JPM - JPMorgan Chase & Co.
126.90 +0.58 (0.46%)
After hours: 7:45PM EST
| Previous Close | 132.16 |
| Open | 131.00 |
| Bid | 126.70 x 800 |
| Ask | 126.86 x 1000 |
| Day's Range | 125.59 - 132.23 |
| 52 Week Range | 98.09 - 141.10 |
| Volume | 20,789,849 |
| Avg. Volume | 10,162,824 |
| Market Cap | 389.386B |
| Beta (5Y Monthly) | 1.14 |
| PE Ratio (TTM) | 11.78 |
| EPS (TTM) | 10.72 |
| Earnings Date | Apr 13, 2020 |
| Forward Dividend & Yield | 3.60 (2.72%) |
| Ex-Dividend Date | Jan 02, 2020 |
| 1y Target Est | 139.58 |
- Reuters
JPMorgan executives say bank is big enough to weather any storm
At its annual investor day in New York, management offered updates on JPMorgan's four main business lines but did not upgrade profit targets – signaling an expectation of slow, steady growth over the medium term. JPMorgan has spent much of the last decade capitalizing on healthy markets and strong customer demand to prepare for hard times, Chief Executive Jamie Dimon said. As executives spoke, major stock indexes were falling on concerns about the coronavirus epidemic.
- Bloomberg
JPMorgan Warns Investors It May Get Walloped by Climate Change
(Bloomberg) -- JPMorgan Chase & Co, long a target of public scrutiny for its relationship with the fossil-fuel industry, is getting more serious about the impacts of the climate crisis.The bank’s annual regulatory report added “climate change” as a risk factor, saying it could hurt operations and customers. Risks including prolonged droughts or flooding, increased frequency of wildfires, rising sea levels and altered rainfall could “prompt changes in regulations or consumer preferences, which in turn could have negative consequences for the business models of JPMorgan Chase’s clients,” the company wrote in the filing.The added disclosure comes a day after JPMorgan vowed to stop financing coal-fired power plants unless they’re using carbon capture and sequestration technology. The bank also won’t provide project financing for new oil and gas developments in the Arctic.Environmental activists have been pressuring the biggest U.S. bank to divest from the fossil-fuel industry and have called on shareholders to remove Lee Raymond, the longtime climate skeptic who previously ran Exxon Mobil Corp., from the lender’s board.Chief Executive Officer Jamie Dimon, another target of environmentalists, has said climate change will be solved with government policy.“I’ve always thought it was a problem,” Dimon said at the bank’s investor day earlier Tuesday. “We should acknowledge the problem and start working on it.”Financial firms often include dozens of disclaimers about potential risks in their annual 10-K filings, but JPMorgan’s have typically focused on those more directly related to the economy, regulation and competition. Meanwhile, economists at the firm have been warning clients about the potential for climate change to threatenthe global economy and even the human race.To contact the reporter on this story: Michelle F. Davis in New York at mdavis194@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, David Scheer, Dan ReichlFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Business Wire
JPMorgan Chase Files Form 10-K for the Fiscal Year Ended December 31, 2019
JPMorgan Chase & Co. (NYSE: JPM) ("JPMorgan Chase" or the "Firm") has filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2019 with the SEC. The report is available on the SEC's website at https://www.sec.gov and will be available on the Firm's Investor Relations website at www.jpmorganchase.com/investor-relations under SEC & Other Filings.
- American City Business Journals
Donation expands Alamo Colleges' PROMISE
JPMorgan Chase & Co. (NYSE: JPM) has donated $250,000 to pay tuition for 15 students participating in the city of San Antonio's NXT Level program to attend the Alamo Colleges District this fall through the AlamoPROMISE program. The AlamoPROMISE launched in fall 2019 and originally intended to provide free tuition to high school seniors graduating in 2020 from 25 participating high schools. One such student is Faith Wanamaker, a single mother who in 2009 learned about NXT Level from San Antonio municipal court judge Christine Lacy.
Investing.comStocks - Wall Street Extends Losses; CDC Warns Virus Spread 'Might be Bad'
By Yasin Ebrahim
- MarketWatch
JP Morgan Chase — the oil industry’s bank of choice — will withdraw support for some fossil fuels
JP Morgan Chase will end or phase out loans to some fossil-fuel interests, namely Arctic drilling and coal mining, but the funding of big oil firms by the world’s largest financier of fossil fuels still chafes environmentalists.
- Reuters
JPMorgan restricts Italy business travel on coronavirus concern - memo
JPMorgan has restricted business travel to and from Italy to prevent the spread of coronavirus, according to a memo sent to EMEA employees and seen by Reuters. The Wall Street bank said all trips to Italy would require line management approval. It also said that staff based across Europe, the Middle East and Africa (EMEA) who had returned from northern Italy in the last 14 days and had displayed flu-like symptoms would need to work from home.
