Alaska Airlines Giving the Boot to Virgin America Brand; So Not Cool-atta: Frozen Drink Going Away; Disney Can’t Shake Iger. And it Doesn’t Seem to Want to

So long…

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If you’re anything you’re like me, then I bet you look forward to those fun safety videos played on Virgin America flights. But alas, come 2019, those videos might just become a sweet memory as Alaska Airlines plans to retire the Virgin America brand at that time. Apparently, extensive accounting research was done to arrive at this conclusion. That conclusion being that if Alaska Airlines wants to be successful on the West Coast after throwing down $2.6 million to merge/acquire Virgin America, then it would be prudent to stick with one name. And considering that Alaska Airlines is the one paying all that money, it’s only fair, I suppose, that it should get to stick with its own name. Alaska Airlines, however, has promised to keep the mood lighting, music and other features that made Virgin America more fun than other airlines. Virgin America will be joining the not-so-distinguished-anymore ranks of Continental Airlines and US Airways, whose names also used to grace airports all over the country. Once the merger is finalized, Alaska Airlines will have the dubious distinction of being the fifth largest airline in the country.

Just not good enough…

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After much soul-searching and presumably a lot of accounting research – Dunkin’ Donuts is ditching the Coolatta drink that refreshed so many parched palates over the years. The official word on why Dunkin’ Donuts is ditching the beverage is because it “…isn’t good enough.” It doesn’t get more scientific than that. But fear not Dunkin’-lovers, as the donut chain will not leave you empty-handed and un-caffeinated. Enter the “Frozen Dunkin’ Coffee.” Sure the name lacks the “cool” vibe of its predecessor, but its rumored to have a lot more coffee in it. In fact, part of the push for the new beverage has to do with the fact that special new brews are all the rage right now. And naturally Dunkin’ wants to cash in on that momentum. Also be on the lookout for the Dunkin’ Energy Punch and the Caramel Shaved Ice Espresso, among other new offerings. As for social media, plenty of Dunkin devotees didn’t take too kindly to the announcement with one disgruntled Coolatta drinker writing: “@DunkinDonuts getting rid of the coffee coolatta? Are you insane?” Nuff’ said.

So hard to say goodbye…

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Apparently Disney is super pleased with Bob Iger’s performance since the House of Mouse just extended the CEO’s contract until 2019 (when the Virgin America name will be retired. Coincidence? I think not. Really. I don’t) Actually it’s because Disney still hasn’t found a suitable replacement for Iger. The plan was for Iger to only stay on in his post until 2018. But since there’s no heir in the wings just yet, it was thought best to hold onto him until that could be determined. Former Disney COO Tom Staggs was rumored to be the one to fill that role, but then he left, leaving Disney to go back to the drawing board. This is the third time an extension was added to Iger’s contract. And who can blame Disney. Whoever replaces Iger is going to have some massive shoes to fill and will constantly find themselves being compared to a CEO whose leadership the board calls “outstanding.” In fact, under this outstanding leadership for the last ten years, Disney became the first movie studio to hit the $7 billion ceiling for global box office receipts. News of this latest extension sent the company stock up. Which makes perfect sense since during Iger’s tenure, investors took in a 448% return on Disney shares.

Swooshed Out: Nike Losing Ground?; Starbucks Perks Up Hiring Goals; Is the End Near for Sears?

Just not doing it…

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Looks like consumers aren’t doing it for Nike as the athletic apparel company posted some pretty unimpressive numbers for its third quarter. To be clear, Nike didn’t lose money. It just didn’t make as much money as analysts wanted it to. For instance, even though Nike took in $8.43 billion in revenue, a 5% increase over last year, analysts were expecting $8.47 billion this time around. The collective disappointment on Wall Street sent shares down because investors are apparently wondering if the company behind the iconic swoosh can withstand some fierce competition from Under Armour and Adidas. But that wasn’t the only bad news sending shares down today. Nike also said that it expects future orders to be down 4%. Nike did score a profit of over $1.1 billion with 68 cents added to shares, a figure that easily beat analysts’ expectations of 53 cents per share. Last year at this time, Nike took in $950 million with 55 cents added per share, illustrating a very respectable increase. Unfortunately, the bit about the decline on future orders didn’t stop from putting a damper on the fiscal mood on Wall Street.

