Dropbox Shares Offered At 34% Discount In Secondary Market - Daily Business

Dropbox CEO and co-founder Drew Houston.

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Dropbox, the cloud storage startup facing questions about its $10 billion valuation, is expected to authorize a sale of its common stock at a 34% discount to its most recent round of private funding, according to documents obtained by BuzzFeed News.

The shares, to be sold by shareholders on the so-called secondary market, have been priced at $12.60 each. Yet, in January 2014, in its Series C round of funding, Dropbox sold shares to big investors at $19.10.

The deal is being handled by EquityZen, a company that allows startup employees and others to sell stock in closely held tech startups whose shares aren't publicly traded. EquityZen says on its website that all of its deals are approved by the companies whose shares are being sold.

While Dropbox itself is not the seller, the previously unreported transaction will likely be seen as setting a market price for the startup's stock.

Representatives of Dropbox and EquityZen declined to comment.

Dropbox, founded in 2007 and based in San Francisco, has faced skepticism from investors over its $10 billion valuation, amid a frosty climate for highly valued startups in general. Last fall, The Information reported that two of the startup's mutual fund investors had marked down their shares by a little more than 20%. Later, a third mutual fund company marked down its shares by 51%.

Valuing privately held startups is a tricky business, since their shares rarely change hands. Dropbox investors tend to look to Box, a publicly traded cloud storage company, as a point of reference. Box's shares have fallen 47% from the closing price after their trading debut in early 2015.

Any investors in the Dropbox deal won't be buying shares directly. They'll purchase an interest in an EquityZen fund that is expected to buy the common shares, according to the documents. Investors, who must be wealthy enough to be considered "accredited" in the eyes of regulators, have until April 5 to commit to buying shares. BuzzFeed News could not determine how many shares are being offered for sale.

These investors will be at a significant disadvantage compared with the institutional investors that have provided Dropbox with capital. The EquityZen documents pitching the investment do not contain any confirmed information about Dropbox's financial health.

Instead, the documents cite information from outside parties, like the data provider Crunchbase and the news sites Business Insider, VentureBeat, and TechCrunch.

"All figures are publicly reported unless noted otherwise," a disclaimer reads. "When not reported by the company or any of its representatives, financial information may not have been verified by the company."

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The $1000 Burrito Dan Miller

This is a guest post by Jodey Smith.  He is a Podcast Coach, Producer, and Consultant.  You can learn more him on his website.    You can also follow him on Twitter. Honesty compels me to confess that I had never listened to a single episode of this guy’s podcast. Yet there I was sitting in a Chipotle parking lot trying to decide if I would go inside and meet him. It all started a few years back when I began...

The post The $1000 Burrito appeared first on Official Site Dan Miller.

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The McDonald’s Model Goes On Trial - Daily Business

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In courtroom 238 in New York’s Federal Plaza this week, McDonald's executives testified publicly for the first time about shop-floor and top-level operations of their global franchise operation.

The legal case against the company, now being heard before the National Labor Relations Board, could up-end the existing fast food franchise model for all casual chains in the United States. McJobs are having their day in court.

What's specifically at stake: whether McDonald's corporate is responsible for labor conditions at restaurants that bear its name.

Since 2012, cooks and cashiers at the burger chain have protested for better pay and working conditions, while filing hundreds of charges of unfair labor practices before the country's highest labor board.

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The workers say they experienced illegal retaliation — firings or discriminatory treatment by managers — as a result of the strikes and walkouts. The Service Employees International Union, the country's largest union for service workers, helped prepare the charges and pay the workers' legal fees.

Now the labor board's lawyers argue that McDonald's USA is equally liable — with franchise operators — for the alleged retaliation. The company denies responsibility, its lawyers arguing that McDonald's does not substantially control the day-to-day of line cooks, cashiers and drive-through workers.