- Bloomberg
JPMorgan Eyes Plan to Break Stigma of Fed’s Discount Window
(Bloomberg) -- A senior JPMorgan Chase & Co. executive said the largest U.S. bank planned to borrow funds through the Federal Reserve’s emergency lending facility in an exercise designed to break the stigma attached to a program that can scare investors and spark political attacks.Jennifer Piepszak, JPM’s chief financial officer, said Tuesday the bank would borrow from the so-called discount window from time to time this year and had discussed the plan with regulators.“We think this is an important step for us to take to break the stigma here,” Piepszak said during the firm’s investor day in New York.The remarks come less than three weeks after Randal Quarles, the Federal Reserve’s vice chairman for banking supervision, spoke of the need to make it easier for banks to access emergency lending from the Fed.Window LiquidityThe Fed’s discount window is meant to provide emergency liquidity to banks that otherwise have healthy balance sheets. In a cash crunch, banks can pledge collateral to the Fed in return for cash.Banks have become extremely reluctant to use the facility because of the reaction it can provoke among investors, who may fear it reveals a more serious problem, and among politicians keen to attack taxpayer-funded bank bailouts.Fear of tapping the discount-window stigma worsened substantially after the Fed was ordered by the Supreme Court in 2011 to disclose the identity of institutions that had accessed the facility during the financial crisis of 2007-09. The court decision resolved a lawsuit brought by Bloomberg LP, the owner of Bloomberg News. Congress separately mandated that the Fed identify borrowers after a lag.That’s worried policy makers, who fear temporarily troubled banks won’t come to the Fed for cash as the lender of last resort when market conditions demand it.“The discount window is meant to be used by healthy banks when it is needed,” Quarles said in a Feb. 6 speech. “While there has long been discussion about how the discount window is ‘broken’ because of stigma about using it, we know it is still an important part of firms’ contingency planning and preparations.”Quarles also discussed in his speech how improving access to the discount window could help enhance money-market liquidity by reducing the demand among banks to hold excess reserves parked at the Fed. That demand contributed to a shortfall of lending by banks into overnight funding markets in September, forcing the Fed to boost reserves with purchases of Treasury bills.By making Treasuries more substitutable for reserves while still meeting liquidity requirements, Quarles’ plan might encourage banks to hold more Treasuries and fewer reserves.Joseph Abate, a money-market strategist at Barclays Plc, wrote in a Feb. 12 note to clients that the Fed could help overcome the long-standing stigma attached to the facility by making it “significantly more attractive” for banks to pledge Treasuries for cash through the discount window.(Updates with additional discount window history in seventh paragraph.)\--With assistance from Michelle F. Davis and Alexandra Harris.To contact the reporters on this story: Christopher Condon in Washington at ccondon4@bloomberg.net;Shahien Nasiripour in New York at snasiripour1@bloomberg.netTo contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Alister Bull, Ana MonteiroFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
JPMorgan, Goldman Expand Trading Lead as Europe Retreats
(Bloomberg) -- The biggest U.S. stock- and bond-trading firms are expanding their lead over smaller competitors, partly by grabbing market share from struggling European banks.JPMorgan Chase & Co., the top fixed-income trader, posted the largest market-share increase for that business in 2019, while Goldman Sachs Group Inc.’s big gains on the equities side brought it within striking distance of No. 1 Morgan Stanley, according to data compiled by Bloomberg.JPMorgan’s cut of the $84 billion market for trading bonds, currencies and commodities rose by close to a percentage point in a market that expanded 7% overall. Goldman’s share of the $48 billion pool of revenue generated from investors’ bets on stocks and related derivatives surged by 1.5 percentage points, the biggest gain by far in a market that shrank 10%.At its annual investor day on Tuesday, JPMorgan highlighted market-share gains in the trading business and investment-banking unit. The firm’s global market share in trading has risen by 2.5 percentage points in the past four years, according to the company’s presentation.U.S. banks grabbed market share from their European rivals for a second year, filling in the top four spots of both sets of rankings and pushing the U.S. share of total trading revenue in the 16-bank universe to 59% from 56% in 2017. European firms’ share dropped to 35% from 38%.