Market volatility, Elon Musk's U-turn on Bitcoin, and Victoria's (not so) Secret spinoff
Welcome to Nº 24 of In The Money, your weekly newsletter on keeping up with all things finance, tech, and startups. As always, this week’s newsletter is filled with all the financy things. This week Fortune named a female as the world’s greatest leader for the first time. L Brands decided to spinoff Victoria’s Secret instead of selling it. Bumble shares fell below IPO price after the company reported earnings. Elon Musk is sending mixed signals that are confusing the cryptocurrency markets. Google is going to space together with SpaceX (almost at least). E-scooter company Bird is going public through a SPAC. Also, this week a real pipeline problem hit the US. This and much more. I hope you enjoy this edition.
Paid pregnancy loss leave 👼
The online bank Monzo has become one of the first UK companies to offer paid leave for employees affected by the loss of a pregnancy. The move is part of the bank’s mental health drive. It follows the departure of Monzo’s founder and former CEO, Tom Blomfield, who stepped down in January in the wake of his own struggles with anxiety and stress. Monzo’s policy will give either partner up to 10 extra days of paid leave if they lose a baby due to abortion, miscarriage, or stillbirth, regardless of when in the pregnancy it happens. “This also includes colleagues who are partners or surrogate mothers, recognizing that pregnancy loss doesn’t just affect women or heterosexual couples,” the bank said. Extra leave can be approved by managers if employees feel they need more. Under UK employment law, companies only have to allow parents to use planned maternity or paternity leave if they lose their baby after 24 weeks when it is considered a stillbirth. Loss before that is counted as a miscarriage and does not qualify for maternity leave or pay. Then it is up to the discretion of employers whether to offer compassionate leave, annual leave, or unpaid holiday. In the UK, more than one in five pregnancies end in miscarriage, resulting in roughly 250,000 losses each year, of which most occur in the first three months of pregnancy. Monzo’s policy was quietly rolled out two months ago and will be expanded to its handful of US staff over the next weeks. Campaigners welcomed the news and are hoping that other companies will follow suit. In March, New Zealand announced a new policy that granted women and their partners three bereavement days at full pay after a miscarriage.
World’s greatest leader 🏆
Speaking of New Zealand, on Wednesday Fortune published its annual World’s Greatest Leaders list, which was topped by New Zealand Prime Minister Jacinda Ardern. This is the first time a woman had ever held the top spot solo.
“One of the criticisms I've faced over the years is that I'm not aggressive enough or assertive enough, or maybe somehow, because I'm empathetic, it means I'm weak. I totally rebel against that. I refuse to believe that you cannot be both compassionate and strong.” – Jacinda Ardern
Before the pandemic, Jacinda Ardern had already sealed her position as a great leader by empathetically steering her country through the aftermath of a terror attack and the deadly eruption of a volcano. Then the pandemic struck, and Ardern targeted not just suppression of the virus, but its complete elimination. Her strategy largely proved successful. New Zealand, a nation of nearly 5 million people, has seen fewer than 2,700 cases and only 26 deaths. Furthermore, Ardern and her cabinet ministers took a six-month, 20% pay cut in 2020 to show solidarity with people who had lost their livelihoods owing to the pandemic. In October 2020, Ardern’s party won landslide reelection, fueled by her straight talk, and the fact that her government’s restrictions on international travel made it possible for life to continue relatively normal within the country’s borders. She has also adopted world-leading climate and gender-equity policies. In March this year, New Zealand became the first country to require that banks, investment managers, and insurers disclose the effects of climate change on their businesses. And last year, Ardern’s administration made it easier for women to negotiate with their employers for more equitable pay. Adding to the list the bereavement day policy after a miscarriage, mentioned in the section above. You can explore the full list of the world’s greatest leaders here.
