencies as blockchain platforms become more prominent across financial networks. (David Tweed, Bloomberg). But even though an increasing number of investors utilize cryptocurrencies, many are still confused about how to treat virtual currency for tax purposes. (Kelly Phillips, Forbes). Recently, Her Majesty’s Revenue and Customs (HMRC), the government department of the United Kingdom responsible for the collection of taxes, opened a contract to procure software to help identify when cryptocurrency is used to avoid paying taxes. (David Canellis, TNW).
Read MoreThe US and China are the two largest economies in the world and over the past year they have imposed billions of dollars’ worth of tariffs on each other’s goods. So far, the US has imposed tariffs on more than $360 billion of Chinese goods forcing the Chinese to retaliate with tariffs on more than $110 billion of US products. (BBC). This post provides an overview of the most recent activities in the trade war between the U.S. and China, and an analysis of any implications these new tariffs have for the US, Chinese, and Global Economy.
Read MoreWeWork’s biggest investor, SoftBank Group Corp., took over 80 percent of WeWork in a $9.5 billion rescue package in October following the company’s botched initial public offering (“IPO”) attempt. Concerns about the company’s losses and corporate governance forced WeWork to shelve its plans for an IPO in late September leading to the need for an influx of capital to replace what was expected to be raised by WeWork in the IPO. (Eavis and de la Merced, The New York Times). WeWork, valued at $47 billion in January 2019, is valued at the start of 2020 at less than $8 billion. (Hsiao, Top1000funds.com). This $40 billion loss in less than a year is serving as a lesson for investors in high-profile startups with valuations upwards of $1 billion (“unicorns” or “unicorn companies”), and as a warning for growth-stock companies looking to make their public market debuts. (Alpeyev, Tan, Davis and Huet, Bloomberg). This post outlines WeWork’s turbulent 2019 and briefly explores what may become a “unicorn” startup burnout case study business students will study for years to come.
Read MoreTygon Peak Capital Management, LLC (“Tygon Peak”), a private equity firm, filed suit in Delaware Chancery Court against Voice Comm, LLC (“Voice Comm”) and its ownership group alleging breach of contract, unjust enrichment, breach of the covenant of good faith and fair dealing, deceptive trade practices, and defamation. (Verified Complaint, Tygon Peak Capital Management, LLC v. Mobile Investments Investco, LLC, No. 2019-0847 (Del. Ch. Oct 24, 2019)). The defendants in the suit include Voice Comm’s parent company, Mobile Investments Investco, LLC (“Investco”), the other firms that invested in Investco, and the individuals in charge of these investment companies who also sat on the boards of Investco and its subsidiaries. Id. Tygon Peak owns 100% of Investco’s Class A Units and 6.8% of Investco’s Class B Units and has a seat on Investco’s Board of Managers (“Investco’s Board”). Id. The suit arose after negotiations broke down over a potential buyout of Tygon Peak’s Investco stock. (Leonard, Bloomberg Law).
Read MoreThe House of Representatives passed H.R. 1595 – Secure And Fair Enforcement Banking Act of 2019 (“SAFE Act”) on September 25, 2019, in a historic step toward federal marijuana legalization. (Jeff Smith, Marijuana Business Daily). Introduced by Representative Ed Perlmutter (D-Co.), the SAFE Act, which required a two-thirds majority in the House, passed with a vote of 321-103 in a rare showing of bipartisan support. Id. Under current federal money laundering statutes, any financial firm that provides services to a cannabis company, regardless of its operation in a legal state, faces heavy financial penalties. (Lane and Gangitano, The Hill). However, under the SAFE Act, financial institutions and insurance companies could provide commercial banking services to state-legal cannabis companies without fear of federal penalty. (Staff, Marijuana Business Daily).
Read MoreThe United Kingdom's Competition and Markets Authority (“CMA”) paused Amazon's investment into online food delivery company Deliveroo while it investigates the deal. (Kate Holton and James Davey, Reuters). In May 2019, Amazon led a $575 million investment, with other businesses, into Deliveroo. (Business Insider). Although Amazon would only retain a minority share in Deliveroo, the CMA is concerned this investment could “result in Amazon and Deliveroo ceasing to be distinct.” (Danica Kirka, AP News).
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