Spacing Out Thanks to the FAA, Will France Say Adieu to $10 Billion? True or False: $59 Fares

Cleared for liftoff…

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Sir Richard Branson and his impending fantastic space voyage are good to go as far as the Federal Aviation Authority (FAA) is concerned. Virgin Galactic, co-owned by Branson and Abu Dhabi’s Aabar Investments mapped out an agreement with the FAA over how the intergalactic adventure will work with US airspace. It hopes to launch its first flight on SpaceShipTwo by the end of 2014. Hundreds of people have already signed up for a flight that only sets them back about $250,000 – and is, of course, payable via super-cool and super un-regulated bitcoins.

Au revoir, BNP?

Image courtesy of 1shots/FreeDigitalPhotos.net

Image courtesy of 1shots/FreeDigitalPhotos.net

France’s biggest bank, BNP Paribas, is already in some tres hot water over violating US sanctions against unpleasant countries like Iran and Sudan. The Justice Department has been conducting its investigation for quite a while and feels the time has come for BNP Paribas to finally pay for its wrongdoings to the hefty sum of $10 billion. What’s so special about this figure, besides its enormity is that it would be the biggest fine ever imposed on a misbehaving bank –by fives times as much. BNP, however, feels it should only have to pay around $8 billion. But Attorney General Eric Holder has even bigger plans as he is eager to remind the banking industry that none of them are “too big to jail.” He wants to bar BNP from even trading assets ( or as it’s called on The Street, dollar clearing) besides throwing the responsible individuals into the less than illustrious ranks of the unemployed.

Southwest. Oops. They did it again. And Again…

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

Southwest was in a whole heap of trouble yesterday and had to pay some embarrassing and avoidable fines (hey, just like BNP will likely do, almost). The trouble began when Southwest posted $59 fares on its website flying from Atlanta to LA, Chicago and New York. Of course those fares were too good to be true. Would be travelers were told that those fares were not available and were a mistake and never meant to be part of the sale even though they were heavily advertised. Hmmm. The US Department of Transportation didn’t care for this show of false advertising and let them know it. Lucky, for the airline it only had to pony up $300,000 which is probably what it earns in the time it takes you to read this paragraph. Despite its questionable sales tactics, shares of the airline have gone up over 40% this year. Another hmmm.

Ballmer a Baller? The British Are Coming…To Make Bourbon! Costco Goes Hip But Still Misses a Couple of Cents

Clipped…

Image courtesy of sippakorn/FreeDigitalPhotos.net

Image courtesy of sippakorn/FreeDigitalPhotos.net

Steve Ballmer wants to become an official baller. Well sort of. The former Microsoft CEO just inked a deal to take over the LA Clippers to the tune of $2 billion. He outbid a few groups to earn the position of the team’s newest owner, wresting it from the hands of embattled owner/alleged racist Donald Sterling and his estranged wife, Shelly. It’s a record price paid for an NBA team which was originally purchased by Sterling back in 1981 for a little over $12.5 million. Oprah Winfrey and David Geffen were at one point also considering buying the Clippers but dropped out of the bidding. The league still needs to approve the sale. However, Sterling, who swears he’s not a racist despite the numerous racist comments he made during an audio recording, has plans to make the sale difficult.

Bourbon State….

Image courtesy of artur84/FreeDigitalPhotos.net

Ŷ Image courtesy of artur84/FreeDigitalPhotos.net

The British are coming to Kentucky but I suspect the state will welcome this latest invasion. Diageo, the London-based liquor company whose brands include perennial favorites Johnnie Walker, Smirnoff and Ciroc has plans to build a 300 acre, 1.8 million proof gallon (yeah, I know you like the sound of that) distillery in Shelby County. The $115 million project will create thirty new jobs and lots and lots of bourbon. Fun fact: Bourbon is the fastest growing beverage in the spirits category. How very spirited! Kentucky is a very gracious home to the growing Bourbon industry. Naturally, local government officials will need to provide approval.  I’ll bet a bottle of bourbon that permission will be spiritedly granted.

A cooler, hipper Costco?