Well done…

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Starbucks is making headlines today after announcing that it not only hit its goal of hiring 10,000 army veterans and military spouses, but now plans to hire another 15,000. Starbucks had hoped it would achieve that milestone by 2018, but lo and behold, it hit its mark well ahead of schedule and the glowing news was announced during its annual shareholders meeting, much to the delight of…everyone. If you recall, back in February, CEO Howard Schultz – who is stepping down at the beginning of April – managed to annoy more than a few of his coffee drinkers when he announced plans to hire 10,000 refugees globally.  Apparently some folks thought those refugee hirings were in place of hiring veterans and thus began a social media campaign urging people to #BoycottStarbucks.  But alas, that was not exactly accurate and the coffee chain found itself explaining that it intended to hire employees from both groups. And that’s not all. The purveyor of premium coffee also plans on creating another 240,000 jobs worldwide by 2021. Because if you were worried that there weren’t enough Starbucks, the company is planning to open 3,400 new stores, just in the United States. So yeah, it’ll definitely need a few extra baristas.

Throwing in the towel?

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It might just be the end of an era as the 130 year old Sears announced in an SEC filing that “substantial doubts” exist with regard to its future. In other words, the department store is staring at the prospect of bankruptcy, and will end up bringing Kmart with it. What’s a little weird about that news though, is that the company’s fourth quarter results were actually better than expected, albeit, dismal. “Better than expected” here basically means that the retailer didn’t lose as much money in its fourth quarter as it was expected to, at least compared to last year’s fourth quarter. The fact remains, however, that according to eMarketer, of the top 250 retailers, Sears is dead last in terms of performance, as it just can’t compete with the offerings of online retailers. In fact, Sears ate over $5 billion in losses just in the last three years and has already been closing plenty of stores, selling off some of its brands and taken other measures just to stay afloat. Besides that, Sears is having too much trouble with its pension plan obligations which has been also eating up a lot of its cash – $4 billion just in the last twelve years. Add to that its more than $13 billion in liabilities and Sears’ future is looking positively grim.

Show Me the Money! Forbes Unveils Its Annual List of People With Money to Show; UK Shows Google What Happens When You Don’t Shut Down Haters; Twitter Did Something Impressive. Just Not With Its Earnings

Rich-y rich…

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It’s that time of year again. The one where Forbes reminds us just how much money we don’t have relative to the richest people in the world. And here goes. There are 13% more billionaires this year than last year and their combined net worth totals almost $7.7 trillion. Yes. Trillion.  The number one spot goes to Microsoft co-founder Bill Gates who’s net with totals $86 billion. When Gates is not busy fixing the world and explaining to the President why his budget ideas are bad ideas, he runs the world’s largest charitable organization. Naturally, the Oracle of Omaha, Warren Buffet, comes in a close second with a net worth of $75.6 billion, while Amazon’s Jeff Bezos makes his debut into the top three with a net worth of $72.8 billion. And even though we only finally see a woman on this list at the number 14 spot, there’s still some uplifting news. For instance, the number of women who ma∂e it onto the list has increased 170% since 2009. Also, there’s a record 56 women on the list who are self-made billionaires. If you’re curious to see who did and didn’t make the list, click here to find out. And spoiler alert: Perhaps President Donald Trump really ought to consult Bill Gates on any and all future budget concerns for the country, considering he lost a billion in the last year and ranks #544.

Dis-content…

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Just when you thought Google could do no wrong, the search engine giant finds itself in the midst of some major policy revamping after a bunch of big-name advertisers pulled their marketing  – and whole lot of money – because it was showing up on /sexist/hate-filled/offensive/anti-semitic/terrorist-promoting content. The trouble started when major brands, including the BBC and department store chain Marks & Spencer, noticed their ads being being placed alongside content promoting violent extremist groups. Last I heard, department stores were no great fans of terrorism. Now, part of the policy revamp includes broadening Google and YouTube’s definitions of hate speech, which is always a good thing since hate manages to always rear its ugly face no matter how subtly its presented. Also, content won’t be able discrimnate against groups based on their identity, socieo-economic class and country of origin. Such measures ought to make it a tad bit more difficult for the haters to get their odious messages out. In addition to some added controls and a few default settings, Google should end up creating a kinder, gentler platform. Hopefully…