Victoria’s (not so) Secret Spinoff 👙
On Tuesday L Brands announced that it has decided to spin off Victoria’s Secret rather than sell it. Last year the company said it was considering separating Victoria’s Secret from the rest of its business, testing private equity’s interest. L Brands restarted talks with potential buyers for Victoria’s Secret after a sale to the private equity firm Sycamore Partners fell apart last year due to the pandemic. That deal would have valued the lingerie label at $1.1 billion. This time around bids didn’t match what Victoria’s Secret expects to get in a spinoff either. Reportedly, L Brands received several bids above $3 billion but turned them down. It expects Victoria’s Secret to be valued somewhere between $5 billion and $7 billion in a spinoff to L Brands shareholders. Recently analysts at Citi and JPMorgan valued Victoria’s Secret as a stand-alone company at $5 billion. Apart from a pandemic that upended the retail industry, Victoria’s Secret has been dealing with a series of challenges in recent years. Victoria’s Secret held a dominant market share in the lingerie industry for a long time but has fallen out of favor due to its overtly sexy marketing that shunned certain body types. Other challenges included accusations of misogyny and sexual harassment in the workplace and revelations about the ties between Les Wexner, the company’s founder, and former chairman, and Jeffrey Epstein. A lot has changed since then. Six months ago, L Brands tapped Martin Waters, to be CEO of Victoria’s Secret, and he will continue to lead the company after the spinoff. Since this past holiday season, momentum at Victoria’s Secret has grown. The company’s efforts have included changes in marketing, de-emphasizing the overly sexy image, to target women more broadly and inclusively. The company also closed more than 200 stores and focused on improving profitability, which rose sharply at the end of last year, surpassing pre-pandemic results. Year to date, L Brands shares are up about 84% but fell 3.7% in premarket trading on the news.
Definitions
Spinoff is when a company creates a new independent company by selling or distributing new shares of parts of its existing business. A company creates a spinoff expecting that it will be worth more as an independent entity. The company creates a spinoff by distributing 100% of its ownership interest in that business unit as a stock dividend to existing shareholders.
Private equity is an alternative investment class consisting of capital that is not listed on a public exchange. Private equity funds invest in private companies or engage in buyouts of public companies, resulting in the delisting of the public equity.
Private equity tries to improve gender diversity 👩💼
Speaking on private equity. On. Tuesday, Carlyle Group announced it has tied compensation of its chief executive officer to the firm’s performance on certain diversity and inclusion goals. Carlyle CEO, Kewsong Lee’s pay, which totaled $16.4m last year, will be measured against a set of metrics including the hiring and development of an inclusive culture, as well as meeting the company’s target of having 30% of board seats of its portfolio companies filled by diverse candidates by 2023. Year-end performance bonuses will be contingent on meeting individual diversity objectives. Carlyle is also launching an incentive program that will reward employees who have stood out in their contributions to progressing diversity. Award recipients will be nominated by their peers and chosen by group heads. They will receive either a grant of restricted stock units or cash. The firm did not specify how much money will be tied to the programs. Carlyle says half its $260bn assets are managed by women.
Bumble tumble 💌
On Thursday shares of Bumble fell sharply, dipping below their initial public offering price of $43. The company has on Wednesday reported first-quarter results on and issued what some analysts considered cautious guidance. The dating company’s stock dipped as much as 12% to hit an all-time low of $41.54. Bumble said it anticipates total revenue in the range of $175 million to $178 million for the second quarter, up 31% year-over-year, which is slightly better than analysts surveyed expected. It raised guidance and now anticipates full-year revenue in the range of $724 million to $734 million. For the quarter, Bumble reported revenue of $170.7 million, up from $79.1 million for the first quarter of 2020. Analysts were expecting $164.6 million. Total paying users increased 30% to 2.8 million.
