Guess it’s Not Payback Time for Greece; Brit Wants to Save the Fiscal Day for Greece; diSinging the JetBlue-s for Baggage Fees;

Greece frightening…

Image courtesy of africa/FreeDigitalphotos.net

Image courtesy of africa/FreeDigitalphotos.net

Will the third time be a charm? Fiscally-challenged Greece has asked for yet another bailout, this time to the tune of $27 billion. Greek Finance Minister Yanis Varoufakis has indicated that repayment for $1.8 billion of a $270 billion tab is not gonna happen, much to the dissatisfaction of the International Monetary Fund, the European Central Bank and the European Commission who all ponied up the cash for the cash-strapped European nation. In fact, Greece isn’t even getting the customary 30 day grace period. There are those in Greece who weren’t down with suggestions made by its creditors who called for “austere” measures and a more stringent repayment schedule. Lucky for Greece, however, the country is still not expected to officially go bankrupt. Phew. There’s also that other payment due July 20 in the not-so-small amount of $3.9 billion. That’s probably not going anywhere either. As for Alexis Tsipras and his July 5 referendum, he subtlety indicated that he’ll bow out – as in, resign – should the Greek people decide to vote in favor of the measures, for which he does not care. What a guy.

Oh and one more thing…

Image courtesy of Mister GC/FreeDigitalPhotos.net

Image courtesy of Mister GC/FreeDigitalPhotos.net

If you’re heart goes out to Greece and you feel the need to help the country in its loan repayment – because you don’t know how else to spend your disposable income – then you’re in a luck. A British man found a way for you to throw out your hard-earned money by donating to a fund that would “help” mitigate the European nation’s fiscal woes. Out of the goodness of his heart, or maybe because it seemed funny at the time, Thom Feeney established an Indiegogo account to help raise 1.6 bullion euros. He reasoned that if every European chipped in three euros, then the people will have sorted out this mess instead of leaving it to those pesky “European ministers flexing their muscles.” Laugh all you want but Feeney has so far raised over 250,000 euros from over 16,000 contributors.

And then there was one…

Image courtesy of phasinphoto/FreeDigitalPhotos.net

Image courtesy of phasinphoto/FreeDigitalPhotos.net

Just when you thought JetBlue really was different than all the others, the airline with a relatively decent customer satisfaction rating went ahead and broke our consumer hearts by announcing that, it too, would start charging to check bags. This leaves Southwest Airlines as the only airline who has not jumped on the baggage fee bandwagon. Well, at least not yet. Beginning today, if you book a ticket with JetBlue, and it happens to be the cheapest ticket, expect to pay a $20 fee for that first checked bag. If you aren’t a light packer and find yourself needing to check an additional bag, expect the price to go up to $35. If you have more than that, well, maybe you should reconsider air travel. In any case, that $20 fee is only for those checking their bags online or through a kiosk. Once you decide to check that bag at  a counter via an actual living and breathing human being, watch the price go up by $5. If you’re fotunate enough not to have to book the lowest tier ticket, then congrats. You can continue to get that first checked bag on the house – or rather, aircraft.

Greece’s Finances are Messing Everybody Up; Puerto Rico’s in a Debt “Death Spiral”; Housing Up and About

It’s all Greek to me…

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

Image courtesy of Salvatore Vuono/FreeDigitalPhotos.net

They gave us philosophy and high-protein yogurt. But now Greece is giving us nothing but global fiscal chaos as its banks are on the verge of collapse while the country prepares to maybe give a big fat default on its loans tomorrow. That is assuming it doesn’t pony up a $1.8 billion re-payment. Greek Prime Minister Alexis Tsipras gave a very unwelcome surprise to Greece’s creditors on Friday when he called for a referendum to take place on July 5 on whether or not Greece should follow the plan that the creditors have in store – which is, basically, good old-fashioned austerity and some deep deep spending cuts. Greeks will have plenty of time to ponder all this as they wait on endless lines just to withdraw about $60 bucks. That is, if the ATM’s still even have cash in them, since hundreds are already empty. Too bad the banks will be closed for the next six days. As for the question surrounding the “Grexit,” as in, Greece’s potential ugly exit from the European Union…well that remains to be determined. But, I’m guessing those creditors really want Alexis Tsipras to think long and hard about that 240 billion in euros the country has been getting since 2010 and how much they would really appreciate getting it back. Actually, I’m guessing everyone wants Alexis Tsipras to do something, as the situation in Greece is messing with financial markets all over the world.