“The dominance of the large-cap U.S. banks remains intact,” owing in part to economies of scale, analysts at Credit Suisse Group AG said in a note earlier this month.A handful of Europe’s biggest banks made some gains. Credit Suisse increased its share in both equities and fixed-income trading in 2019, recovering from market-share losses a year earlier.Deutsche Bank AG, which held top-four rankings in both markets early last decade, lost more ground in both. The German bank shut its equities-trading division in the middle of 2019 as part of a multiyear restructuring effort.HSBC Holdings Plc saw a sharp drop in fixed-income share, reversing previous gains posted when it was among the few European banks expanding its capital-markets business. The London-based firm is curbing its trading arm and focusing more on Asian business, which will lead to 35,000 job cuts.Concentration in both markets increased as the top two firms now control about a third of each market. The biggest players have benefited from economies of scale, winning more business in recent years at the expense of smaller rivals.European banks have been in retreat for several years as they restructure to focus on their most profitable units. Anemic growth in the region coupled with negative interest rates and a long list of scandals at many of the big banks have crippled those efforts, making it difficult for them to regain lost ground to North American or Asian rivals.(Adds comment from JPMorgan in fourth paragraph. An earlier version of this story corrected figures in third and fifth paragraphs.)To contact the reporter on this story: Yalman Onaran in New York at yonaran@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson, Daniel TaubFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Reuters
JPMorgan gets busy in repo lending after regulatory thumbs up -CFO
JPMorgan Chase & Co is putting more cash into overnight lending markets and holding less for a rainy day, after discussing the matter with regulators, the bank's finance chief said on Tuesday. The change in approach comes months after a squeeze in short-term lending markets led the U.S. Federal Reserve to step in and provide funding. JPMorgan executives had complained that capital requirements prevented the bank from financing such loans itself, but regulators have since eased up, Chief Financial Officer Jennifer Piepszak said.
- Zacks
JPMorgan to Gain from Expected Recovery in Mortgage Business
JPMorgan (JPM) is expected to benefit from signs of a recovery in its mortgage business in the near term.
- MarketWatch
Financial stocks bounce slightly, but Treasury yields extend decline
Financial stocks appeared set for a light bounce Tuesday, after the previous session's drubbing, although Treasury yields continued to fall to fresh lows. The SPDR Financial Select Sector ETF gained 0.4% in premarket trading, after falling 3.3% on Monday, as the yield on 10-year Treasury note fell to a 3 1/2-year low on the back of concerns over how the global spread of COVID-19 could hurt the economy. Among the more active bank stocks in Tuesday's premarket, shares of J.P. Morgan Chase & Co. slipped 0.1%, Bank of America Corp. gained 0.4%, Citigroup Inc. tacked on 0.4% and Wells Fargo & Co. rose 0.7%. On Tuesday, the 10-year yield declined 1.1 basis points to 1.366%. Declining longer-term yields can crimp bank profits as they can narrow the spread banks earn on longer-term assets that are funded with shorter-term liabilities. Meanwhile, futures for the Dow Jones Industrial Average rose 104 points, or 0.4%.
- Investing.com
JPMorgan Stock Falls 3%
Investing.com - JPMorgan (NYSE:JPM) Stock fell by 3.04% to trade at $128.14 by 13:51 (18:51 GMT) on Tuesday on the NYSE exchange.
- Bloomberg
JPMorgan Sees a Mortgage Revival After Years of Quiet Losses
(Bloomberg) -- A year ago, JPMorgan Chase & Co. had just set a U.S. banking profit record, but the leaders of one of its most quintessential businesses were far from riding high.“Early 2019 was a depressing time for a lot of us,” Robert Segnini, head of retail and consumer direct mortgage underwriting, told employees at an internal town hall this month. “There was no real path forward, and we didn’t see a way to make money into 2020.”The company had hemorrhaged about $850 million in 2018 originating home loans through its retail channel, Segnini said, according to people who heard the remarks. Last year, cost cuts and a drop in interest rates helped spur a recovery, allowing executives to privately predict that 2020 would finally mark a comeback.“We could go from, over a two-year period, losing almost a billion, to breaking even, to kind of making $300-plus million,” Segnini said. “The economy is working for us in 2020. How do we capitalize on that and have a blockbuster year?”With interest rates and unemployment at rock-bottom lows and home values rising, the part of JPMorgan’s retail business that sells home loans to consumers -- either when they walk into a branch, or when they call in or apply online -- made money last month, marking the first profitable January in five years, the people said, asking not to be identified discussing internal numbers.The bank’s home-lending business sits within the consumer bank and is comprised of three parts: mortgage originations, mortgage servicing and portfolios of real estate loans kept on the bank’s books. As a whole, the home-lending unit has been profitable every year for at least five years, according to company spokeswoman Trish Wexler, who declined to discuss origination earnings. JPMorgan reports revenue for the business, but not profits and losses.‘Feel Great’“Our strategy has been clear over the last five years -- to build a high-quality, lower-risk business for this really important product for our customers,” Wexler said in an email. “We feel great about our progress and are exactly where we want to be now. We’ve built a solid foundation with great digital experiences that we’re deploying at scale. We have all the elements in place now to make us optimistic about 2020 and beyond.”The bank said in a presentation for its investor day Tuesday that it was “focused on reducing our origination costs” and that it already cut expense per loan by 18% last year.Still, the past weakness in origination reveals the extent of the bank’s struggles in a business that has repeatedly drawn the ire of Chief Executive Officer Jamie Dimon. Clumsy regulation has made it harder for banks to lend and costlier for aspiring homebuyers hoping to get into the market, Dimon has said in speeches and letters to shareholders. JPMorgan’s economists estimated that a “properly designed” lending industry could have generated more than $1 trillion in additional loans, Dimon said last year.