How apps get accepted into App Store 📱
On Tuesday Apple said it rejected almost 1 million apps that were submitted to its App Store for the first time in 2020. Apple argues that the system where the company approves each of the 1.8 million apps on the store and their updates and checks the apps against a lengthy list of App Store rules, allows it to keep iPhone users safe from scams, malware, and poor-quality user experiences. The disclosure comes as Epic Games’ antitrust case against Apple (which was covered in last week’s ITM) has focused on App Store’s failures. Epic Games is seeking to force Apple to let it offer its own app store for iPhones and bypass Apple’s 30% App Store fee for in-app purchases. Epic Games has argued that Apple’s App Store hampers competing software makers and that Apple’s rules are applied unevenly to different developers. Epic further said Apple’s process is imperfect, sometimes allowing malicious software to be approved for the store, and that Apple’s own employees sometimes say its process is not good enough to prevent fraud. On the other side, Apple said in a slide deck presented in the trial that it has used a combination of 500 human reviewers and automated checks to review roughly 5 million apps per year, with rejection rates ranging from 33% to 36%. Apple employees argued at the trial that the number of mistakes it makes is tiny in comparison with the scale of its App Store. Apple has defended the App Store as an essential and indivisible part of its business, stating that it is the only way for consumers to install software on an iPhone. Last week, an Apple lawyer argued that allowing users to install software from outside the App Store, as Android does, would create security risks.
Is TikTok the new LinkedIn? 💼
What if you could use a TikTok clip as your resume? Soon you can because TikTok is testing a tool for brands to recruit employees. The pilot program is designed to help people find jobs on TikTok and connect with companies looking to find candidates. Currently, the company is testing the service with a beta group of companies. The platform isn't integrated within TikTok, but rather a separate web page accessible via the TikTok app where brands can post jobs. At the same time, users can post a TikTok video resume to the site rather than a traditional resume. The idea is for users to give an elevator pitch or work experience summary via the video. To help publicize the service TikTok will ask candidates to post their resume videos to their TikTok profiles if they want.
You can soon buy NFTs on eBay 🖼
On Tuesday, eBay allowed the sale of non-fungible tokens, or NFTs for digital collectibles like trading cards, images, or video clips on its platform. It is the first e-commerce company to tap into the recent NFT. You can read more about what NFTs are in a previous edition of ITM, but essentially NFTs are virtual assets that exist on a blockchain ledger. Some of these items, such as digital art has recently been selling for tens of millions of dollars at auction houses Christie’s and Sotheby’s. Just this week, a lot of 9 CryptoPunks portraits ended up selling for just under $17 million in a Christie’s, while other multi-million-dollar deals, included the $69 million sale of a digital artwork by Beeple in March. At eBay, in the short term, an NFT inventory will be provided to sellers who meet the company’s standards. Users can expect to see more programs, policies, and tools in the future that will let them buy and sell NFTs across a broader range of categories. The announcement comes a week after eBay said it was open to the possibility of accepting cryptocurrency as a form of payment in the future.
Sad Doge 🐕
Last week ITM reported Dogecoin reaching record highs in anticipation of Elon Musk’s, the self-proclaimed “Dogefather” Saturday Night Live debut. However, with SNL airing, Dogecoin lost more than a third of its price. The meme-inspired cryptocurrency fell as much as 36%, dropping to $0.416 from levels around $0.65 before the show. Musk mentioned Dogecoin in his opening monologue, he called himself the “Dogefather,” said dogecoin was a “hustle,” and howled, “To the moon,” a catchphrase among Dogecoin enthusiasts’ intent on driving the value of the cryptocurrency to one dollar. Musk has posted numerous comments about cryptocurrencies on Twitter. His tweets previously kicked off the rally in Dogecoin. For example, he has said, that cryptocurrency has a "good chance" of becoming what he called "the future currency of the Earth." Some financial commentators have questioned whether it is responsible for Musk to comment on the cryptocurrency, given he has the power to move its price.
Not long after SNL has aired. Elon Musk announced that his SpaceX will launch the “DOGE-1 Mission to the Moon” in the first quarter of 2022. The company is also accepting Dogecoin as full payment for the lunar payload. In a statement, SpaceX vice president of commercial sales Tom Ochinero said that DOGE-1 “will demonstrate the application of cryptocurrency beyond Earth orbit and set the foundation for interplanetary commerce.”
