Another Bubble?

Airbnb’s latest financing round is being led by private equity firm General Atlantic, and includes Hillhouse Capital Group, a Chinese fund manager, and Tiger Global Management, which just led a big $80 million financing for Postmates. The deal is expected to be officially announced today, Monday, June 29.

Questions:
1. What is a “private IPO”?
2. What is Airbnb and what does the company do?
3. What is Airbnb’s track record on profits and what is the company’s projected profit for this year?
4. What potential hurdles does the company face?

Source:

CNN Staff. (2015). ‘Crazy money’ – Airbnb valued at over $25 billion. CNN Money, June 27 (Retrievable online at http://money.cnn.com/2015/06/27/technology/airbnb-funding-valuation-update/)
Proxy fight

A Bizarre Story: Watch what you say!

A man having a colonoscopy sued two doctors and their practices for defamation and medical malpractice last week, after he found that his cell phone had recorded a most horrific “trash talking” event during his procedure, as well as evidence of a falsified diagnosis. In the trial, the jury ordered the anesthesiologist and her practice to pay the patient $500,000.

Questions:
1. While this trial paid the patient damages, do you think that the medical board should intervene with disciplinary action also, and if so what type of action?
2. How should the practice record the journal entry for the $500,000?
3. The jury awarded the man $100,000 for defamation — $50,000 each for the comments about the man having syphilis and tuberculosis — and $200,000 for medical malpractice, as well as the $200,000 in punitive damages. Explain the legal terms that are bolded.

4. What type of ethical oaths apply to the medical profession? Are they similar to the accounting profession? Explain.

Source:

Jackman, T. (2015). Anesthesiologist trashes sedated patient — and it ends up costing her. The Washington Post, June 23 (Retrievable online at http://www.washingtonpost.com/local/anesthesiologist-trashes-sedated-patient-jury-orders-her-to-pay-500000/2015/06/23/cae05c00-18f3-11e5-ab92-c75ae6ab94b5_story.html)

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More Woes in Greece

Greece will close its banks on Monday to try to avert financial collapse. The anticipated closure is expected to last about a week. This temporary decision was made along with keeping the stock market closed on Monday after the European Central Bank said it would not expand an emergency loan program to prop up Greek banks. The government has been trying to reach a new debt deal with international creditors.

Questions:

1. In 2013, what other country took similar measures as Greece is doing to avoid a bank collapse?
2. In a short paragraph, explain why this run on the banks is happening.
3. Approximately how much does Greece owe to the European Central Bank and the IMF?

Source:

Thomas, L. and N. Kitsantonis. (2015). Greece Will Close Banks to Stem Flood of Withdrawals. The New York Times, June 28 (Retrievable online at http://www.nytimes.com/2015/06/29/business/greek-debt-crisis-european-central-bank.html?_r=0)

Shaking up Pricing

Because the costs of health-care are rising, along with higher insurance deductibles and co-pays, the way medical services are being delivered is changing.
unlike hospital ERs and urgent care centers, retailers, such as grocery and drugstore chains, who operate in-store clinics are displaying pricing information upfront for consumers paying cash.

Questions:
1. What are the benefits of these types of delivery changes for consumers?
2. What are the benefits of these types of delivery changes for physicians?
3. What is the current growth projection of these types of retail clinics for 2016?

Source:

Harris-Taylor, M. (2015) Clinics in stores, cash-only doctors shake up pricing. The Toledo Blade, June 22 (Retrievable online at http://www.toledoblade.com/Medical/2015/06/22/Clinics-in-stores-cash-only-doctors-shake-up-pricing.html)

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Unlimited Data Slowdown at AT&T

The FCC accused AT&T of improperly slowing down Internet speeds for customers who had signed up for “unlimited” data plans and imposed a $100 million fine on June 17.

Questions:
1. How long has this practice been impacting customers?
2. Has the company violated FCC rules for similar issues prior to this current one?
3. Why has this action come at a particularly bad time for AT&T?
4. Discuss the costs/benefits and legitimacy of this practice in managing networks.

Source:
Fung, B. (2015). AT&T just got hit with a $100 million fine after slowing down its ‘unlimited’ data. The Washington Post, June 17 (Retrievable online at http://www.washingtonpost.com/blogs/the-switch/wp/2015/06/17/att-just-got-hit-with-a-100-million-fine-after-slowing-down-its-unlimited-data/?hpid=z1)

Uber: Employees or Contractors?