“Because of these significant issues, we are intensely reviewing our role in originating, servicing and holding mortgages,” he wrote in his letter to shareholders last April. “The odds are increasing that we will need to materially change our mortgage strategy going forward.”More BusinessDespite the increasing complexity and cost, banks have historically justified staying in home lending, saying it brings in other business.Signs of a turnaround have come as a surprise to people internally, who, as late as last year, expected origination to remain unprofitable into 2020. At last year’s investor day, Mike Weinbach, the unit’s CEO at the time, said a smaller origination market and increased digitization had put pressure on margins and raised the cost of originating loans.“In light of this challenging environment, we’re being intentional in our positioning across the business,” said Weinbach, who’d run the business since 2016 and left last month for a job at competitor Wells Fargo & Co. He was replaced by Mark O’Donovan.A year later, executives are basing their expectations on cost cuts and optimism that the lowest mortgage rates in three years will spur more homeowners to refinance, a trend that buoyed earnings in last year’s second half, the people said. Banks’ origination businesses tend to benefit when rates go down, while their servicing operations do better when rates go up. The two are seen as hedges against each other.Volume RisesMarianne Lake, who’s been overseeing all of consumer lending since May, has been imparting a simple strategy to middle managers: cut costs and sell more home loans to customers who already have a primary banking relationship with the bank, according to people familiar with the strategy.JPMorgan originated $51 billion of home loans through its retail channel last year, an increase of 33% and the first time since 2016 volume has risen. Including mortgages through correspondent channels, in which the bank buys loans from other lenders, the total rose 32% to $105.2 billion.Still, its market share of originations is anemic for the nation’s biggest bank, amounting to just 5% in the past quarter, according to data compiled by Bloomberg. That compares with a peak of 25% in 2006.JPMorgan was hardly alone in pulling back. Across the banking industry, complex regulations and tougher capital rules after the financial crisis put the squeeze on what was once a major profit center. As the biggest banks scaled down operations and pulled back from riskier corners of the market in response to regulatory scrutiny, non-bank lenders like Quicken Loans Inc. and PennyMac Financial Services Inc. elbowed their way in.Losing MoneyThe big banks have struggled to shift costs amid a decline in volumes, and don’t originate as many mortgages through government programs, which tend to be more lucrative, said Jim Cameron, senior partner at Stratmor Group, a mortgage-industry advisory firm.“It’s like driving a supertanker -- large banks have significant overhead and they’re not as nimble as smaller non-bank lenders,” Cameron said.By 2018, as rates were rising, the cost to originate a mortgage for the average large bank through retail channels had risen to a record $13,628 per loan, figures from Stratmor show. Big banks lost $4,803 for every mortgage they originated and sold directly to consumers that year, while non-banks generated a profit of $376 per loan.A lack of marketing focus, inability to quickly pivot when the market changes and ineffective technology spending have all resulted in big banks not doing as well as they should, according to Stratmor.Emulating QuickenQuicken has charged past almost every U.S. mortgage provider with the help of flashier technology, like its online Rocket Mortgage platform.JPMorgan has been looking to emulate Quicken’s efficiency and digital expertise, according to people familiar with internal thinking. The bank has been using technology to automate and digitize its home-loan business to cut costs and appeal to more customers. In the second half of 2018, it rolled out a digital platform for mortgages aimed at reducing paperwork and expediting the loan process.Next, the bank wants to use everything it knows about its customers’ income, assets and spending habits to be able to target them with personalized, pre-approved offers for home loans. JPMorgan also has been outsourcing some processing jobs to lower-cost locations outside the U.S., the people said, with the goal of ensuring the bank can handle an uptick in origination volumes while keeping costs low.(Adds cost reduction figure in eighth paragraph.)To contact the reporter on this story: Michelle F. Davis in New York at mdavis194@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, David ScheerFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Benzinga
JPMorgan To Launch Korean Boy Band BTS' Label IPO
JPMorgan Chase & Co. (NYSE: JPM ) and NH Investment and Securities are expected to be in charge of one of the largest IPOs in the South Korean entertainment industry. What Happened Big Hit Entertainment, BTS' ...
