A Bitcoin of Sunshine, Bancorp’s $200 Million Mess and TreeHouse Foods Has a Healthy Appetite

Move over marijuana!

Image courtesy of Boians Cho Joo Young/FreeDigitalPhotos.net

Image courtesy of Boians Cho Joo Young/FreeDigitalPhotos.net

The hottest new item to get California legalization has nothing to do with cannabis and a whole lot to do with money. The Sunshine State and its very emlightened Governor Jerry Brown just signed a bill into law legalizing alternative currency. Sure, bitcoin is at the forefront of this list, but it’s far from the only currency that stands to gain from this new legislation. Think Amazon Coins, Starbucks Stars and the ever-industrious community currencies designed to help give small business a nice little boost. In other bitcoin news bits, the IRS, peculiarly enough, isn’t requiring US taxpayers to report their bitcoin holdings in their Foreign Bank and Financial Accounts Report (FBAR) which are due today, even though every other piece of information is required on that report. Then there’s the bitcoin extortionist who is trying to extort several business with demands of payments of one bitcoin. If the demand is not satisfied by a certain date, the price goes up to three bitcoins. Ironically the would-be extortionist (who could use a lesson or two on executing that particular felony) used the US postal service to mail his demands for the virtual currency. Not really sure how that works and I’m guessing it’s not going to.

Another one bites the dust…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

US Bancorp becomes the latest bank to pay up hundreds of millions of dollars for approving bad mortgages under the False Claims Act. The bank joins an illustrious and exponentially growing list of misbehaving banks including Citibank, JP Morgan Chase and SunTrust Mortgage. Between 2006 and 2011, US Bank certified oh so many loans for the Federal Housing Administration that oops! didn’t actually qualify. Assistant Attorney General Stuart Delery didn’t mince his words about his feelings toward the bank: “By misusing government programs designed to maintain and expand homeownership, US Bank not only wasted taxpayer funds, but inflicted harm on homeowners and the housing market that lasts to this day.” I’m guessing he wont be taking out any mortgages with the bank in the near (and far) future. But on the bright side, the bank did graciously cooperate with the Department of Justice to whom it will pay $200 million. Isn’t that a relief?

Crunch time…

Image courtesy of antpkr/FreeDigitalPhotos.net

Image courtesy of antpkr/FreeDigitalPhotos.net

TreeHouse Foods is buying Flagstone Foods for the very appetizing price of $860 million. Hey! Why that’s $660 million more than what US Bancorp has to pay for screwing over taxpayers. Anyways, TreeHouse, maker of store label brands, non-dairy creamers and pickles  – among other products, of course – is eager to sink its limbs into the $7 billion healthy snacks industry and figured a purchase like this is the way to go. (I, too, was shocked that healthy snacks was a multi-billion dollar industry, especially, since I prefer M&Ms and Coca Cola myself.) After all, the Minneapolis-based company that puts out all kinds of trail mixes and dried fruits had almost $700 million in sales for 2013. TreeHouse is hoping this tasty move will churn out $750 million in annual revenue.

Michael’s Makes a Crafty Return, Au Revoir $8.9 Billion and Swoosh Go the Earnings

So crafty…

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Arts & crafts chain Michael’s (MIK) made its rather subdued return to Wall Street today with its $472 million IPO. After going private in 2006, the company returned offering up 27.8 million shares for $17.00 a pop, priced at the lower end of its predicted range. The Texas based company is the largest art& crafts chain counting Aaron Brothers amongst its holdings. With over 1200 stores in the US, Michael’s had a net income of $243 million, an increase from $200 million. Apparently the crafts industry is quite popular. While the company is valued at $3.45 billion, it’s also carrying a $3 billion debt, which is why Wall Street wasn’t giving it the big warm welcome it gave to other IPO’s like yesterday’s GoPro debut.

Busted…

Image courtesy of anankkml/FreeDigitalPhotos.net

Image courtesy of anankkml/FreeDigitalPhotos.net

France’s biggest bank, BNP Paribas, is copping a guilty plea to the tune of $8.9 billion. The official announcement is expected to come Monday. BNP helped countries including Iran, Sudan and Cuba, major human rights violators, avoid US sanctions and assisted tyranny by helping to facilitate $30 billion worth of transactions. Tres uncool. Apparently 12 employees are making an exit from the bank with no charges against the individuals. And while the bank should technically lose its license to operate in the US, the government is instead going to punish them (besides the multi-billion dollar fine) by not allowing the bank to do dollar clearing – an essential component for dealing with international clients. While that seems minor, it actually puts a huge dent in their oil and gas divisions, which is just as well, since those divisions were the ones primarily involved in the illegal transactions.

