Starbucks Cards Hold So Much Money The Company Could Be A Midsize Bank

Starbucks is holding on to more than a billion dollars of customer money that hasn't been spent on drinks or desserts or overpriced coffee paraphernalia — it's just sitting there.

In the first quarter of 2016, Starbucks was keeping about $1.2 billion for its customers between money pre-loaded onto cards and the company's app, the coffee giant told The Wall Street Journal. If Starbucks were a bank, that amount of deposits would make it a respectable midsize institution. 

An astounding number of customers eschew dollars for money on card and the app. Between the U.S. and Canada, 41 percent of transactions at retail locations involved a Starbucks card, and 24 percent involved the mobile app, according to Marketwatch.

For comparison purposes, PayPal, which holds $13 billion of its customers' money, dwarfs the coffee chain. Then again, transferring cash is PayPal's sole purpose, not a strategy to get customers to stay loyal to a certain brand of burnt coffee. Compared with the prepaid card company Green Dot (the institution behind Walmart's MoneyCard), which has $560 million in customer funds, Starbucks holds more than twice the cash of its competitor.

Starbucks cards, in other words, are big business. 

Wall Street Journal Ads Call Out The Paper’s Bias On Climate Change

Beginning Tuesday and running until the end of the Republican National Convention in July, the most widely circulated print newspaper in the United States will run a series of ads calling out its own bias against climate change.

The ads are being paid for by a group calling itself the "Partnership for Responsible Growth" and will run twice a week on The Wall Street Journal's Op-Ed page, a place long inhospitable to any sort of science-based climate pieces.

(The Journal's climate change denial isn't just limited to the opinion pages, either: A 2015 study conducted by researchers at Rutgers, the University of Michigan and the University of Oslo found WSJ rarely mentions the threats posed by climate change, and, when it does, tends to downplay them.)

Pool via Getty Images

Rupert Murdoch, Chairman of the News Corporation, which owns the Wall Street Journal.

The Journal did not immediately respond to a request for comment.

The first advertisement, published Tuesday, recalls comments made by Exxon Mobil CEO Rex Tillerson in 2012 in which he acknowledged "that increasing CO2 emissions in the atmosphere is going to have ... a warming impact," and as a result we would see shifting weather patterns impact crop production and rising sea levels.

"If the CEO of the world’s largest oil company accepts the basic physics that humans are heating the climate with excess CO2, why won’t the editorial board of this newspaper?" The ad asks, rhetorically. "Isn’t it about time?" 

Other topics in the series include a basic primer on the physics of CO2 and how it affects the atmosphere, how rising sea levels might impact the world's major cities, statements from military leaders who see climate change as a "threat multiplier," and more.

If the CEO of the world’s largest oil company accepts the basic physics that humans are heating the climate with excess CO2, why won’t the editorial board of this newspaper?

“The Wall Street Journal is the nation’s largest and most influential newspaper,” former Rep. Walt Minnick (D-Idaho), a co-founder of the Partnership, explained in a release. “What business and Republican leaders are unlikely to have read on its opinion pages is neither the latest science, nor that there is a bipartisan, business-friendly way to combat climate change. If The Journal won’t cover it, we will.”

Last December, in response to the historic climate change agreement in Paris, the WSJ's editorial board sneered, "if climate change really does imperil the Earth, and we doubt it does, nothing coming out of a gaggle of governments and the United Nations will save it."

In sharp contrast to The Journal, last month the editorial board of the Financial Times, a competing publication, predicted the oil industry is facing "a future of slow and steady decline."

"Instead of railing against climate policies, or paying them lip-service while quietly defying them with investment decisions," the FT's editorial board wrote, "the oil companies will serve their investors and society better if they accept the limits they face, and embrace a future of long-term decline."

CORRECTION: An earlier version of this story said the Partnership for Responsible Growth's ads target the Journal's reporting. If fact, they are meant to call out the paper's editorial board. 

Walgreens Is Walking Out On Scandal-Struck Theranos

Things just got much worse for Theranos.