- Bloomberg
IHS Hires JPMorgan, Citi for Record African IPO in U.S.
(Bloomberg) -- Wireless towers operator IHS Holding Ltd. has hired banks to oversee what may be the biggest initial public offering of an African company in the U.S., according to people with knowledge of the matter.IHS Holding has selected Citigroup Inc. and JPMorgan Chase & Co. as global coordinators for a listing that could value Africa’s largest operator of wireless towers at as much as $7 billion, said the people. The Mauritius-based company is leaning toward a New York IPO which could happen as soon as the first half of the year, they said.While Citigroup and JPMorgan have top spots on the IPO, other lenders will likely be added to the syndicate, said the people, who asked not to be identified because the information is private. No final decisions have been taken and the timeline could be pushed back, depending on market conditions.Representatives for IHS, Citigroup and JPMorgan declined to comment.The company would prefer a U.S. listing to London in part because some of the largest tower companies such as American Tower Corp. and Crown Holdings Inc. are based there and trade at higher valuation multiples, the people said. At a valuation of up to $7 billion, it would be the biggest listing of an African company in the U.S., according to data compiled by Bloomberg.IHS, whose owners include Goldman Sachs Group Inc and South African wireless carrier MTN Group Ltd., started reviving work on a share sale late last year after scrapping plans back in 2018 due to uncertainty around a presidential vote in Nigeria, its main market, Bloomberg News reported at the time.With operations in Nigeria and other African countries, IHS was seeking to raise about $1 billion in New York, people familiar with the matter said at the time. A Nigerian court last year upheld President Muhammadu Buhari’s election victory, dismissing a challenge by the main opposition candidate.The company expanding its network of about 24,000 towers as growing African populations demand cheaper and faster mobile connections. It tapped the debt market for $1.3 billion last year.The company plans to enter new markets in the Middle East and Southeast Asia to bulk up ahead of a potential attempt to sell shares in either New York or London, Chief Executive Officer Sam Darwish said in an interview in April last year.\--With assistance from Swetha Gopinath and Archana Narayanan.To contact the reporters on this story: Dinesh Nair in London at dnair5@bloomberg.net;Myriam Balezou in London at mbalezou@bloomberg.net;Loni Prinsloo in Johannesburg at lprinsloo3@bloomberg.netTo contact the editor responsible for this story: Dinesh Nair at dnair5@bloomberg.netFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Skift
United May Still Lag Delta, American on Loyalty Revenue Even After New Credit Card Deal
When the first airlines launched loyalty programs almost 40 years ago, they intended to do what you would expect — to keep customers from defecting to the competition. But over the past two decades, many programs have become independent business segments that generate massive cash for the corporate parent through agreements with banks that market […]
- Reuters
JPMorgan raises clean energy spending goals, profit targets unchanged
The largest U.S. bank will target $200 billion in lending and other financial services for green and sustainable companies and projects, up from an earlier target of $175 billion set in 2017, according to a presentation ahead of its annual investor day. The new target, however, failed to satisfy some climate-change activists who flocked outside JPMorgan's New York headquarters, partially blocking some entrances and demanding that the bank get rid of fossil-fuel clients. At the investor meet, Chief Financial Officer Jennifer Piepszak said she was confident that the bank's near to medium-term growth would be backed by a robust U.S. economy, despite some near-term headwinds.
- Reuters
K-pop sensation BTS' label picks JPMorgan, others for IPO - media
Big Hit Entertainment, the music label of South Korean boy band BTS, has chosen JPMorgan , NH Investment and Securities and others to handle its initial public offering (IPO), according to media reports. The IPO could be one of the largest in years in the country's entertainment industry, with its total valuation expected to be as high as 6 trillion won ($5 billion), the reports said, citing industry sources.
- Reuters
K-pop sensation BTS' label picks JPMorgan, others for IPO: media
Big Hit Entertainment, the music label of South Korean boy band BTS, has chosen JPMorgan , NH Investment and Securities and others to handle its initial public offering (IPO), according to media reports. The IPO could be one of the largest in years in the country's entertainment industry, with its total valuation expected to be as high as 6 trillion won ($5 billion), the reports said, citing industry sources.
- Reuters
JPMorgan Chase plans to unveil climate initiatives at investor day
JPMorgan Chase & Co executives plan to announce new climate-change initiatives on Tuesday, including restrictions on financing coal mining and Arctic drilling, as well as a $200 billion target to provide financing for sustainable projects. JPMorgan said on Monday that it would detail the initiatives at the bank's investor day.
