Goldman invests in tech; PayPal lowers its profit forecast

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Wall Street Journal

Dream team
Goldman Sachs and the U.K.’s Standard Chartered are part of “an unlikely coalition” behind a $40 billion “technology megafund” sponsored by SoftBank Group. Other investors include Apple Inc. and Kazakhstan’s government.

“Some of its partners see an investment as the price of admission to SoftBank’s ecosystem of companies and are eager for the business they can dole out. Goldman Sachs hopes to get hired on the initial public offerings of the fund’s portfolio companies, while Standard Chartered is keen to lend to them.”

A little pessimism
PayPal’s stock dropped more than 6% in after-hours trading Wednesday after it lowered its full-year profit expectations despite a 56% rise in second quarter earnings. CEO Dan Schulman said partnerships it had signed with banks, financial institutions and other technology companies were materializing slower than it had expected three months ago. In addition, “a deal for the company to bring its services to MercadoLibre users in Latin America hasn’t been completed, and a partnership with bill-payment company Paymentus Corp. is taking longer than executives previously thought.”

Clearing the decks
Judy Shelton, who President Trump said he would nominate for a spot on the Federal Reserve Board, has resigned her post as U.S. envoy to the European Bank for Reconstruction and Development. The paper reported last week that Shelton “had built a spotty attendance record at the London-based development bank’s board meetings. Between April 2018, when she was sworn in, and June 5, Ms. Shelton missed 12 of 28 board meetings.” She blamed her absences on “scheduling conflicts.”

Apologies
Justin Sun, the Chinese cryptocurrency entrepreneur who paid $4.6 million in a charity auction to have lunch with Warren Buffett, apologized for “excessive self-promotion” after he postponed the meal, which was supposed to take place Friday. “I feel deeply ashamed of my excessive self-promotion as well as my penchant for hyping up things,” Sun said.

Financial Times

Stepping aside
Metro Bank chairman and co-founder Vernon Hill is stepping down after the U.K. bank revealed that customers had pulled £2 billion of deposits from the bank in the first half following an accounting error that forced the bank to raise capital. The bank said it is searching for an “independent” chairman to replace Hill, who will stay on as a non-executive director.

“Mr. Hill’s departure comes after months of pressure on the lender, which opened its doors in 2010 with a pledge to revolutionize the British banking industry by offering better levels of customer service with branches open seven days a week.”

Metro Bank said its deposits had fallen to £13.7 billion from £15.7 billion at the beginning of the year. It blamed the drop on “intense speculation at the time of the capital raise” and was “primarily driven by a limited number of commercial customers withdrawing” their cash. It said deposits have been growing again the past two months.

Quotable

“I’m not leaving. I would never leave at a low point. Think of me as a founder that plays a different role from a non-executive director. Back seat is not a word they use for me very often, but I’m very happy to have an independent chairperson with skills that complement mine.” — Metro Bank chairman and co-founder Vernon Hill, who is stepping down in favor of a new “independent” chairman

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