But if the board's arguments win the day — or the months, as the trial is likely to stretch on — low-wage, first-rung workers could potentially unionize and bargain collectively with McDonald's as a result. That could in turn set precedent for the approximately 4.7 million people who work serving food and beverages in the United States to leapfrog franchise owners and negotiate with corporations themselves.

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On Wednesday, McDonald’s USA’s vice-president of U.S. franchising, Troy Brethauer, took the stand for his third day of testimony. He fielded questions on his familiarity with store-level layouts and alleged retaliation against workers.

Brethauer denied, as he did in previous testimony, granular knowledge of on-the-ground operations, saying he had not seen floor plans of stores, nor was he personally involved in the hiring, firing, or decision-making related to specific store employees.

The NLRB's general counsel has requested about 350 documents and business records from the company and has a long list of witnesses still to call, as the trial will move to two other cities before returning to New York for McDonald's HQ to argue its defense.

Beyond the trial, fast food workers continue to strike and march, most recently outside the Republican and Democratic debates. Thanks to the prompting of the protesters, the candidates, too, have been answering tough questions about wage and hour standards in low-wage jobs in America.

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Chipotle Gave Away More Than 3 Million Burritos To Prove They're Safe - Daily Business

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Chipotle handed out around 3.5 million free burritos to prove their food was safe amid health concerns and to make its restaurants less "eerie" to customers, the chain's executives said Wednesday.

After outbreaks of norovirus, salmonella, and E.coli at Chipotle locations all around the country last year, sales tanked and the company closed all locations on February 8th to have an all-employee safety meeting.

The revamped safety guidelines were accompanied by an ongoing massive marketing push centered around sending out coupons for free burritos. Mark Crumpacker, Chipotle's chief creative officer, said at a Bank of America Merrill Lynch conference that the company had expected the promotion to "go viral" and that 2.5 million would redeem the coupons.

Over about five hours, he said, 5.3 million people requested coupons, and about two thirds of them actually used them — "an extraordinarily high number." Crumpacker said that Chipotle was planning on sending out 21 million pieces of direct mail, and that between six and 10 million had already been sent out.

Hartung said that another benefit of the coupons was that it made Chipotle locations — many of which were nearly empty before the Center for Disease Control declared the E.coli outbreak — feel less “eerie.”

“We also wanted to show that this is what Chipotle looks like and it was kind of eerie, and we've heard this from customers, they would walk by our restaurant and see, God that was always busy and now there is no line whatsover, that's not the case anymore,” Hartung said.

Chipotle's sales are still falling this month, but are starting to climb back this year overall after plunging 40% in January, the company's co-chief executive officer, Steve Ells, added at the conference.

Ells's comments came after Chipotle announced on Tuesday that it was anticipating its first quarterly loss ever as a public company — and that its comparable sales in February had declined 26%.

Comparable sales reached their low in the middle of January, falling about 40% on an annual basis in the middle of the month. Ells said now they got back up to negative 20% at the beginning of March before dipping again after a suburban Boston location closed after employees called in sick on March 8.

"Our teams did an awesome job, they followed the protocol fully. And as a result, they protected our customers and no customers were affected. So, this was a really good thing," he said.

Chipotle put a brave face on what otherwise looks like sobering data, saying in a presentation that a "comparable sales recovery [is] underway." After the Boston area closing, Chipotle chief financial officer Jack Hartung said, "our comps declined..to about (negative) 27%."

Chipotle Mexican Grill / Via file:///Users/matthewzeitlin/Downloads/Chipotle_BAML_Final.pdf

But since Chipotle previewed its quarterly earnings and reported its monthly sales, the company's stock is still down slightly and has fallen over 26% in the last year.

"Our earnings and margins are not going to be very impressive in the short term," Hartung said, pointing not only to the poor consumer perception of the chain, but also supply chain issues introduced by the burrito coupons that led to more food waste, along with higher marketing and legal costs spurred by a Department of Justice investigation into its food safety practices. Ells said that the company has gotten closer to identifying the source of the E.coli outbreak.