On Sunday, pharmacy giant Walgreens abandoned the embattled blood-testing startup accused of failing to deliver accurate results with its tests. The move came roughly nine months after The Wall Street Journal exposed major problems with the company's technology, which claimed to be able to run more than 240 blood tests using just a drop of blood. 

"We have carefully considered our relationship with Theranos and believe it is in our customers' best interests to terminate our partnership," Brad Fluegel, Walgreens' senior vice president and chief health care commercial market development officer, said in a statement. 

The announcement strikes yet another major blow against Theranos, the 13-year-old startup that once boasted former Secretaries of State Henry Kissinger and George P. Schultz as board members.

Nearly two weeks after the Journal published its exposé, the U.S. Food and Drug Administration said tiny vials Theranos used to collect patients' blood were not approved medical devices. In January, Walgreens suspended sending tests through Theranos' California laboratory, sparking a standoff between the two companies. According to a February report in the Financial Times, lawyers for Theranos believed there was "little legal basis for terminating the partnership." But the damage was already done. 

“They’ve been unhappy with the relationship and it’s really a question of working through the contractual and legal arrangements,” an unnamed person familiar with the matter told the FT of Walgreens' position. “They’re not interested in the Theranos deal.”

In March, federal regulators proposed banning Theranos founder and CEO Elizabeth Holmes from the blood testing industry for two years. 

"Quality and safety are our top priorities and we are working closely with government officials to ensure that we not only comply with all federal regulations but exceed them," Brooke Buchanan, a Theranos spokeswoman, wrote in a statement on Sunday. "We are disappointed that Walgreens has chosen to terminate our relationship and remain fully committed to our mission to provide patients access to affordable health information and look forward to continuing to serve customers in Arizona and California through our independent retail locations."

It's unclear how much the deal was worth.

By backing out of the partnership, Walgreens puts Theranos' finances in further jeopardy. Two weeks ago, Forbes downgraded the company's value from $9 billion to $800 million. In doing so, the magazine -- whose lists evaluating the world's richest people and companies are considered the most definitive measure of wealth -- valued Holmes' net worth at about nothing. 

"At such a low valuation, Holmes' stake is essentially worth nothing," reporter Matthew Herper wrote in a report announcing the reassessment. "Theranos investors own preferred shares, which meanes they get paid back before Holmes, who owns common stock." 

Holmes was previously valued at about $4.5 billion. 

Gawker Media Files For Bankruptcy

Gawker Media has filed for Chapter 11 bankruptcy protection.

The filing lists the company's assets as between $50 and $100 million and says its liabilities are between $100 million and $500 million.

Gawker is currently appealing a $140 million verdict in favor of former professional wrestler Hulk Hogan, who sued the company for invasion of privacy. In 2012, Gawker published excerpts of a video showing Hogan, whose real name is Terry Bollea, having sex with the wife of his then-best friend. Last month it was revealed that Silicon Valley billionaire Peter Thiel was personally financing Hogan's lawsuit.

In a statement Friday afternoon, Gawker said it had reached an asset purchase agreement with media company Ziff Davis, but other bidders can offer a higher price as the company goes through an auction supervised by a bankruptcy court. 

The Ziff Davis bid is reportedly between $90 to $100 million, according to The New York Times.

Gawker Media's statement: pic.twitter.com/Ntf37UnUlP

— Ben Mullin (@BenMullin) June 10, 2016

"In the event we become the acquirer, the additions of Gizmodo, Lifehacker and Kotaku would fortify our position in consumer tech and gaming. With the addition of Jalopnik, Deadspin and Jezebel, we would broaden our position as a lifestyle publisher," Ziff Davis told employees in a memo announcing the agreement.

The bankruptcy filing is an effort to prevent the company from having to pay out the $140 million in damages, Recode reported.

New York Attorney General Eric Schneiderman defended the New York-based outlet on Twitter.

Freedom of the press is a cornerstone of our nation. Like them or not, sad to see NYC media giant @Gawker forced to the brink.

— Eric Schneiderman (@AGSchneiderman) June 10, 2016

Bollea, meanwhile, expressed gratitude.