- Bloomberg
Inside the Seething Boardroom Drama That Poisoned HQ Trivia
(Bloomberg) -- Before HQ Trivia ran out of money earlier this month and abruptly shut down, the once-promising startup appeared to be on the brink of a dramatic victory. It had an acquisition offer from a media company called Whistle. The deal would have given HQ the cash it desperately needed to keep the lights on. Whistle was still doing its due diligence, but it already knew that HQ Trivia had been declining in popularity in recent months. It was familiar with the company’s history of managerial infighting, and it was aware of the shocking death of its 34-year-old co-founder from a drug overdose.Then, earlier this month, Whistle pulled out unexpectedly. HQ’s board members were blindsided, according to two people close to the company who asked not to be identified discussing private conversations. The company’s chief executive officer, Rus Yusupov, sent an email to its 25 employees on Valentine’s Day, telling them they were losing their jobs.That day, users got a bitter push notification on their phones. “HQ is live,” it read. “Just kidding. We’re off-air indefinitely.”The story of how one of the most promising companies in entertainment got to this point is a singular example of a clever idea derailed by what former employees describe as mismanagement and seething boardroom drama. In 2018, the New Statesman declared that “HQ Trivia—not Netflix—is the real future of television.” This year, by the time it was talking to digital video maker Whistle about a deal, HQ parent Intermedia Labs was on the verge of not being able to pay out promised prize money, people familiar with the company said.In nearly a dozen interviews with former employees, industry experts and others close to the startup, a portrait emerged of a company whose problems ran deeper than has been previously reported. In Silicon Valley, it’s not uncommon for good ideas to be stymied by managerial dysfunction. But HQ displayed a degree of personal animosity between staff and management—and among managers themselves—that’s rare even by tech startup standards. Yusupov, his board members and key employees all declined requests for comment. Most people who agreed to speak requested anonymity in order to protect their relationships, and prospects of getting another job in the industry.Now, the company is fighting for a second chance. On February 18, four days after declaring HQ was over and out of money, Yusupov tweeted that a new buyer had emerged. People familiar with the situation also say that a deal is close, though not finalized, and could become official as soon as early this week. Still, some who worked at the startup remain skeptical that HQ will ever make a comeback.Its most famous former employee, quiz show host Scott Rogowsky, tweeted a post-mortem for the company the day after it shut down. “HQ didn’t die of natural causes,” he wrote. “It was poisoned with a lethal cocktail of incompetence, arrogance, short-sightedness & sociopathic delusion.”On paper, the guys who founded HQ Trivia made a pretty good team. Yusupov and Colin Kroll had previously created Vine, the short looping video company. It became a force on the internet, minting now-famous influencers like viral provocateurs Jake and Logan Paul and musician Shawn Mendes. Vine was acquired by Twitter in 2015 for $30 million.But that integration into Twitter proved to be the first major setback for the promising duo. Kroll and Yusupov were both fired from the company at different times, Recode later reported. And, according to allegations that eventually surfaced in the media, Kroll made some of his female colleagues there uneasy with “creepy” behavior. In a statement to Axios, Kroll would later apologize for “things I said and did that made some feel unappreciated or uncomfortable,” and deny sexually harassing anyone. An investigation conducted by HQ’s board would also find his behavior fell short of harassment. The Twitter tie-up came to an end in October 2016, when the company shut down the service.By that point, though, Kroll and Yusupov had earned a reputation as online video whiz kids, and they found support for their next project, a live video app called Hype. Lightspeed Venture Partners invested $8 million to get the company off the ground, Recode reported. Lightspeed partner Jeremy Liew praised the company in a Medium post partly titled “Founders Matter,” which lauded pioneering social media entrepreneurs. “When these founders move on, they tend to see success again in their next venture,” he wrote. Hype didn’t find an audience. Neither did the company’s other ideas for a DIY game show or a celebrity baby photo-matching game. But before long, Yusupov and Kroll struck internet oil. HQ Trivia launched in August 2017 with a glitchy app, but almost immediately, it was a sensation. The game, an interactive mobile trivia show, was fun to play—and people of all ages found it addictive. When the live broadcast of the show would come on each day thousands of people stopped what they were doing to look at their phones and try to answer the game’s 12 questions correctly for cash prizes. Within months hundreds of thousands of players would tune in for the company’s daily show. But by mid-December of 2017, just months after its launch, trouble was already brewing for the company. HQ was struggling to raise money thanks to a reputation for “womanizing” that Kroll had left behind at Twitter, Liew said in a statement at the time to media outlets including Businessweek. Concerned by investors’ reticence, Liew, who was on the HQ board, launched an