Mixed signals 🤷♀️
Am I the only one feeling like we are getting mixed signals from Elon? On Thursday hundreds of billions of dollars were wiped off the entire cryptocurrency market after Elon Musk tweeted that Tesla would suspend car purchases using Bitcoin (here’s his full tweet). In his tweet, Musk cited environmental concerns and said Tesla is “concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.” It was only back in February when Tesla announced in a regulatory filing that it had purchased $1.5 billion worth of Bitcoin and planned to accept the cryptocurrency for payments. The support for cryptocurrency from Tesla contributed to the skyrocketing of prices of cryptocurrencies, including Bitcoin and Dogecoin, in recent months.
Etherum creator donates $1.5 billion in crypto
While we are on the topic of cryptocurrencies. On Wednesday, Vitalik Buterin, the creator of the world’s second-largest cryptocurrency, Etherum, donated cryptocurrencies worth $1.5 billion to several non-profit organizations, including $1 billion to a COVID-19 relief fund in India, in one of the largest-ever individual philanthropy efforts. Or at least the $1.5 billion was the worth of the cryptocurrencies, many of which are dog-themed when he made the donation. Buterin, transferred 500 ETH (Etherum) and over 50 trillion SHIB (Shiba Inu), a meme coin, worth around $1.14 billion at the time of the transaction, to India COVID-Crypto Relief Fund. The transaction prompted panic among some investors, which led to an over 35% drop in SHIB’s price on Wednesday. SHIB, named after Shiba Inu, and Dogelon Mars (ELON), another meme currency that Buterin donated, are alternative cryptocurrencies that have recently exploded in popularity. SHIB is a joke on Dogecoin, which itself was created as a joke.
Coinbase tripled revenue in one quarter 🤑
Coinbase reported on Thursday that revenue and net income skyrocketed in the first quarter of 2021 as the cryptocurrency trading platform capitalized on a boom in crypto prices and corresponding interest from investors. Revenue tripled from last quarter.
Here’s how the cryptocurrency exchange did in its first earnings report since the company’s direct listing in April:
Earnings: $3.05 per share
Revenue: $1.80 billion, up from $585 million in the previous quarter.
The company’s net profit for the quarter was over $771 million, more than fourfold over the fourth quarter 2020 figure of $177 million and more than 24 times higher than the year-ago quarter’s profit. Coinbase shares were up around 3% in after-hours trading after the report.
Google goes to space 🚀
On Thursday, Google announced that its cloud unit had won a deal to supply computing and networking resources to SpaceX, Elon Musk’s privately held space-development company. Google is going to help deliver internet service through SpaceX’s Starlink satellites. SpaceX will install ground stations at Google data centers that connect to SpaceX’s Starlink satellite. The deal represents a victory for Google as it tries to take share from Amazon and Microsoft in the fast-growing cloud computing market. The entire aim of Starlink is to provide reliable, broadband-quality connections to areas that have typically be hard or impossible to reach with legacy ground-based network infrastructure. The cooperation with Google means that business and public sector customers will not only be taking advantage of the new network reach to have access to internet connections but also to cloud-based infrastructure and applications, including AI and machine learning capabilities. This should bolster Starlink’s reliability in terms of its consumer clients, but also provide key capabilities for serving enterprise customers. Much of the public focus so far for Starlink’s roll-out has been on residential access across its expanding beta. The companies expect to become available to enterprise customers in the second half of this year.
Stop ✋
Remember when a while back, ITM reported that Facebook was planning on launching an Instagram for kids under age 13? Now US State Attorney Generals are trying to stop those plans. In a letter, attorneys general representing 44 US states and territories are pressuring Facebook to abandon its plans to launch Instagram to children. “It appears that Facebook is not responding to a need, but instead creating one, as this platform appeals primarily to children who otherwise do not or would not have an Instagram account,” the coalition of attorneys general wrote, warning that Instagram for children would be “harmful for myriad reasons.” The state attorneys general also cite concerns around mental health, privacy, and Facebook’s track record of prioritizing growth over the wellbeing of children on its platforms. In the letter, (which you can read here), they delve into specific worries about cyberbullying, online grooming by sexual predators, and algorithms that showed dieting ads to users with eating disorders.