The California Labor Commission has found that a driver for Uber in San Francisco is an employee of the company.

Questions:
1. Why is this such a nightmare for Uber?
2. Discuss how this will change the company’s accounting system and business model if this ruling is upheld and the costs involved.
3. The article talks about the 1099 economy and the importance of addressing this issue. In a paragraph, explain the term 1099 economy and why this case is so important. Give examples of other industries.

Source:
Griswald, A. (2015). A California Labor Ruling Just Said an Uber Driver Is an Employee. That’s Uber’s Worst Nightmare. Slate.com, June 17
(Retrievable online at http://www.slate.com/blogs/moneybox/2015/06/17/uber_drivers_ruled_employees_by_california_labor_commission.html)

New Study on Hospital Costs

Twenty of the 50 U.S. hospitals that charge the most for their services are located in Florida — and all but one of them are for-profit, according to a study released Monday.

Questions:
1. Which facility is at the top of the list for charging the most and how many times more do uninsured patients pay as compared to insured patients?
2. Which corporations operate most of the for-profit hospitals on the “price gouging” list?
3. To determine the size of markups, researchers used what Medicare allows for the costs of care. What factors do these costs include?

Source:
Sun, L.H. (2015). 50 hospitals charge uninsured more than 10 times cost of care, study finds. The Washington Post, June 8 (Retrievable online at http://www.washingtonpost.com/national/health-science/why-some-hospitals-can-get-away-with-price-gouging-patients-study-finds/2015/06/08/b7f5118c-0aeb-11e5-9e39-0db921c47b93_story.html?hpid=z3)


College a Commodity?

Unfortunately, most everyone now evaluates college in purely economic terms, thus reducing it to a commodity like a car or a house. There is now a cottage industry built around such data.

Questions:
1. According to the author, what does the value of a degree depend upon and why should it be set apart from strict economic evaluations?
2. According to the author, What factors contribute to educational outcomes, thus differentiating it from a Best Buy purchase?
3. Discuss this statement: Education is the only commodity for which satisfaction decreases with the amount consumed. Do you agree or disagree? Use examples in your answer.

Source:
Rawlings, H. (2015). College is not a commodity. Stop treating it like one. The Washington Post, June 9 (Retrievable online at http://www.washingtonpost.com/posteverything/wp/2015/06/09/college-is-not-a-commodity-stop-treating-it-like-one/?tid=trending_strip_4)
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Beware of Convenience Checks!

he price of tapping credit through a cash advance, which lets people borrow from their credit cards by writing a check or withdrawing money from an ATM, is much steeper than it would be for a traditional credit purchase. It’s also much harder to avoid fees when a cash advance is involved.

Questions:
1. What is the average amount of interest charged for a cash advance?
2. If you do take a cash advance, what advice does Matt Schulz, a senior analyst for CreditCards.com. give?
3. Besides interest, what extra amounts do credit card companies typically charge for cash advances?

Source:
Marte, J. (2015) The danger behind the ‘convenient checks’ you’re getting in the mail. The Washington Post, June 3 (Retrievable online at http://www.washingtonpost.com/news/get-there/wp/2015/06/03/the-danger-behind-the-convenient-checks-youre-getting-in-the-mail/?tid=hpModule_a2e19bf4-86a3-11e2-9d71-f0feafdd1394&hpid=z14)
convenience checks

The More Things Change, The More They Stay the Same

Walmart’s board elected a new chairman at its annual stockholders’ meeting last week. As only the third chairman in the retail giant’s history, the post was passed on to a member of the founding Walton family.

Questions:
1. What type of background does Mr. Penner have that will be beneficial in this post?
2. Why has Walmart’s board been criticized?
3. What were some of the resolutions presented at the shareholders’ meeting and why didn’t they pass?

Source:
Tabuchi, H. (2015). Walmart Board Elects New Chairman. The New York Times, June 5 (Retrievable online at http://www.nytimes.com/2015/06/06/business/walmart-annual-shareholder-meeting.html?module=WatchingPortal&region=c-column-middle-span-region&pgType=Homepage&action=click&mediaId=thumb_square&state=standard&contentPlacement=2
&version=internal&contentCollection=www.nytimes.com&contentId=http%3A%2F%2F
www.nytimes.com%2F2015%2F06%2F06%2Fbusiness%2Fwalmart-annual-shareholder-meeting.html&eventName=Watching-article-click)

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