Speaking of debt-laden countries…

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Puerto Rico seems to be inadvertently channeling Greece’s debt problem as its Governor, Alejandro Garcia Padilla, said the island’s debt is “not payable” and even asked for help to be pulled from its fiscal “death spiral.” His words. Not mine. Puerto Rico’s debt is a lot less than Greece’s but no less daunting with its $72 billion price tag. One of the problems facing Puerto Rico is that because it’s not a state, it doesn’t even get to file for bankruptcy. This puts the territory in quite the pickle. So like any other borrower, Puerto Rico is going to attempt to restructure some of those loans and see about getting some deferments. Otherwise, fiscal disaster looms and it could be years before it climbs its way out of that menacing “death spiral.”

And not in Greece or Puerto Rico…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Housing recovery is…recovering. At least based on the number of pending sales from previously owned homes. But hey, we’ll take it. That figure, brought to us courtesy of the National Association of Realtors, is up .9% for May and up to 112.6. And bonus: that was the fifth straight gain. And more bonus: it’s at its highest point in nine years. And who doesn’t like straight gains and high points? Better employment, (slightly) increasing salaries and lower borrowing costs are all helping in this arduous recovery process. Interestingly enough, those higher sales came from the markets located in the Northeast and West part of our country. Not so much from points in the Midwest and South which actually took a bit of a hit. A teensy one. Well, teensy enough that it was over-shadowed by those impressive gains in other parts of the land. In case you were wondering, the median price for a home these day is $228,700, almost 8% higher than last year.

Fitbit Fit for Wall Street; President Obama Not Making Dems Happy; Softbank’s Robot Wants Your Affection

Fiscal fitness…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Fitbit made its highly anticipated Wall Street debut today and beefed up its valuation to a very fit and healthy $4 billion. CEO James Park, who had some 20 million shares, has now banked a very robust $600.6 million. Even though $732 million was raised for the IPO and the initial price per share was but $20 a pop, the stock surged 52% on its very first day of trading. Opening up the fiscally glorious day at over $30 per share, Fitbit clearly sent a message to Wall Street that it has arrived and that investors totally dig the stock. The company, which trades under the very aptly named FIT (catchy, huh?) has been drawing some not so flattering comparisons to Blackberry. There is currently a number of other companies offering similar devices. And despite Fitbit’s insistence that it is different from the rest, many analysts are still wondering if Fitbit can keep ahead of the competition, as it seems to be doing now. Or will it lose its swagger with consumers if it can’t innovate quickly and effectively enough. Hmmm….

Things could get ugly…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

It’s called the “fast-track trade bill” a.k.a. “trade promotion authority” and it’s causing quite the stir in Washington. Basically, it’s a bill that lets the President negotiate global trade deals and Congress can opt to reject or approve them. It just can’t make any changes to them. It’s a take it or leave it kind of thing. Sounds completely harmless, right? That depends on whom you ask. Democrats, and unions don’t like the bill. They feel it will cost American jobs. Of course, American businesses are totally down with the bill and want to see it passed because they feel it would lead to more opportunities which is just fancy talk for: lots of money. The House of Representatives already voted in favor of it and the bill’s fate is now in the hands of the Senate. This bill is all part of President Obama’s master plan to pass the Trans-Pacific Partnership that would make trading between the U.S. and 11 other countries so much easier and take away a bunch of pesky obstacles. If the Senate votes to pass it, well then, I guess you’ll have some very ticked off Dems and union members. Oh well.

All I want for Christmas…

Image courtesy of  Boians Cho Joo Young/FreeDigitalPhotos.net

Image courtesy of Boians Cho Joo Young/FreeDigitalPhotos.net

Softbank, in a joint deal with China’s Alibaba and Taiwan’s Foxconn, is putting its adorable robot “Pepper” up for sale beginning June 20. Well, in Japan anyway. But don’t worry. It’s set to make its U.S. debut sometime next year. Now, adorable may not be the first word that comes to mind when you think of robots, but consider that Pepper enjoys contact with humans, particularly on its head and hands, and was initially used as a greeter in Softbank’s phone stores. Pepper, affectionately dubbed the “robot with a heart” goes on sale for $1,600 with an additional $200 for monthly service fees and maintenance. The bot is apparently also good with kids and makes for a great employee as well, though not necessarily in that order. There must be a joke in there somewhere.The cuddly bot is also able to recognize human emotions and can even react with anger and joy. I’m pretty sure there was a sci-fi horror flick based on that premise.