A real pipeline problem 🛢
When it comes to female founders there certainly is not a pipeline problem. However, during the weekend a very real pipeline problem materialized. The Colonial Pipeline, responsible for the US largest fuel pipeline, temporarily suspended all operations due to a ransomware attack last Friday. Colonial said it learned Friday that it “was the victim of a cybersecurity attack” and has since shut down 5,500 miles of pipeline that carry nearly half of the fuel supplies on the East Coast, raising fears of spot shortages of gasoline, diesel and jet fuel. The FBI confirmed Monday that the culprit is a strain of ransomware called DarkSide, believed to be operated by a Russian cybercrime gang referred to by the same name. DarkSide is an organized group of hackers set up along the “ransomware as a service” business model, meaning the DarkSide hackers develop and market ransomware hacking tools, and sell them to other criminals who then carry out attacks. On Monday US fuel prices at the pump rose six cents per gallon on the week to $2.967 per gallon for regular unleaded gasoline. At the same time on Wall Street shares in US energy firms were up 1.5%. On Wednesday the US national average for a gallon of gas jumped above $3 for the first time since 2014, as much of the crucial Colonial Pipeline continued to remain offline. Amid fears of a supply shortage, consumers in Southeastern states were heading to the pump, creating long lines and in some cases wiping fuel stations dry. Later on, Wednesday Colonial Pipeline, said it is restarting operations after being shut down for five days due to the cyberattack.
Bird SPAC 🛴
Micromobility startups are now following the lead of EV (electric vehicle) companies going public via mergers with SPACs (you can read more about what SPACs are and how they work in a previous edition of ITM). Now the Santa-Monica, e-scooter company, Bird, which was once a startup darling but saw ridership plunge during the pandemic, is planning to merge with Switchback II Corporation, a Dallas-based blank check company focusing on companies reducing carbon emissions. In recent weeks, Switchback has been marketing a $200 million PIPE offering that allows investors to buy shares of Bird at the IPO price. Bird is going to use the cash to fund its operations as it struggles to achieve profitability and to expand to more markets. The company announced last month plans to double the size of its European operation, spending $150 million to enter 50 new cities. The SPAC values Bird at $2.3 billion, below the $2.85 billion valuation it reached at the beginning of 2020. But that was before the pandemic, which drove 2020 revenue down to $95 million, a 37% decline from the previous year. Bird expects to trim this year's losses to $96 million and to $28 million in 2022 before reaching profitability in 2023. However, that is predicated upon bringing in $815 million in 2023 revenue. In pre-pandemic 2019, Bird generated $151 million in revenue. To preserve cash, when the seriousness of the pandemic became clear, Bird laid off 406 employees or about 30% of its workforce. In another cost-cutting move, it also put its recently remodeled offices up for sublease. The company says ridership has rebounded as much of the world emerges from strict lockdowns. Topline revenue increased 81% over the past month. Founded by former Uber executive Travis VanderZanden in 2017, Bird became the fastest company in history to reach unicorn status in 2018, a milestone that has become less rarified of late as startup valuations have soared ever higher.
Alibaba’s first operating loss ⬇️
On Thursday, Alibaba posted its first operating loss as a public company as a massive antitrust fine it received last month weighed on its earnings, while revenue beat expectations.
Here’s how Alibaba versus expectations:
Revenue: 187.39 billion ($28.6 billion) vs. 180.41 billion yuan estimated, up 64% year-over-year.
Earnings per share: 10.32 yuan per share ($1.58) vs. 11.12 yuan per share estimated, up 12% year-over-year.
Alibaba swung to a net loss in the quarter of 5.47 billion yuan (Renminbi is the official currency of China while yuan is the unit of account count of the currency), while the market had expected a net profit of 6.95 billion yuan. Alibaba will be hoping the latest results might draw a line under the company’s recent troubles with regulators, which began when the $34.5 billion initial public offering of its financial technology affiliate, Ant Group, was pulled in November. Since then, over $240 billion of value has been wiped off of Alibaba’s stock as regulatory scrutiny has continued, and Alibaba received the massive 18.23 billion yuan ($2.8 billion) fine as a result of an anti-monopoly investigation. Alibaba said its loss from operations was 7.66 billion yuan as a result of the fine. It is the first time Alibaba has reported an operating loss as a public company, CEO Daniel Zhang. But excluding the fine, its income from operations would have been 10.56 billion yuan, a 48% year-on-year rise. Alibaba shares plunged 4.03% by Friday afternoon in Hong Kong.
