BlackRock's new investment management executive Mark Wiseman has reorganized the business with a greater focus on automated investing for its active funds; the changes will focus on the actively-managed equities business and include pricing changes and increased use of computer models for active investment funds; the firm's passive investments have helped it grow assets under management to $5.1 trillion however its active fund performance has lagged and in 2016 reported $275.1 billion invested, a decrease from $317.3 billion three years prior. Source
SeekingAlpha reports on the valuation of Square, Inc. citing several factors that have led to an overvalued stock price of $17.37; the author reports that assumptions on the growth of its customers is overestimated; says it will have difficulty when expanding to higher value customers and internationally also reporting that the business model is at risk to lower cost market competitors; also says that its reliance on Square Capital lending to retain customers and balance attrition of gross payment volume is unlikely primarily due to market competition. Source
Bank of America says it will invest $1.5 million in a Charlotte fintech initiative over the next three years; the investment is the first for the city from a financial services company; regarding the investment, Cathy Bessant, Bank of America's chief operations and technology officer, said: "Charlotte has proven to be a place where a sustainable company can be founded, emerge and grow. Fintech is a significant, new opportunity for Charlotte that connects our strong finance and technology infrastructure with innovatively minded people, creating tech jobs and new paths to economic mobility."; Charlotte Mayor Jennifer Roberts is expected to publicly announce more details on the initiative in the next few months. Source
The US Senate's Banking Committee majority leader says a full reform of Dodd-Frank is unlikely but the Committee will seek to pass targeted reforms; the Banking Committee majority leader also sees larger regulatory changes coming mainly from the independent agencies; the outlook means the Financial Choice Act led by House Financial Services Committee Chairman Jeb Hensarling is also unlikely to be passed in the Senate; "The Choice Act is our omnibus legislation, but we will also reintroduce its component bills," says Hensarling; a previous executive order from President Trump which halts new federal regulations or requires regulators to repeal two rules for every new one issued is also slowing the regulatory process. Source
Androscoggin Bank launched a new online lending platform for small businesses in January to better compete with the market's options for online small business loans; the firm's Fast Response Business Loans Platform was built in partnership with an undisclosed fintech firm and has processed half a dozen loan applications since its launch; its lending criteria is based on credit score, number of years in business and being based in Maine; its interest rates start at 6% and it currently offers credit lines of up to $10,000 and term loans of up to $100,000. Source
Jet Capital is a Dallas-based online lender primarily lending to underserved small businesses; it was launched in 2015 and currently focuses on businesses with 20 or fewer employees; the firm has identified Albuquerque as a growing target market with over 28,000 businesses in its target range; the firm's cash advances average approximately $25,000 and with the payouts, the company also purchases rights to future sales. Source
Robinhood is currently undergoing a new fundraising deal that values the company at approximately $1.3 billion with investment from DST Global; the undisclosed funding will add to previously raised capital of $66 million; the firm offers commission free trading on US stocks and has also launched a premium Robinhood Gold option for faster money transfers and margin trading. Source
Argon Credit has converted its chapter 11 bankruptcy filing to a chapter 7 filing; a judge has ordered Argon Credit to transfer all proceeds and portfolio payments to its largest creditor Fund Recovery Services; the approved claim in the case is $37.3 million and Fund Recovery Services is expected to be fully paid. Source
New York-based hedge fund Marathon Partners Equity Management LLC is actively pushing OnDeck Capital to reduce costs and reach profitability more aggressively than it has already outlined; the firm owns approximately 1.75% of the company's outstanding shares; Mario Cibelli is the primary spokesperson for Marathon Partners and says he contacted members of the board in March to urge for deeper cost reductions and analysis on a potential sale; it is likely that Marathon Partners could gain a board nomination from the discussions; OnDeck Capital could also see more involvement from hedge fund shareholder EJF Capital LLC which has said in public filings that it may also reach out to the company to discuss its future strategy. Source
Carvana has filed for a US initial public offering (IPO) and plans to list its shares on the New York Stock Exchange with the ticker symbol CVNA; the online auto dealership sells its cars from vending machines located across the US; the company is planning to raise $100 million from the IPO and is working with investment bankers at Wells Fargo, Bank of America, Citigroup and Deutsche Bank on the deal; its registration statement reports significant risks including higher public registration costs and profitability uncertainty. Source