Speaking of which…

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Even though Twitter doesn’t exactly have the fiscal luxury to delete accounts, to its credit, the social media company did just that and put the kibosh on close to 380,000 of them because of their links to terrorism. So lousy earnings aside I say “Kudos” to Twitter.  Those accounts were just the ones it took down between July and December of 2016.  Since August of 2015, over 635,000 accounts have been removed for the same reason. The information was disclosed in its latest transparency report and these actions are part of an effort to weed out extremist groups and other assorted haters. Interestingly enough, almost 75% of the accounts that were removed from Twitter were discovered by technology created just for this purpose for Twitter, while 2% of those accounts came down after governments made requests for the company to get rid of them.

 

Bill Gates Is So Not Into President’s Budget Blueprint; Does Uber Have Some High-Level Job Openings?

Just letting you know…

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Chances are if Bill Gates is not into your budget blueprint, then maybe it’s worth it to make a few (hundred-billion dollar) changes to it.  Which explains one of the reasons why the world’s richest man is in DC today, to have a little chat with the President of the United States.  Bill Gates, who knows a thing or two, isn’t taking too kindly to President Trump’s budget blueprint, particularly the part about cutting foreign aid. Gates is of the very informed and highly researched opinion, that providing foreign aid not only assists the world’s poorest individuals, but it also helps Americans. A lot. Gates said as much in a recent TIME op-ed piece, explaining how foreign aid actually decreases global conflicts, strife and get this…political instability. There’s a joke in there somewhere, but I’ll leave you to make it. Feel free to leave it in the comments. In any case, Mr. Gates went on to say, “These projects [foreign aid] keep Americans safe. And by promoting health, security and economic opportunity, they stabilize vulnerable parts of the world.” I think the philanthropist billionaire/Microsoft co-founder just might be onto something, no?

Outta here…

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As if a lawsuit from Google and claims of sexual harassment couldn’t make things any worse for Uber, things are about to get even more awkward – if that’s possible – with two very high-level execs saying buh-bye to the ride-hailing app. First we have President Jeff Jones, who is leaving after less than a year on the job. It seems that a few weeks ago, Uber CEO Travis Kalanick announced he was seeking new leadership, along with plans to install a new COO. Rumor has it that that bit might have had something to do with Jones untimely departure. In the meantime, Jones explained, in his own special spin that “…the beliefs and approach to leadership that have guided my career are inconsistent with what I saw and experienced at Uber, and I can no longer continue as president of the ride sharing business.” You just know there’s an ugly, yet presumably very juicy story behind that articulate statement. But I guess we’ll just have o wait for the book to come out. Naturally, Uber officially thanked Jones and wished “him all the best” no doubt with the utmost sincerity. The other Uber exit is brought to us by Brian McClendon, who is set to ditch his post of Vice President of Maps and Business Platforms. Mr. McClendon announced plans to return to his native Kansas to pursue a career in politics. He’s apparently very disenchanted with the state of Kansas’ fiscal crisis and presumably the rest of the political climate. At least that’s the story he’s sticking to.

Buy buy baby…

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Well, at least somebody has finally stepped up who has a bit of faith in Snap Inc. Enter James Cakmak, a Wall Street analyst with the firm Monness, Crespi, Hardt, who gave the app its very first – and only –  “buy” rating, slapping it with a $25 price target. And fyi, Snap identifies itself as a camera company. Got it? Having the dubious distinction of being crowned as the biggest tech IPO in two years, Snap managed to raise a whopping $3.4 billion its first day out. It went up almost 60% on its first day but since then came barreling back down over 25%. Its shares have been losing steam over concerns that the company has a ridiculously high valuation, yet grim prospects for profits. Cakmak graciously said that he’s giving Snap the benefit of the doubt because, even though he himself is unsure if Snap will be able to crank out an actual profit, he likes the way the company stacks up against its competitors. Awww.

 

Trump-y’s Bumpy Budget Plans; McDonald’s Unknowingly Picks Fight with President; The Goose is Loose: Luxury Coats Hit Wall Street

Did you say…trillion?