Image courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

Image courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

Costco (COST), unfortunately, is not having as good a day as Kentucky. Or Steve Ballmer. Net income for the company was $473 million and revenue climbed over 7% to about $28 billion with a special thanks to higher sales and more membership fees. The warehouse wholesaler to the masses posted earnings of $1.07 per share but that just wasn’t enough for those fancy Wall Street analysts who were hoping for $1.09 per share. Those two cents really put a downer on things. The chain, which currently operates 655 warehouses worldwide, is trying to attract a younger demographic. It’s hoping a partnership with Google (GOOG) offering same day delivery and adding more hipper categories and products will achieve the desired effect. I just hope they crank out some more of their tiramisu cakes, which always seem to be in short supply at my local Costco.

 

Dr. Dre Takes A Bite Out of Apple, Amazon/Hachette Smackdown and I Said Jet-Set Not Jetsons!

An Apple a day…

Image courtesy of samuiblue/FreeDigitalPhotos.net

Image courtesy of samuiblue/FreeDigitalPhotos.net

Dr. Dre must be in a very good mood now that Apple (AAPL) is forking over $3 billion to him and his fellow Beats Electronics co-founder Jimmy Iovine. After weeks of talk and rumor, the deal is official. Some feel that the deal might have happened sooner had Dre not bragged about becoming hip-hop’s first billionaire in a leaked video. Apparently Apple wasn’t down with that move. But hey, better late than never. Apple, however, was definitely down with the way Beats music subscribers paid for the service which they previously received for free. So next time you find yourself in an Apple store with a few hundred dollars lounging around in your pocket, take comfort in the knowledge that you just might be able to purchase some tricked out headphones that last year pulled in over a billion dollars in revenue.

Oh no you didn’t!

Image courtesy of adamr/FreeDigitalPhotos.net

Image courtesy of adamr/FreeDigitalPhotos.net

The latest drama to play out in the corporate school yard is brought to you by Amazon and book publisher Hachette. So whose side are you going to take? Well let’s see now. How do you feel about Robert Galbraith aka JK Rowling? And just how eager are you to read that author’s new novel, The Silkworm? If you were thinking about buying the title from Amazon you might want to look elsewhere since it’s a Hachette book. Pre-ordering the title from Amazon isn’t an option (anymore). Amazon and Hachette were trying to negotiate how much to charge for Hachette’s books. Amazon wanted Hachette to reduce its prices. They couldn’t agree. Btw, Hachette pulled in $3 billion in revenue for 2013. Amazon pulled in $75 billion. Gee, I wonder who has the upper hand here?

Jetting off with Michael Kors…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Michael Kors earnings flew way past Wall Street predictions by almost $100 million, which does little to explain why its stock was going all over the place today. Though investors would argue that they aren’t enthusiastic about its gross margins as the company goes forward. In a corporate conference call the term Jet Set was used. A lot. Apparently “Jet-Set” is way cooler and more cost-benefitting than saying “luxury” or “ultimate” or whatever…No doubt a marketing firm was paid handsomely to come up with this theory. Anyways, the self-proclaimed “jet-set” company pulled in over $900 million in revenue and overall had more than a 50% increase over last year. The company might want to send a thank you note to Europeans who are totally getting behind the Michael Kors label/brand and helped increase revenue there by a very jet-setting, luxurious, ultimate 125%. So I guess that gives it leeway to call itself whatever it wants.

Who’re You Calling Chicken? “X” Marks the $10 Million Spot and Burgers and Lattes and Beer, Oh My

Appetizing mergers…

Image courtesy of debspoons/FreeDigitalPhotos.net

Image courtesy of debspoons/FreeDigitalPhotos.net

There’s been a lot of talk of pilgrims today even though Thanksgiving is still six months away. That’s because food corporation Pilgrim’s Pride, a Colorado based company that sells chicken products made a very meaty offer to buy Hillshire Farms for about $6 billion. Just a couple of weeks ago, Hillshire Farms, the company behind Jimmy Dean Sausages and the ubiquitously advertised Ball Park hot dogs announced similar plans of its own to buy Pinnacle Foods from Blackstone Group LLP. But my how the (dinner) tables have turned and Pilgrim’s Pride said that unless Hillshire chucks its plans to buy Pinnacle, then it can keep its sausages. However, if Hillshire does indeed decide to go ahead and eat up Pilgrim’s Pride offer, then the poultry product producer will fork over $163 million to pay Pinnacle Foods’ termination fee.