What a beautiful day,and the good doesn't prevent the better! In the present I AM always grateful,only good happens to me. HH

— Hulk Hogan (@HulkHogan) June 10, 2016

Chapter 11 bankruptcy is a legal remedy that a distressed business can pursue to restructure its debts in the hopes of saving itself. A bankruptcy judge supervises a plan to make the company financially viable again, including renegotiating its debts.

The company can continue to operate as normal while seeking bankruptcy protections, but it must get the court’s permission for some decisions.

Many large corporations, such as American Airlines, have successfully emerged from Chapter 11 bankruptcy.

Crucially for Gawker, filing for Chapter 11 triggers a stay on all litigation, meaning the company would not have to worry about paying the $140 million penalty or defending against other lawsuits while they go through the process. That could give the company the time and resources it needs to prepare its appeal.

And if Gawker Media fails to reach an agreement with its creditors during bankruptcy, it could be liquidated entirely, which would likely also result in a significant reduction in the payment Bollea receives.

For these reasons, the status of being in bankruptcy actually strengthens Gawker's bargaining position against Bollea. It is "very likely" Bollea will settle for a lower payout during the bankruptcy period, posited John Pottow, a bankruptcy law professor at the University of Michigan.

CEO Nick Denton, a former Financial Times and Economist reporter, founded Gawker Media in 2002. The group now owns eight different websites, including Deadspin, Jezebel and Gizmodo. The sites receive a combined 64 million monthly readers in the U.S.

"Attracting fans and critics alike for their inimitable delivery of news, scandal, and entertainment, the Gawker Media properties are heralded as everything from 'deliciously wicked' to 'the biggest blog in the world,'" the brand's website reads.

The company has built a reputation of calling out public figures for their misdeeds. That approach has led some to accuse it of "spewing hatred" and "bullying," Gawker editors wrote this week in a piece that defended the outlet's "lengthy published record of news, essays, investigations, satire."

Gawker sold a minority stake to investment company Columbus Nova Technology Partners in January, in part to raise money for the lawsuit.

This is a developing story. Check back for details.

Michael Calderone, Willa Frej and Daniel Marans contributed reporting.

How Clothing Designer Eileen Fisher Came To Embrace The Masculine

Sometimes growing a brand means rethinking your leadership style.

Eileen Fisher ran into this problem as her eponymous clothing line approached $300 million in annual revenue. The company grew so big that she recently realized she needed to revise how it's run.

Fisher spoke to The Huffington Post's executive editor for impact and innovation, Jo Confino, at the Sustainable Brands conference in San Diego this week in the video below.

The clothing brand founder talked about the difference between what she called masculine and feminine leadership styles (around the 5:40 mark). Her company has recently become more masculine, she said.

"The feminine is more listening and receptive kind of mode. And I feel like that has sort of helped me hear others, and work with others, and create a collaborative and intuitive kind of environment," she explained. 

"I think we've done really well with this sort of feminine model, but we've kind of hit a point where we're too big almost and we need more structure. I never use the word 'structure' -- and 'strategy.' Those are sort of masculine words to me," Fisher said. 

By dubbing the two management styles masculine and feminine, Fisher noted that she didn't mean to suggest they align with actual gender: There are masculine and feminine traits in everyone. The masculine side values efficiency, she said.

Lately, Fisher said, the company has brought in more men. One man in particular started talking about the differences between masculine and feminine leadership styles. She said she hadn't thought about management that way before. 

"I always saw things moving organically and fluidly and intuitively and all of that. But now we have to be efficient and we have to be effective and we have to be focused and we have to make decisions more clearly," Fisher said. "And we have to have more definition." 

Parents Say Panera Gave Allergic Girl Peanut Butter In Her Grilled Cheese

A Boston-area family is suing Panera Bread, claiming their highly allergic 5-year-old daughter was given two dollops of peanut butter in her grilled cheese sandwich despite repeated warnings to the restaurant of her allergy.

In a lawsuit filed against the chain last week, John and Elyssa Russo of Natick, Massachusetts, claim their daughter had to be hospitalized overnight after the family ordered a meal online on Jan. 28, The Boston Globe reports.

The Russos say they specifically noted their daughter's peanut allergy on the online order form, and so were mystified as to why the extra ingredient had been added to her meal.