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There’s nothing like a $1.1 trillion budget proposal to perk up a Thursday. The big winner in Trump’s plan is defense, which gets a $54 billion boost if the President gets his way. Losers of the $54 billion corresponding cuts include  – but are not limited to – the Department of Housing and Urban Development and the Environmental Protection Agency – which you had to have seen a mile away. The National Endowment for the Arts, legal aid for the poor and low-income heating assistance would also be history. Because why bother helping poor people pay for heat when you can spend $1.5 billion on a down payment to build a wall along the Mexican border. Wasn’t Mexico supposed to foot the bill for that one, by the way?  In any case, the outline was described as a “hard power budget” – if you have to laugh, then g’head – by Mike Mulvaney, the President’s director of the Office of Management and Budget. In case it wasn’t painfully obvious, it means that this plan caters to defense and building up the military, while foreign aid and diplomacy can go suck it. Sort of. Naturally, the Democrats are just not that into this budget and are wondering how smart it is to cut spending in areas that work with defense to facilitate diplomacy in more volatile parts of the world. On the bright side, the plan calls for slashing funds to the United Nations. If the President could find away to turn all that pricey UN real estate into affordable housing, then we’d really be onto something. But now it’s up to Paul Ryan to get that budget passed in Congress, which is not likely, though, since rumor has it that this plan is Dead On Arrival.

Speaking of greasy of food…

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For some inexplicable reason, at 9:16 this morning,  McDonald’s official Twitter account unleashed this little gem:”@realDonaldTrump You are actually a disgusting excuse of a President and we would love to have @BarackObama back, also you have tiny hands.” Sure the message was deleted 25 minutes later but not before it was retweeted more than 600 times. Interestingly enough Trump is a mega fan of McDonald’s, and even starred in a commercial for the fast-food chain a few years ago. McDonald’s was initially mum on the incident but later said Twitter notified the company to say that its account had been compromised and the situation is currently being investigated. Incidentally, Barack Obama’s former press secretary and campaign adviser, Robert Gibbs, is McDonald’s head of communication. Not that that had anything to do with this particular tweet, mind you. However, my question is, if this Tweet boosts business, will they keep tweeting more insults to the President? Hmmm.

Warm and fuzzy…

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Snapchat look out. There’s a new Wall Street darling today and its one that actually warms hearts. Literally. Luxury Canadian coat maker Canada Goose made its much anticipated New York stock market debut, with 20 million shares being unleashed to the tune of $18 a pop. Initially priced at closer to $12 a share, the apparel company came out swinging raising a very impressive $255 million and hitting a market valuation of $1.88 billion. And why shouldn’t that be the case? After all, the coat maker scored close to $300 million in revenue for 2016 with a $27 million profit, proving that people really do dig the Canadian brand. Of course, no party is complete without a few crashers and for Canada Goose it was PETA, who were there to protest Canada Goose’s use of coyote fur on some of its offerings. The animal-rights organization even purchased $4,000 worth of shares, which might seem completely at odds with its mission. However, that $4,000 investment affords PETA the opportunity to submit its own letter to shareholders and buys it admission to Canada Goose’s annual shareholder meeting, where, presumably, the organization plans to up its protest game.

 

 

Oh Nyet You Didn’t!: Yahoo Cyber Attacks Courtesy of Russia; Homebuilders Are Feeling Fine; The Fed (Finally) Comes Through With Rate Hike

Busted…

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There is a first time for everything and today marks the first time that Russian officials were officially busted by U.S. federal prosecutors for cyber attacks. These officials, who are actually Russian officers, allegedly paid other hackers to break into Yahoo to steal information from hundreds of millions of users. So clearly, the officials weren’t the talent behind the scheme. Of the six people charged in the attacks, one of them is a hacker named Alexsey Belan, who had the dubious distinction of being ranked the FBI’s numero uno most wanted cyber-criminal for three years.  But don’t expect any swift justice. While one of the alleged perps was picked up in Canada and headed here to await his fate, the Russian intelligence officers are staying put and probably living large seeing as how there is no extradition in place between Russia and the United States. Among the numerous charges outlined are economic espionage and computer hacking, to name just a few. The attacks, which were revealed last September, were the ones that caused the search engine giant to drop its selling price to Verizon by $350 million. According to the indictment, it appears the attacks were state-sponsored, which has me wondering if things will now be awkward between Presidents Trump and Putin.

