Stocks should rally if the U.S. and China agree to new negotiations and a ceasefire in the trade war, but the economic impact of tariffs will continue.Market Insiderread more
More than 300 companies are talking to government officials in Washington about how detrimental the trade war is.Marketsread more
Powell stresses the central bank's independence in a speech that comes amid continuous pressure from the White House to cut interest rates.The Fedread more
The trade war between Beijing and Washington appears to have depressed Chinese property purchases in the United States. China's own actions may also be playing a role.Real Estateread more
Markets in Asia fell on Wednesday morning after U.S. Federal Reserve Chairman Jerome Powell tempered expectations for a potential interest rate cut.Asia Marketsread more
In a text message, Grisham confirmed to CNBC that she will still be working for the first lady even as she takes on her new roles.Politicsread more
Acting Customs and Border Protection Commissioner John Sanders is resigning amid the furor over the Trump administration's treatment of migrant children.Politicsread more
NBC is taking the office back from Netflix as it seeks to bolster its own streaming service launching in 2020.Technologyread more
Wayfair employees plan to walk out tomorrow, after no action was taken in response to their opposition to the company supplying border detention camps with beds for children.Retailread more
Micron beat analyst estimates on earnings and revenue for its fiscal third quarter of 2019.Technologyread more
Omarosa Manigault Newman, who had been a senior advisor to President Donald Trump before her firing, was sued for allegedly failing to file required financial disclosures.Politicsread more
Goldman Sachs' millionaire clients are teed up to be among the biggest winners in Uber's initial public offering this week.
About four years ago, the bank's private-wealth customers were offered what are known as convertible bonds. In this case, the Uber corporate bonds turn into discounted stock when the ride-hailing company goes public, according to a person familiar with the fundraising.
Uber raked in $1.6 billion in those debt sales to Goldman's clients, who will now get a 40% discount on Uber stock as it debuts on the New York Stock Exchange, the person told CNBC. The Wall Street Journal first reported the news and financial figures.
Collectively, those clients' investments will amount to a 3.4% stake in Uber, the person said. That percentage is worth $2.7 billion if Uber prices its shares in the middle of its expected price range, which a source told CNBC this week is likely to happen. The stake results in a $1 billion profit on paper for the Goldman clients in just a matter of years, the person said.
The San Francisco-based start-up is expected to price shares on Thursday and start trading Friday under the symbol "UBER." On a fully diluted basis, the company's valuation could come in at $91.51 billion on the high end. At the midpoint of that range, Uber's valuation would be about $86 billion.
The convertible bond deal let Goldman Sachs clients get a deeper discount on the stock the longer Uber stayed private, the person said. Luckily for certain Goldman clients, Uber remained private for a decade. During that time, the interest on Uber debt also increased. The bonds started out by kicking back 2.5% for investors in the early years and rose to as high as 12.5% this year, the person said.
The Goldman Sachs shareholders are subject to the same lockup rules as the investment bank, which has a separate $500 million investment in Uber, according to The Wall Street Journal report. The bank is barred from selling shares for 6 months, and both Goldman and its clients are not allowed to enter into hedges or any other transactions such as shorting before that lockup period is over, according to the Journal.
Shares of rival Lyft have fallen 30% since its March stock market debut. Some have blamed a hedge related to a trade between billionaire investors Carl Icahn and George Soros for the stock's underperformance. According to the Journal, Uber's lawyers combed through Lyft's lockup agreement for any loopholes that permitted the hedge, looking to close them for Uber ahead of its own IPO.
There are plenty of other winners in Uber's highly anticipated debut. Softbank Vision Fund is Uber's largest shareholder. The world's largest technology investor announced an additional $1 billion investment in Uber's self-driving vehicle unit just weeks before its initial public offering. Venture capital firm Benchmark is its second-largest shareholder with 8.5% of total shares on the private market, followed by founder and former CEO Travis Kalanick, who was replaced by Dara Khosrowshahi in 2017.