“Is this somebody doing this on purpose?" John Russo later asked a manager at the Natick Panera, in his own telling. "Because it’s two freakin’ tablespoons of peanut butter on this sandwich and it’s a grilled cheese."

The Russos didn't realize there was peanut butter in the sandwich until the girl had already bitten into it. She vomited and broke out in hives later that evening, the family says.

Scott Olson/Getty Images

A restaurant manager reportedly apologized for the mistake and blamed it on a "language" issue.

Russo said the manager apologized for the mistake and blamed it on a “language” issue.

A Panera spokesman declined to comment directly on the suit when reached by The Huffington Post Monday.

"Panera takes the issue of food allergens, including the reported incident at our franchise bakery-cafe, very seriously,” the spokesman said in an email. “We have procedures in place across the company to minimize exposure and risk for our guests and associates. We do not comment on pending litigation."

The suit was filed in Massachusetts' Middlesex County Superior Court on Thursday.

This Enlightened CEO Takes Every Friday Off And You Should, Too

Just in time for summer comes more evidence that the four-day workweek is good for your work and personal life.

The boss of a Vancouver-based company describes in The Wall Street Journal how he was close to total burnout five years ago. Then he made a decision that changed everything: He would take Friday as a "free day" and not work.

Brian Scudamore, who is chief executive and founder of home services company O2E Brands, also decided to designate Mondays as "think days," when he works from home and takes no meetings. 

But taking off on Friday was the most important thing he did, Scudamore writes in the article. "[Fridays are] days where I do what I love -- skiing with my children, cooking, learning languages and biking," the 40-year-old says. "When I’m away from the office, things have time to marinate. Connections bubble up and often turn into big, business-changing ideas."

Scudamore's company encourages employees to set their own schedule, too, O2E brand publicist Sarah Gray told The Huffington Post. "We can pick our own schedule -- come in when we want and leave when we want. It's not a culture of 'clock watchers,' " Gray said in an email. "We're more about setting/achieving our goals than we are about hammering home a 9-5 workweek."

O2E

CEO Scudamore out biking and not working.

There's loads of research out there that demonstrates that working longer hours is bad for your health. Working more means that there's less time to exercise, de-stress and sleep, among other things. And that causes real, physical damage. Those who work more than 55 hours per week have an increased risk of stroke compared to those who work less than 40 hours, according to a major analysis of studies that NYMag.com's Science of Us blog cites.

"Overwork and the resulting stress can lead to all sorts of health problems, including impaired sleep, depression, heavy drinking, diabetes, impaired memory, and heart disease," said Sarah Green Carmichael in Harvard Business Review last year.

Long hours are particularly hard on the health of lower-income workers, research shows. They already have more stress just coping with the anxiety of making ends meet and are even more vulnerable to the health risks that overwork brings on.

Overworked, unhealthy employees also cost companies more to insure, are absent more often and their work isn't that hot either.

Though your boss may think that working longer hours is a sign you're working super-hard and productively, the truth is managers don't often haven't a clue about who is really productive. You can't judge someone's performance by how frequently they're spotted at their desk.

The higher-ups at one consulting firm had no idea that some of their best workers were only pretending to put in 80-hour workweeks, according to a widely cited study from Erin Reid, a professor at Boston University's business school.

Scudamore says that taking Fridays off has helped him think more creatively. Anyone who's ever had an amazing idea while in the shower or just taking a walk can surely relate to this. 

And it's not just knowledge workers who see benefits from working less. A century ago, Henry Ford cut worker shifts in his automobile plant to eight hours from nine (and doubled their pay) -- and business boomed. 

Some companies are already on board with the  notion of a shorter week. Basecamp, a Chicago-based software company, does four-day work weeks in the summer. A design firm in Indiana is only open Monday through Thursday because its founder believes his workers are more motivated, according to a piece in CNN Money. The article says that about 14 percent of small companies offer employees a chance to work a compressed four-day week.

If you're at a company who hasn't yet seen the light, feel free to send a link to this piece to your boss. Good luck. (Yes, I wrote this on a Friday, but I do plan to leave early. Baby steps.)