Swoosh…

Image courtesy of kibsri/FreeDigitalPhotos.net

Image courtesy of kibsri/FreeDigitalPhotos.net

Nike announced its earnings yesterday and raced way past expectations. While growth was seen in most of its divisions, it was its men’s football (or as us heathen Americans call it, soccer) division that really soared. Men’s football gear saw an 18% gain, certainly with a little help from its soccer…uh I mean football shoe dubbed Nike Mercurial Superfly (which to me sounds more like something you’d order in a bar). Shares of Nike rose over 3% in after-hours trading to $79.37. Nike is particularly popular with our neighbors across the pond who account for a majority of Nike’s growth. And while the athletic brand isn’t a World Cup sponsor, you’d never know it because it’s sponsoring more teams than any other brand, including, of course, the men’s US Soccer team.

GoPro Makes a Gnarly Debut, IKEA Makes a Gnarly Wage Hike and GM Might Have a Not So Gnarly Recall

Would you like some meatballs with that…

Image courtesy of fotographic1980/FreeDigitalPhotos.net

Image courtesy of fotographic1980/FreeDigitalPhotos.net

In case you didn’t know, IKEA is a really industrious company and not just because you furnished your entire first apartment with it without ravaging your bank account. Today the Swedish company announced that it is raising its minimum wage by 17% from $9.17 to 10.76. “It’s driven from our vision of wanting to create a better everyday life for our co-worker.” Well amen to that, IKEA President Rob Olson! But the company also think it’s going to help keep turnover to a minimum and recruit more employees. IKEA is going by the MIT wage calculator that takes into account all sorts of factors and how much it would cost to afford life’s basic necessities. Gosh darn those smarties who did the math! The Gap and Old Navy also have plans to raise their minimum wage as well. The federal minimum wage is $7.25. However, the perennial buzz killers argue that raising the minimum wage is bad because it could lead to lay-offs and a decrease in hiring (cue the chirping crickets).

Wall Street is like totally stoked…

Image courtesy of M - Pics/FreeDigitalPhotos.net

Image courtesy of M – Pics/FreeDigitalPhotos.net

GoPro made its extreme Wall Street Debut today and it was not a disappointing ride. Founded in 2002 by Nicholas Woodman, the company pulled in close to a $1 billion in 2013. GoPro is all about documenting life’s awesome adventures with a special camera that would shame the one on your phone. No really, it would. Would you actually whip out your iPhone mid-skydive or mid-surfing? Didn’t think so. The camera and all its gnarly accessories make for some fun digital media, of which GoPro, naturally makes it easy to use on a variety of platforms. Valued at close to $3 billion, the company began its day at $24 a share but rose quickly to $30 a share making for a totally rad Wall Street ride.

Oops! It happened again…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

It would almost seem weird to go a week and not hear about another GM recall. Okay so this next one didn’t happen yet. But it’s coming because of a potential defect with airbags on Chevy Cruzes- a major problem and not just because it’s GM’s number two selling vehicle right after the Chevy Silverado.  So far, 120,000 of them have been sold this year. The defect, incidentally is not entirely the fault of GM who uses airbag supplier Takata – a supplier used by several car companies, in fact. Meanwhile, over at the Today Show, Matt Lauer has been taking heat over some questions he posed to GM CEO Mary Barra. He asked her if she got the position because she is a woman and that GM needed to present a softer image considering all its problems in the past year. Then Matt not-so-politely asked if she could even handle the job with all its challenges as well as being a super awesome mom with all the demands of that role. Would he have dared asked such questions to male CEO’s, many wonder? Back over at GM, Barra said the there would be no more firings over the recalls. Isn’t that a relief? Or isn’t it? Hmmm.

 

Barnes & Noble Doing the Splits, The Mood Darkens at Barclays and Wall Street Not So Cuckoo For General Mills

Splitsville…

Image courtesy of adamr/FreeDigitalPhotos.net

Image courtesy of adamr/FreeDigitalPhotos.net

While everyone loves a great love story, Wall Street is loving an impending break-up instead. Barnes & Noble just announced its earnings today which were less than spectacular. But it also announced its plans for the Nook – namely, that its future does not include the e-reader. Sales of the Nook have been dragging down the bookseller for awhile because it has been unable to compete with the likes of Apple and Amazon. The plan is either to make two separate companies where the Nook business would be its own public company and Barnes & Noble would keep its books, e-books and college bookstore division or the Nook business would perhaps get picked up in a private sale.Whatever the outcome, Wall Street cheered the news of the split by causing shares of Barnes & Noble to jump a little.