Largest annual profit by a Japanese company 💰
On Wednesday SoftBank reported a record 4.03 trillion yen ($36.99 billion) (yen is the currency of Japan) profit from its Vision Fund unit, much thanks to its fourth-quarter investment gain on Coupang (which went public in March). This put the company among the world’s biggest earning firms a year after an unprecedented loss. SoftBank is a Japanese multinational conglomerate holding company that owns stakes in many technology, energy, and financial companies. Most notably, it runs Vision Fund, the world's largest technology-focused venture capital fund, with over $100 billion in capital. Softbank Group's net profit was 4.99 trillion yen ($45.88 billion) in the year ended March, topping Warren Buffett Berkshire Hathaway’s $42.5 billion which it made in its last business year. Softbank’s annual profit is the largest posted by a Japanese company to date. It also compares with a 962 billion yen loss a year earlier. There is a whole lot more to unpack, but unfortunately, I’m running out of space, so I will have to refer you to the Softbank investor presentation here.
Believe in music 🎹
On Monday, the digital music company Believe, which scouts out singers and helps them to launch online announced plans to go public on the Paris stock market. It aims to raise around 500 million euros. The IPO comes amid a dearth of offerings in France in 2021. The company operates partly by targeting lesser-known singers outside the ranks of top global-known stars. The group helps to distribute music by striking deals with listening platforms such as Spotify and Apple Music. In the past six years, it has made 18 acquisitions. Believe it would continue to invest in its own technology platforms and is looking to grow in emerging markets. "It's no longer the traditional music model based on a huge amount of services for a very small pool of top artists," CEO Denis Ladegaillerie, who founded Believe in 2005, said. He continued to say that the model around developing artists had drastically changed. That singers are gaining visibility in new ways. "It's not the partnerships with TV channels that matter now, it's how you understand the algorithms on Spotify and on Tiktok." Believe said it expects streaming to account for 78% of the music market by 2027, reaching an estimated market size of $22.4 billion, up from 62% in 2020. The group also said it was profitable.
Unblocked ✅
On Tuesday, a court filing revealed that the US Defense Department will remove Xiaomi from a list of companies with alleged links to the Chinese military. Xiaomi was added to the list during the final days of the Trump administration in January. Companies on the Defense Department's list are blocked from receiving investments from US citizens and organizations. If Xiaomi's designation hadn't been overturned, existing US investors would have had to divest their holdings in the company. In the wake of the announcement, shares of Xiaomi jumped 6.1% in Hong Kong. "Defendants have agreed that a final order vacating the January 14, 2021 designation of Xiaomi Corporation as a CCMC...would be appropriate," states the joint status report filed Tuesday with the US District Court for the District of Columbia in Xiaomi v. US Department of Defense. A CCMC is a "Communist Chinese military company," according to the Defense Department. Xiaomi is the world’s third-largest smartphone manufacturer by shipments, behind Samsung and Apple.