Ahoy Amazon…

Image courtesy of Pong/FreeDigitalPhotos.net

Image courtesy of Pong/FreeDigitalPhotos.net

If you thought buried treasure is just for movies these days, then you might want to check out Amazon (after you finish reading this blog, of course). Tonight 1,400 19th century coins are being auctioned off on the site. The coins were discovered by a couple who were out walking their dog on their own property. While there was no “X” marking any spot, there was a suspicious looking canister making its way out of the ground. All the coins of $5, $10 and $20 denominations are, at face value, worth about $28,000. But because the coins, dated from 1847-1890 are rare, old and in “mint” condition –  the coins are set to fetch about $10 million. And no you can’t go digging in other people’s property.

Lattes and burgers? Be still my beating heart…

Image courtesy of KEKO64/FreeDigitalPhotos.net

Image courtesy of KEKO64/FreeDigitalPhotos.net

If you’re jonesing for a burger to complement your mocha chai latte ( I don’t even know if that’s a real thing) then Starbucks might just have the solution. The Seattle based coffee mega chain is buzzing with plans to open a La Boulange eatery in Los Angeles. Starbucks picked up the bakery chain almost a year ago for $100 million. The last time Starbucks tried to enter the gourmet food arena, customers weren’t exactly eating it up. This particular establishment, however, set to open June 11, lets customers build their own burgers and it’s offering alcohol. Sounds like a win-win to me.

The GameStop’s Here, Uber Excitement and HP Is Shrinking

Dropping Up…

Image courtesy of Idea go/FreeDigitalPhotos.net

Image courtesy of Idea go/FreeDigitalPhotos.net

There’s nothing like a price drop to get consumers to open up their wallets a little quicker. Microsoft may not be all that thrilled to have dropped the price for its Xbox One, but a move like that sure has a way of creating greater demand for the product. But the real winner here is GameStop (GME). Greater demand for the hardware creates greater demand for  the software. Good thing GameStop supplies both. Isn’t that convenient. Revenue for the quarter ending May 3 was $2 billion with a hefty $68 million profit.  Other companies digging the price drop are Take Two and Ubisoft, makers of the highly educational and extremely informative video games, Assassin’s Creed and Grand Theft Auto.

Uber-drama…

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

Uber, the uber-cool ride sharing app is making some tracks today. It’s looking to score $500 million for its latest funding round which could drive its value up to $12 billion. Not bad for an app that’s practically its own middleman. Of course, not everybody is impressed or excited by the technology and they are going to do whatever it takes to make sure Uber knows that. Boston cabbies are part of the opposition as are taxi drivers in Miami. Across the pond Brussels isn’t pleased either. But it’s London’s black-taxi drivers that are taking their dissatisfaction to a whole new level, apparently staging a massive protest. It should be duly noted that these same London drivers already showed their lack of enthusiasm to Uber’s competition, Hailo, by very impolitely (and presumably illegally) vandalizing its offices. But Uber CEO Travis Kalanick is probably thinking more about the $20 million in gross revenue his company pulls in every week.

Crickets crickets crickets…

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

It’s going to get awfully quiet at HP (HP). Really really quiet. But not because they’re encouraging napping at work like some of those other (cool) companies. And if you sent your resume there, don’t expect a response. CEO Meg Whitman announced, as part of her five year turn around plan, that she will be cutting even more jobs than what she previously decided to cut. A whole lot more. Between 11,000 and 16,000  employees will be asked to leave their staplers at their desks. Bringing the grand total to about 50,000 people who will be spending their new found free time trolling job boards. The 75 year old, Palo Alto based company is losing ground to smart phones and cloud computing and as a result their pc and printers divisions have been taking regular fiscal punches. In fact they have been getting hit for three years running. Here’s hoping its remaining 317,500 employees can help avoid that in the future.