Dark matters…

Image courtesy of Idea go/FreeDigitalPhotos.net

Image courtesy of Idea go/FreeDigitalPhotos.net

Looks like Barclays is the latest bank to get slapped with a lawsuit courtesy of New York State Attorney General Eric Schneiderman. The issue at hand: Dark pools. Indeed a term like that is filled with suspense and intrigue but more importantly, questionably ethical high frequency traders (or HFT’s as the cool kids call it). As necessity is the mother of invention, dark pools were crafted for institutional investors to trade huge amounts of shares under the mysterious cloak of anonymity. HFT’s were allegedly given special access to Barclays dark pools and now the bank stands accused of helping to hide the dubious ways of these HFT’s. What is the harm of all this to you? Glad you asked, telepathically, of course. HFT’s benefit by putting other investors (perhaps yourself) at a disadvantage. Some argue that HFT’s provide a public service by inadvertently (or advertently?) reducing trading costs. The SEC and Department of Justice argue otherwise.

Crumb-y sales…

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

General Mills announced its earnings. Not that it made much difference as the company’s earnings came to resemble little more than a virtually flat line. So now the company, best known in my home for such classics as Coco Puffs and Cinnamon Toast Crunch, will embark on a “formal review” which is just corporate code for finding ways to cut costs and make a ton more money. But it wasn’t a complete flat line. After all the company did go down 7% in international sales. Here in the States sales fell 3% in categories including (but not limited to) frozen foods and yogurt. Cereal remained the same at $2.4 billion in sales. The CEO blamed some of the disappointing earnings on lots of promotional spending that fell flat – no pun intended. Well, maybe just a little.

 

Not So Wholesome Foods, Is There A Nap For That? Banking On Stress

Whole lotta nothing…

Image courtesy of Africa/FreeDigitalPhotos.net

Image courtesy of Africa/FreeDigitalPhotos.net

Looks like Whole Foods needs to shift its focus from organics to business law now that it was slapped with a very unwholesome $800,000 in penalties and fees for overcharging its customers. Not the best move since the chain is facing increasing competition from other retailers offering organic products for considerably less money. Among the troublesome and illegal practices in which the organic chain engaged include not subtracting the weight of containers and selling prepared food by the item and not by the weight. Yes, those practices are illegal. Who knew? The offending markets are located in California. The Golden State has 74 Whole Foods Markets all of which can now look forward to four random audits a year.  However, it should be duly noted that Whole Foods says its prices were accurate 98% of the time.  And that’s great news as long as you weren’t the one paying the other 2% of the time.

ZZZzzz…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Yahoo CEO Marissa Mayer got caught napping on the job. The Silicon Valley exec was slated to have a very important meeting with ad execs in a very pish posh Cannes restaurant. She was bit late, though. That is, if you think two hours is a bit late. Some of her guests decided to leave before she arrived. She reportedly told someone at the dinner that she was late because she had fallen asleep. That faux pas was followed with a speech at a later point that was supposed to wow people. Except they were wowed by how un-wow the speech actually was. And the media wasted no time in skewering her for it. Some argue she’s getting more slack for her actions because she’s a woman. Still others feel her actions only mirrored her less-than enthusiastic attitude towards client relationships. Either way it’s a problem if only because Yahoo has been having “issues” with advertising and needs all the help it can get.

Still stressed out?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Citigroup and three other banks just can’t handle the stress…of their inadequate capital plans, anyway. It seems Citigroup, Banco Santander, the US division of HSBC and the Royal Bank of Scotland were supposed to have their affairs in order. Those affairs include internal controls, risk assessment in global operations and other not so minor details to make their inadequate capital plans a lot more adequate. The Feds want banks to make sure they can make it through economic downturns without needing any government handouts, which ultimately come out of taxpayer dollars. The banks were supposed to have all their action plans last week but the effort proved to be a bit too…stressful, so the they were given another six months to get de-stressed.