investigation into the allegations. He concluded that Kroll hadn’t been popular at Twitter, but that he didn’t harass anyone.As questions percolated about HQ’s management, its trivia app’s growth continued unabated. In February, the company scored a Super Bowl commercial, cementing its position as a staple of popular culture. The month after, the company raised $15 million in a funding round led VC firm Founders Fund. In a statement accompanying the funding announcement, Kroll said he was “let go” by Twitter from his role at Vine for “poor management,” and apologized for past behavior. HQ’s valuation climbed to $100 million.The high point for HQ Trivia came in March 2018, when almost 2.4 million people tuned in to try and win a $250,000 prize sponsored by Warner Bros. to promote its upcoming movie, “Ready Player One.” Dwayne “The Rock” Johnson made an appearance the next month, reaching a slightly smaller audience, and the game continued to book major sponsors like Nike Inc., Alphabet Inc.’s Google and JPMorgan Chase & Co.Despite the star power, in 2018 HQ Trivia was starting to slip in the App Store rankings. It went from consistently landing in the top five slots in the “games” category in the U.S. App Store at the beginning of the year, to 188th place on July 1, according to App Annie.The key problem was that HQ wasn’t innovating, according to conversations with former employees. As people got bored with the main game, the company had little else to offer them. The stagnation wasn’t necessarily for a lack of ideas. Starting in 2018, the company discussed lots of additional shows including a “Judge Judy”-like program, and one based on “Family Feud,” people familiar with the company said. A dating show idea got far enough along that the company even made a pilot, they said, but it never launched.Yusupov was more interested in building out HQ’s flagship product than launching new ones, former employees said. Several people also said that Yusupov, a talented designer and creative thinker, could be erratic—alternating between bursts of frenetic activity and long periods of inaction. One employee recalled how once, hours before a game was supposed to drop, Yusupov asked to cut the number of winners from 5,000 to 500. Another former staffer remembered Yusupov personally overseeing the details for a game, even as larger issues like cash burn loomed at the company.A representative for Yusupov declined requests for comment. In a conversation with the Wall Street Journal in 2019, he said, “I’ve always welcomed and appreciated candid feedback. I’m evolving as a leader and will continue to do so.”That spring, Kroll contemplated leaving HQ altogether. His relationship with Yusupov had been rocky since the allegations and subsequent fundraising struggles. "I have a lot of ideas left," he said in a text message to a friend reviewed by Bloomberg. "And I don't want to make them w/Rus."At the office, Yusupov and Kroll continued to sit next to each other. But their mutual dislike had become so intense that one person familiar with the dynamic recalled that instead of speaking, they would sometimes Slack employees messages for each other.In August 2018, some members of HQ’s four-person board of directors felt the company needed a change in leadership, Recode reported. Liew and Kroll wanted Kroll to replace Yusupov as CEO. “We’re trying to diversify a bit, and that’s where my skill-set comes in handy,” Kroll would later tell tech site Digiday. Yusupov, however, didn’t want to give up his job, according to people with knowledge of the dynamic at the time.Displacing a CEO, even with another co-founder, is a seismic event for a startup. “Removing the founder more often than not is like ripping out the heart of the company,” Carol Liao, assistant professor of law at the University of British Columbia, wrote in an email. To add to that, investors doing the ousting are also risking becoming known as unfriendly to founders. "If that becomes your reputation, you're in trouble," said Brandy Aven, associate professor of organizational theory, strategy, and entrepreneurship at Carnegie Mellon University.HQ’s board consisted of Liew, Kroll, Yusupov and Founders Fund’s Cyan Banister, who had joined earlier that year in the $15 million funding round. In the standoff between Kroll and Yusupov, Banister didn’t want to pick a side. (Founders Fund boasts on its website that it “has never removed a single founder.”) So she left the board to avoid the decision. That left Yusupov outnumbered 2-to-1. He was demoted. Before Kroll’s ascension to the CEO spot was announced, though, an employee filed a complaint about him to human resources, Recode first reported. The complaint, which accused Kroll of “inappropriate and unprofessional” management, was elevated to the board and leaked to the press. In an indication of the brewing mistrust at the company, Kroll suspected the leak could have come from Yusupov’s camp, according to text messages reviewed by Bloomberg.The complaint did not derail Kroll’s appointment, but the transfer of power solidified the long-gestating enmity between the founders. Yusupov felt betrayed that Kroll and Liew took away his job, people familiar with the situation said. Kroll thought Yusupov had tried to sabotage him in the press. He confided in a friend that he was considering firing his co-founder, and texted, "Feel like I should stop talking to Rus.”Then, just months after Kroll took over, HQ suffered its most shocking setback. In mid-December 2018, the company threw its annual holiday party. Kroll left the event and ordered drugs through an on-demand delivery