"We have many more fresh ingredients in the typical fast-food restaurants. And so, there are potentially a lot of sources for such an incident," Ells said. "We have been looking with the CDC, with our epidemiologist, with food safety experts, with local health departments and nobody initially could identify what the source was. We think we have a pretty good idea, but not definitively are we going to say what it was."

Ells said the changes, despite being costly and time-intensive, have been good not just for the safety of the food, but for how it tastes. "Every single ingredient now that we bring in has been scrutinized, every single cooking technique has been scrutinized and we've made a number of changes and a lot of these changes also have been for the better, I mean the food actually tastes better."

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Fear And Greed In VC Land - Daily Business

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Kellogg Says There Is A Criminal Investigation Into Assembly Line Peeing Incident - Daily Business

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Cereal maker Kellogg said Monday that a criminal investigation has been launched into a video that appears to show a man urinating on a company assembly line.

Kris Charles, a Kellog spokesperson, said in a statement that the video, which appeared on WorldStarUncut.com on Friday, was recorded at Memphis facility in 2014.

The graphic video shows a man urinating in the factory and then pans to a Kellogg's logo. It appears to be shot by the urinating man himself.

Via worldstaruncut.com

Via worldstaruncut.com

Charles said that the products that could have been contaminated "include Rice Krispies Treats, granola clusters used in a couple of products, and a few other puffed rice treats that we no longer make."

Charles said that "any products that could have been potentially impacted would be very limited and past their expiration dates."

The company's stock was down about .5% in early afternoon trading on Monday.

"Food quality is of the utmost importance to Kellogg Company," Charles said. "We are outraged by this completely unacceptable situation, and we will work closely with authorities to prosecute to the full extent of the law.”

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Why Even Wealthy Black Students Have More Student Loan Debt - Daily Business

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For white students, family wealth acts as a shield from the burden of student loan debt, allowing them to start off their careers steps ahead of their peers. But the same isn't true for wealthy black students, according to a new study in the journal Race and Social Problems.

In fact, it's at the top of the wealth spectrum that the disparity between white and black student debt levels is the highest, the study found — a sign that student loan debt could sharply destabilize the black middle class, giving young blacks higher risk without the reward of being able to shield their own children from debt.

The Dartmouth-funded study, "Young, Black, and (Still) In Debt," found that while white youth at the top of the wealth spectrum had much less debt than their low-income and middle-class counterparts, the same wasn't true for black students.

Specifically, white families with a net worth of $150,000 had half as much student loan debt as those with a net worth of zero. But there was no difference in debt between zero net-worth black families and those with $150,000 in wealth. "The racial disparity in debt increases across the wealth distribution, such that black adults from wealthier families are more indebted than their white peers, relative to black adults from less wealthy families," according to the report.

At the root of the disparities are differences not only in income, but also in how black and white families acquire wealth (which includes home equity, savings, and inheritance) and pass it on to their children, the study said. Wealthy white families tend to have the kinds of wealth that are easily liquidated and also easily passed among generations, like stocks, savings, and home equity (which can be accessed in the form of home equity loans, according to the study).

The wealthy black families in the study had only half of the financial assets and less equity in their homes — making them less able to pay down their own debts and contribute readily to their children's educations and living expenses. Though wealthy white families contributed, on average, $12,000 to their child's college educations, wealthy black families gave just $4,200.

The result, the study's authors said, is the possibility that student loan debt could scar the already "fragile" black middle class — forcing young black students to drop out of college at higher rates and making it more difficult for them to acquire their own wealth.

The study shows both "how racial wealth inequalities are created, but also how they are compounded intergenerationally," said Fenaba Addo, an assistant professor at the University of Wisconsin-Madison and one of the study's authors, in a release.

Looking beyond just wealthy families, the Race and Social Problems study also found that sharp gaps among all families that are able to send their children to college: the median net worth of white families in the study was $101,376, while for black families, it was $9,497. On the whole among all income brackets, black students have almost 70% more student loan debt than their white counterparts.

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