Exuding confidence…

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The magic number is 71. No really. It is. At least if you’re looking at the National Association of Home Builders/Wells Fargo Housing Market index.  That means that homebuilder confidence is very high. Very. To put this number in perspective, anything above the number 50 is good. In March of 2016, that number was 58. So yeah, confidence abounds this year. Sure, the usual reasons are being given, including the fact that we are entering the season that homebuilders love, low mortgage rates and a solid labor market. But there’s another reason: President Trump. Yep. It appears he has begun rolling back on regulations, some of which are environmental, and that’s got homebuilders kicking up their heels in joy since they attribute 25% of the cost of homes to regulations. The regulation currently being rolled back is the Clean Water Rule, a rule that many builders call “burdensome” and which has nothing to do with putting dirty water into homes, I assure you.  Homebuilders see this rollback as a sign that even further de-regulation is in the wings, which would make home-building easier and quicker. And that is making builders positively giddy. And confident, of course.

Done deal…

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It’s official. The fed raised the benchmark lending rate by a quarter of a point. But that’s not the only big news. We are told to expect two more rate increases this year, which is especially weird since this is just the third rate hike in over a year. You may not feel the interest rate change now. And you may not feel it at all. But if you comb over your paperworks, from mortgages to credit cards to bank statements,  then you’ll notice the difference, albeit a subtle one. For now.  So subtle in fact that rates are still at historic lows. But it wont stay that way forever because by 2019 the rate is expected to hit 3% and stay there for quite awhile.  Hey what do you expect? Inflation is rising to the mark where the Fed wants it to, times are good, economically speaking and, just like with home builder sentiment, the strong labor market is putting a fiscal smile on a lot of faces.

Yahoo’s Marissa Mayer’s Expensive Goodbye; Intel Revs it Up on Self-Driving Cars; Another Sporting Goods Chain Throws in the Towel

Yah-who?

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Well the good news is that Marissa Mayer will get to add $23 million to her bank account. And who wouldn’t like to see their bank account get a deposit like that? The bad news is that the $23 million is part of her severance package from Yahoo. At least that’s what a regulatory filing indicated. And no one seems to know – and if they do, they are not talking – whether Ms. Mayer will be staying with the remaining entities of Yahoo that Verizon is buying. The parts of the company that Verizon is not buying will eventually be formed into a new company called Altaba, to be headed by Thomas J. McInerney. If you recall, Verizon got to cut $350 million from the final purchase price of $4.5 billion because of Yahoo’s fiscally disastrous data breach. Verizon’s feelings were that Yahoo execs didn’t quite “properly comprehend or investigate” those breaches that affected hundreds of millions of people. At this point, feel free to get a little more colorful in rephrasing that last bit with your own words and thoughts. Especially if you are a Yahoo account holder. The data breach also cost Ms. Mayer her own 2016 cash bonus of up to $2 million. However, to her credit, she did graciously gave up her bonus and equity grants for 2017.

Start me up…

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Intel just threw down over $15 billion to buy Israeli tech company, Mobileye NV.  What,  might you be wondering, is so special about this particular tech company that had a chip-maker eager to plunk down a 30% premium of $63.54 per share? Self-driving cars, which you may or may not realize, are all the rage these days. And since Mobileye already commands 70% of the global market for driver-assistance and anti-collision  technology, this acquisition seemed like an awfully prudent way for Intel to break into that industry in a very big way. So I think we can all agree that even though this was Intel’s most expensive purchase of any single company, it was totally worth it. I suppose Mobileye would have to agree as well, since its own stock went up a very substantial 30% on this latest news.

Another one bites the dust…

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Just when you thought you’d seen the last of the sporting goods chains bankruptcies, along comes Gander Mountain to remind us that, alas, those days are far from their bitter end. The Minnesota-based company will follow the unfortunate fiscal footsteps of Sports Authority, Golfsmith and about ten other retailers from the last year or so, and shutter over 30 of its 162 stores. Fierce online competition led to less traffic in stores and too much merchandise on the shelves. Around 1,300 employees will be affected by the closures, but will apparently have an opportunity to be relocated to locations that aren’t floundering. Yet, anyway.