This week in the stock market 🎢
The week began with both the Dow and S&P 500 falling off their record highs after Big Tech got hit on Monday as investors exited stocks like Apple and Microsoft. Both of those stocks lost at least 2% to start the week. Nasdaq suffered even worse of the selling and fell 2.5%. Facebook lost more than 4%, while Amazon and Netflix both dropped over 3%, and Alphabet dipped more than 2%. Cathie Wood’s Ark Innovation ETF fell 5% to its lowest level since November as Tesla, its top holding, lost more than 6%. On Tuesday, technology stocks fell at first but eventually recovered. The Dow lost 473 points, or 1.4%, dragged down by losses in Home Depot, Chevron, and Goldman Sachs. The Dow experienced its worst day since February. The S&P 500 slid 0.9%, while Nasdaq ended the day as the relative outperformer, closing down just 0.1% after dropping more than 2% at its low during the session. Also, on Tuesday’s session the CBOE Volatility Index, a measure of fear in the markets derived by option prices on the S&P 500, jumped as high as 23.73, the highest in two months. On Wednesday US stocks pulled back again during the regular session, led to the downside by technology shares as key inflation data showed higher-than-expected price pressures. The Dow fell 681 points, or 1.99%, to notch its worst session since January. The S&P 500 lost 2.1%, its biggest one-day drop since February, while Nasdaq Composite slid 2.6%. Traders cited a rise in interest rates, triggered by a hotter-than-expected inflation report, for the midweek slump. The Labor Department reported that the prices American consumers pay for goods and services accelerated at their fastest pace since 2008 last month with the Consumer Price Index spiking 4.2% from a year ago. On Thursday, all three major averages snapped their three-day losing streaks to end the day higher. The Dow advanced 434 points, a gain of 1.29%. The S&P 500 and Nasdaq Composite gained 1.22% and 0.72%, respectively. Still, despite Thursday’s stronger session, the major averages are on track for losses for the week as inflation fears hit investors’ sentiment. The market’s volatility this week comes as economic data points to inflation (see the Consumer Price Index above). This has sparked fears that the Federal Reserve could be forced to dial back its loose monetary policy.
Woman of the week
Ruth Porat
Ruth Porat is the chief financial officer of Alphabet, Google’s parent company.
Porat was born in Sale, Cheshire, England. At a young age to Cambridge, Massachusetts, where her father was a research fellow in the physics department at Harvard University. Three years later her father relocated the family to Palo Alto, California, where he worked at the SLAC National Accelerator Laboratory for 26 years. Porat has a Bachelor of Arts degree in Economics and International Relations from Stanford University and holds a Master's degree in Industrial Relations from London School of Economics and an MBA with distinction from Wharton School of the University of Pennsylvania.
Porat began her career at Morgan Stanley in 1987. At Morgan Stanley, Ruth held roles that included Vice Chairman of Investment Banking, Co-Head of Technology Investment Banking, and Global Head of the Financial Institutions Group, before becoming Executive Vice President and CFO of the bank. While a banker at Morgan Stanley, she was credited with creating the European debt financing that saved Amazon from collapse during the dot-com meltdown in 2000. Her financial partner during the Internet investment banking craze was Mary Meeker, who now is the founder of the VC firm, Bond Capital. Meeker is also the godmother to Porat's three children. Later, during the financial crisis, Porat led the Morgan Stanley team advising the United States Department of the Treasury regarding Fannie Mae and Freddie Mac, and the New York Federal Reserve Bank with respect to AIG. In 2013, it was reported that President Barack Obama would nominate Porat as the next Deputy Secretary of the Treasury. However, it was reported later that Porat had contacted White House officials to withdraw her name from consideration. Porat's career was analyzed in the McKinsey & Company study "How Remarkable Women Lead".
“Women are still not reaching the most senior levels of corporations. This is not the shortcoming of women. We're talented and smart.”
In March 2015, it was announced that Porat would join Google as its new CFO as of May 26, 2015. She has been credited with boosting Google's share price by reorganizing the company and imposing financial discipline. She has also been praised for reining in spending on some of Google's 'other bets,' including delivering its own wireless service. For the "2018 All America Executive Team", she was named "Best Internet CFO" by Institutional Investor. Porat is also a member of the Board of Directors of Stanford University Management Company, the University's endowment, the Board of Directors of The Council on Foreign Relations, and a member of the Board of Directors of The Blackstone Group.
In 2020, Porat was listed as the No. 16 most powerful woman in the world by Forbes, and No. 7 on Fortune's Most Powerful Women list.
Thank you so much for reading In The Money. I would love to hear your feedback and please share this with a few friends you think would find this interesting. Have a lovely weekend 💜
I’m Marianne, an early-stage VC based in Stockholm. You can reach me by replying to this email, or find me on Twitter or LinkedIn.