Weekly Briefing No. 160 | Stripe learns an ugly lesson about U.S. politics

jonas-leupe-425132-unsplash.jpg

Welcome to The FR, where we never accept suspect payments.

In this edition:

  • Stripe and the ugly side of U.S. politics

  • A conversation with Wall Street Horizon CEO Barry Star

  • What do Jurassic Park and housing have in common?

  • 50 ways to leave your lender

  • How dogs can help fight cancer

NEWS

Stripe gets an ugly lesson about U.S. politics.

On July 4th, 2015, Stripe co-founder John Collison tweeted a photo of former Governor (now Energy Secretary) Rick Perry riding a motorcycle, without a helmet on, set against the American flag. The caption for this rather notable image was, “Sometimes people ask me why I came to America.” It remains unclear to us whether Collison had a fascination with Perry himself or the idea that in Texas, you can ride your hog without a helmet if you meet certain criteria.

In the months following Collison’s tweet, Stripe (which is now worth $22.5 billion) went on to work with several Democrats and Republicans running for president in 2016, generating millions of dollars of fees in the process. In a Forbes article from that period, Collison seemed to revel in the political donations processing niche, asserting that by using Stripe, campaigns could avoid hiring staff to handle the payments.

But now, thanks to a report this week that the Manhattan U.S. attorney’s office has been probing Stripe’s role in processing suspect payments made to the Trump inaugural committee, Collison may not be feeling as high on the hog about US politics. Indeed, in his home country of Ireland, political contributions are strictly regulated and limited in size. But in the U.S., inaugural committees have increasingly become cesspools for influence peddling (Page 21).

CEO INTERVIEW

Talking data with Wall Street Horizon’s Barry Star. (Excerpt)

Data is perhaps the most important commodity in today’s world. Indeed, some have posited that data is the new oil. This is especially true in financial services, where firms have access to a massive amount of data, but often struggle to glean actionable insight and information out of that.

We recently spoke with Barry L. Star, CEO of Wall Street Horizon, a provider of corporate event data for institutional investors and traders, about how investors can use data to find alpha and gain a competitive edge.

Tell us about Wall Street Horizon.

We are a data provider to Wall Street. We provide data around when public companies have corporate and public events – such as earnings calls –  and we track when they happen and make them available to our clients. For example, if you’re a buy-side asset gatherer and you manage a billion dollars of assets, you need to keep track of everything that is happening with the companies you invest in or may invest in. You can spend all your time reading news articles, company websites, press releases and the like, or you can work with a data provider like us. In addition to providing information on when events are scheduled, we also provide our clients with further information they can use to inform their investing strategies – such as if someone spoke at an investor conference about a new product that is coming out.

GUEST OPINION

Jurassic Park in housing.

Common wisdom suggests that home ownership is a good thing, or at least correlates to something positive, which explains the widespread concern about the depressed home ownership rates in the aftermath of the housing crisis. What happened to approximately five million formerly home-owning households as the rate dove from over 69% to under 65%?

As it turns out, many migrated into the single-family rental (“SFR”) market, a $3- to $4-trillion segment that has grown by over a third since home ownership rates reached their apigee, and which, together with its near-neighbor of two-to-four-unit properties, make up over half of the entire residential rental market. This growth in SFR to the departed homeowner class provides evidence of a neutral zone that separates dyed-in-the-wool renters from the confirmed homeowners, filled with consumers who could go either way depending.

TROVE

50 ways to leave your lender.

She said it’s really not my habit to intrude

Furthermore, I hope my meaning won’t be lost or misconstrued

But I’ll repeat myself at the risk of being crude

There must be fifty ways to leave your lender

Written on the back of his divorce papers from his first wife, Paul Simon wrote “50 Ways” to commemorate his fresh start. 43 years ago this past week, that song topped the Billboard 100 and was on its way to its legendary status as one of the all-time great songs in the soft rock genre.  

It popped into our heads this week (with a slight word tweaking) upon reviewing Forbes’ new list of its top 50 innovative fintech names of 2019. Granted, most of the start-ups on the list won’t achieve iconic rock star status. But a few certainly have a shot. However, with just four names on the list looking to supplant traditional lending-related businesses (i.e., Kabbage, Affirm, Tala and Nova Credit), we’re urging the good folks at Forbes to make a new plan for its 2020 roster. Yes, some of the original fintech alt-lenders have faced challenging times, and the fintech charter drama continues, but it is way too soon to count out upstarts looking to convince consumers and small businesses to ditch incumbents.

Indeed, Varo Bank, Marcus and a host of other challenger banks/digital banking subsidiaries look poised to help you drop off the key and get yourself free of painful applications and staid underwriting criteria.

Taking a bite out of cancer.

If you’re like us, you love dogs and hate cancer.  For those like-minded people, we’d highly recommend the a16z podcast below that dives into the topic of canine oncology. Amazingly, about six million dogs per year are diagnosed with cancer. However, because dog health insurance is still a small market, there are only 300 to 400 veterinary oncologists in the country serving that entire population (most pet owners pay out of pocket for veterinary services).

Given that many dogs are beloved as much family members (sometimes even more), the pawcity of investment into canine cancer is pretty shocking. But even if you’re a dog hater, there’s still a good reason you should be rooting for more dog cancer research: There’s no doggy HIPAA. As a result, researchers are able to dig very deep in studying how cancer drugs perform in dogs. According to Amy Abernethy, a newly named deputy FDA commissioner, and One Health’s Cristina Lopes, dogs can, therefore, serve as “living laboratories at scale” for drug research that can enhance understanding of human cancer treatment.

Quote of the Week

“In politics, nothing happens by accident. If it happens, you can bet it was planned that way.”

~ FDR