Oracle Goes Shopping, More Drug Drama and BNP Paribas Has a Tres Big Fine to Pay

What a bargain…

Image courtesy of KROMKRATHOG/FreeDigitalPhotos.net

Image courtesy of KROMKRATHOG/FreeDigitalPhotos.net

Oracle spent a few bucks today. Actually a billion bucks today. The company that is now making a big push towards cloud services just picked up Micros Systems for $5.3 billion or about $68 per share. It was Oracle’s biggest shopping day since 2010 when it scooped up Sun Microsystems. Micros Systems makes technology for the hospitality and retail industries, two sectors in which I don’t spend nearly enough money. The move caused shares of both companies to go up a teeny bit. But every little bit helps. Especially for Oracle who just released earnings on Thursday and disappointed Wall Street analysts by earning just $.80 per share instead of a much hoped for $.83 per share. Oh well.

Reject!

Image courtesy of patpitchaya/FreeDigitalPhotos.net

Image courtesy of patpitchaya/FreeDigitalPhotos.net

As we return to the Valeant/Allergan pharmaceutical saga, Allergan has been urging shareholders to reject Canadian based Valeant’s insulting $53 billion bid. Really, if you’re going to try and buy the company that makes Botox you better bring it. Allergan is eager to point out that a hostile takeover like that is simply not in the best interest of the company, especially for the board members who will no doubt be booted from their positions if this takeover does indeed transpire. Partnering with Valeant on this bid is activist investor Bill Ackman of Pershing Square Capital Management who already made an offer for the company back in April. According to Allergan’s board members that $53 billion figure seriously undervalues the company – and not just any company but the company responsible for freezing many celebrity faces.

And that’s what you get…

Image courtesy of suphakit73/FreeDigitalPhotos.net

Image courtesy of suphakit73/FreeDigitalPhotos.net

Looks like French bank BNP Paribas is about to get slapped with a nasty little fine to the tune of almost $10 billion. But don’t feel so bad for them considering they were helping out Iran, Sudan and other countries led by people who have no sense of humanity. It’s rumored the bank will plead guilty for having violated US sanctions by hiding about $30 billion in transactions. The bank allegedly violated the International Emergency Economic Powers Act. That basically means they very nicely assisted very evil people to do very bad business. BNP Paribas is the second major European bank to plead guilty this year. Credit Suisse pled their guilt a few months ago and coughed up a $2.6 billion fine for hiding US assets from the IRS.

Twitter Tries to Up Its Game, Olive Garden Not Blooming and BofA Wants Quality Time With the Attorney General

Tweeting it all out…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Twitter just announced plans to snap up SnappyTV for an undisclosed amount. SnappyTV is a video sharing service where users can do all sorts of convenient and entertaining things like clip and share videos. Twitter is forging ahead with great big plans to integrate SnappyTV and all the visual enhancements it is bringing with it into Twitter Amplify. And really, who doesn’t love visual enhancements?  The social media company is in a mad crush and rush to grow its user base after announcing a less than 6% increase in growth. Numbers like that did less than wow investors and so it is on a mission to find ways to justify its high valuation that many have been calling into question.

Darden leaves Wall Street hungry for more…

Image courtesy of Feelart/FreeDigitalPhotos.net

Image courtesy of Feelart/FreeDigitalPhotos.net

Darden Restaurants, the apparently not so forceful force behind the Olive Garden chain, failed to feed enough people and beat analysts expectation. Despite its efforts to dump the Red Lobster chain, the company’s profit wasn’t as high as Wall Street would have liked. Revenue for the period ending in May was a paltry $2.32 billion. But the hard-to-please Street was looking for $2.33 billion in revenue. Even though the company gained $0.84 a share, Wall Street was left unsatisfied and wishing for $0.10 more per share. The company and its food offerings is having a hard time competing with fast-food establishments that have been offering better quality food with more affordable prices. As a result, Darden’s net income fell a whopping 35% from a year earlier.

BofA feeling unsettled…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Looks like Bank of America CEO Brian Moynihan wants to spend some quality time with US Attorney General Eric Holder. But bonding is not on the agenda. Instead, the BofA CEO wants to try and hash out the kinks over settlement issues. BofA, the second largest bank in the United States sold some really bad loans a few years back, in case you hadn’t heard. Now the time has come to pay for all the trouble it caused and the price tag on all that trouble is going to cost billions of dollars. Reps for the bank and reps for the Justice Department already had a bunch of meetings to try and reach an agreement. But the two sides just couldn’t play nice. So Moynihan probably took a cue from JP Morgan Chase CEO Jamie Dimon, who also personally met with Holder in back in November where the two sides emerged with a $13 billion settlement agreement. While the move seemed peculiar at the time, the fact is that it worked and the formula has been used with other naughty banks that helped cause the epic 2008 financial crisis.