Sauced Out, Not Exactly the Best-est Buy and Housing Springs Forward

They don’t got the sauce…

Image courtesy of Suat Eman/FreeDigitalPhotos.net

Image courtesy of Suat Eman/FreeDigitalPhotos.net

Apparently Unilever (UL) likes their pasta plain. The company just sold their Ragu and Bertolli pasta sauce brands to Japanese food manufacturer Mizkan for $2.15 billion. Despite the fact that Ragu is the best-selling pasta sauce in the United Stated, Unilever, like many other companies are focusing on what they do best  – in this case it’s personal hygiene products. Which is just as well I suppose as the maker of and Axe body spray decided its food products would find a much more loving family in the arms of a 210 year old Japanese company that makes things like mustards and rice wine.

Mediocre Buy…

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

Best Buy (BBY) wasn’t looking its best today. Sure it beat expectations earning $0.33 a share instead of the predicted $0.20 a share. But revenue fell and the company isn’t expecting that to change much. The electronics chain reported sales of $9.04 billion. But analysts pegged their hopes for it at $9.22 billion. And like every other company, they are blaming factors outside the company – in this case, the electronics manufacturers. Talk about biting the hand that feeds you. Best Buy said companies need to crank out more products with bigger tricks and maybe then Best Buy sales will improve. Best Buy also spoke of “softness” (which is just another way of saying lousy sales) in the mobile phone market where it says consumers are eagerly awaiting the next best things so they can sleep on a sidewalk  outside a store three days before a product hits the shelves just to have the dubious distinction of being among the first to own a product that will be obsolete in six months.

Housing numbers and housing bummers…

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Image courtesy of cooldesign/FreeDigitalPhotos.net

The economy is looking slightly (remember, I said slightly) less awful today as new numbers are out indicating that the housing market is improving. Slightly. In fact, April was the first time it rose in 2014. While it was a 1.3% increase from March, it still was 7% below April 2013’s numbers. But two good things to note: There are more homes and there are better prices  – not that those two things are always mutually exclusive. The median price of a home was up 5.2% from a year ago to $201,700. But leave it to the Federal Reserve to be the ever reliable buzzkill and remind us that the pace of the housing recovery is still too slow and just isn’t good enough in the grand economic recovery scheme of things. Got all that?

Tiffany: Bling It On, Janet Yellen Graduates and Missed Target

Shine on…

Image courtesy of Boykung/FreeDigitalPhotos.net

Image courtesy of Boykung/FreeDigitalPhotos.net

Tiffany & Co. (TIF)  and its iconic little blue box had a very luxurious quarter. They just might be the only company who didn’t take issue with the particularly infuriating winter. Even if that nasty little season did toy a bit with the company’s northeast stores nobody probably wants to hear about it considering its net income rose about 50%. In fact, not only did it beat the Street’s expectations, it shattered them. Analysts thought the ultra luxury retailer would pull in about $953 million dollars. But oh no. They came in at a whopping $1 billion. Ironically, a much of that success stems from the less-expensive collections. Yes. Tiffany & Co. does believe itself to have a less expensive collection. Now please collect yourself. But to be fair, consumers were also taking a shine to their colored diamonds as well. And well who doesn’t like a diamond no matter what the color?

 Class act…

Image courtesy of hywards/FreeDigitalPhotos.net

Image courtesy of hywards/FreeDigitalPhotos.net

Federal Reserve Chairwoman Janet Yellen received her degree. Okay so it was an honorary one from NYU. But it will look awfully pretty next to the one she received from Yale where she earned her PhD in economics many years ago. Before a crowd of graduates and their kvelling families gathered in Yankee Stadium, she delivered an address to the class of 2014 in which she said ability is good but it’s how much grit you have that will ultimately determine your success. “You wont succeed all the time. I hope you can find joy in the lives you choose.” Words of a wisdom from a genuinely wise woman. She also gave props to her predecessor, Ben Bernanke. The first female to head the Federal reserve, she was joined by fellow honorees Supreme Court Justice Elena Kagan, Yankees pitching great Mariano Rivera and legendary singer Aretha Franklin.

Missing the mark…

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Target can’t seem to shake that pesky mark on its back after coming out with earnings that tanked 16%. Of course that massive fiasco of a data breach that cost the company $26 million is still looming large and certainly contributed to its disappointing – though not unexpected – performance. But then there was Canada! Oh Canada. The foray to our friendly neighbors to the north didn’t work out quite the way Target hoped. Those embarrasing inventory shortages were not exactly the stuff successful expansions are made of and so the president of its Canadian operations was shown the door.