service in New York City called Mike’s Candyshop, according to reports at the time. After taking the drugs with a girlfriend in his apartment late that night, the next day police found Kroll dead in his bed. The autopsy found heroin, cocaine and fentanyl in his body. Six men were arrested for running the drug service that provided the lethal substances, news reports said.Kroll’s death stunned HQ’s staff—and thrust Yusupov back into the unofficial role of CEO. That unsettled some employees. A few said they feared the company would slip into a state of inaction they believed had characterized Yusupov’s tenure as CEO. So several staffers—including the face of the company, quiz show host Rogowsky—started circulating the idea of drafting a letter demanding that the board replace Yusupov, according to multiple people familiar with the matter. A sizable number of HQ’s employees added their names.Liew was made aware of the letter before he ever received it. A hasty, all-staff meeting was called in February 2019, with Liew and other board members in attendance. At the meeting, the assembled staff was told that the board had hired a search firm to help HQ Trivia find a new leader. In the meantime HQ’s top engineering exec, Ben Sheats, and the company’s head of production, Nick Gallo, would share the CEO role with Yusupov, according to several former employees who were at the meeting. Liew also said that once Yusupov’s replacement was found, he would step down as board member, yielding his seat to his Lightspeed colleague, Merci Grace.But the new CEO never came. HQ spoke to a number of candidates in 2019, and got close on a few, but ultimately failed to hire anyone, according to people familiar with the discussions. Shortly after the February all-hands meeting, Rogowsky, by far HQ’s most visible employee, left for another job.By late summer of last year, it was clear that HQ needed an influx of capital, or new ownership, in order to survive. The number of downloads were down, and the company laid off about 20% of its staff in July, TechCrunch reported. The board hired Watertower Group, a boutique investment and advisory firm, and set out to explore their options, according to two people familiar with the arrangement. Watertower Group did not respond to requests for comment.In November, the company began talks with Whistle, formerly known as Whistle Sports, about an acquisition. Whistle makes digital shows for platforms like YouTube, IGTV, Snapchat Discover and the video section inside Facebook Inc., called Watch. HQ Trivia’s late attempts at new games, including HQ Tunes for music trivia launched in December 2019, had failed to take off. But it wasn’t hard to see how the company's offerings might fit into Whistle’s broader content strategy.HQ’s board expected the deal to close in mid-February, then Whistle pulled the plug, according to people familiar with the startup’s thinking. The botched acquisition meant HQ no longer had the money to sustain operations, Yusupov tweeted. The one-time media darling suddenly, abruptly shuttered.In a statement, a spokeswoman for Whistle confirmed that the company had had conversations with HQ as part of its broader growth strategy. “We will continue to look for the right growth opportunities,” she wrote. HQ’s demise was not exactly surprising. Since the start of this year, HQ Trivia had not cracked the top 1,000 in the rankings of top games in the U.S. App Store, according to App Annie. Still, its closure marked one of the most dramatic tumbles from grace in recent tech history. “With HQ we showed the world the future of TV,” Yusupov tweeted. “Thanks to everyone who helped build this and thanks for playing.”While the game is over for the foreseeable future, the world has likely not heard the last of HQ. The company will be the focus of a new podcast from sports and entertainment outlet, the Ringer. And a group of former employees is currently shopping a documentary-style video series to a number of well-known streaming services, according to people familiar with the discussions. The group includes former host Rogowsky—but not Yusupov—the people said.Meanwhile, HQ is still seeking a reprieve. After the Whistle deal fell through, Yusupov and HQ’s board spent the weekend calling around in search of another buyer, according people familiar with the situation. Now, the people said, a deal is being negotiated and is expected to close in the coming days, but is still not official.The hope is that this new buyer will pay enough for HQ to at least deliver severance for employees and prize money for players, people familiar with the matter said, if not fund a return to glory for the app.Several people with knowledge of the discussions declined to comment on who the new buyer was, citing a fear of upending the deal. But that didn’t stop Yusupov from sharing last week that something is in the works. “We have found a new home for HQ, with a company that wants to keep it running,” he tweeted Tuesday. “Not a done deal yet, but I’m optimistic.”(Updates with context in the 31st paragraph. An earlier version of this story corrected the month of the app's first launch.)\--With assistance from Sarah McBride.To contact the author of this story: Kurt Wagner in San Francisco at kwagner71@bloomberg.netTo contact the editor responsible for this story: Anne VanderMey at avandermey@bloomberg.net, Mark MilianAndrew PollackFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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Warren Buffett and the Problem of Executive Compensation, Pt. 1
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