Uber of a Mess in California; Starbucks Bids Adieu to La Boulange; Botox Plumps Up With Kythera

This could pose a problem…

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

Things could get very ugly for ride-hailing app Uber, now that the California Labor Commission decided that Uber drivers are actual employees, like taxi drivers and pizza deliverers, and not independent contractors, as Uber sees them. The trouble for Uber began when a woman named Barbara Ann Berwick filed suit for additional compensation and the company denied her request. She took her case to the California courts where she was awarded $4,152. However, that $4,152 could actually end up feeling like billions. The company, which is privately held and has a $40 billion valuation, is appealing the ruling, as it has the potential to set a big bad precedent not just for Uber, but for other ride-sharing apps as well. Because, if Uber is forced to call its one million drivers employees, it will have to start accounting for all the expenses that go with it, like social security, workers comp, etc. and that will likely mean that  not only will Uber’s operating costs go up, but the costs for the riders go up too. By a lot.

Gone gourmet…

Image courtesy of Witthaya Phonsawat/FreeDigitalPhotos.net

Image courtesy of Witthaya Phonsawat/FreeDigitalPhotos.net

It seemed like a good idea at the time, but alas, no dice as Starbucks gets set to shutter all 23 of its La Boulange bakery cafes. Even though Starbucks saw 16% growth in food with a 35% increase from just its breakfast sandwich offerings this past quarter, the gourmet goods apparently just don’t fit in with Starbucks’ long term growth plans. Translation: La Boulange may be bringing in cash now, but Starbucks isn’t convinced that it’s fiscally prudent to keep it around for the long haul. Starbucks bought La Boulange for $100 million back in 2012 because the coffee chain wanted to offer expensive fancy food that you could purchase with your extra fancy mocha drinks. While the cafes are closing, you can still get your La Boulange fancy food fix at regular Starbucks cafes. As for all those La Boulange employees who are about to be sans paycheck? Puhlease, you didn’t think a socially conscious company like Starbucks  would leave them high and dry, did you? (Insert jokes about Starbucks flopped campaign to talk about race here.) Starbucks will be helping those folks find new gainful employment, hopefully at establishments that Starbucks is not looking to unload.

Freeze…

Image courtesy of patpitchaya/FreeDigitalPhotos.net

Image courtesy of patpitchaya/FreeDigitalPhotos.net

Allergan, maker of everybody’s favorite wrinkle freezer, Botox, is buying itself some new plastic surgery fun, picking up biopharmaceutical firm Kythera for $2.1 billion. Allergan is paying 80% of that $2.1 billion in cold hard cash, with the rest paid out in shares of Allergan. And who doesn’t want a few shares of a biopharmaceutical company whose main focus is facial aesthetics? At that price, Kythera is getting about $75 per share, which seems like a lot… because it is – it’s about a 24% premium on Tuesday’s closing stock price. But hey, it’s totally worth it since Kythera also has its own beloved cosmetic treatments, including one for double chins called Kybella. Don’t laugh. Kythera’s double chin fix is currently the only non-surgical treatment for that pesky double chin issue. Of course, it entails a needle that needs to be inserted. But what’s a little needle if it gets rid of a double chin, right? Kythera’s also got something in the works for male pattern baldness. This company has GQ written all over it. In any case, Allergan, which also has Latisse and Juvederm in its cosmetic collection, is currently the fifth biggest pharmaceutical company. Which is great. Except, what to do about the fact that insurance companies don’t usually cover any of its treatments?

Gap Tries to Bridge Its Sales Gap; Under Armour CEO Lofty Leadership Plans; Fitbit Not So Bitty Ticker Plans

Big Gap-ing hole…

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Gap Inc. finally realized that its brand just isn’t what it used to be and has decided to shutter about 175 of its 675 specialty stores. What once might have been considered the Generation X go to wardrobe supplier, has now become passé to the millennials, many of whom, ironically, are employed by the Gap. Millennials have been opting to shop at “fast” brands like Zara, H&M and Forever 21, leaving the Gap holding the empty shopping bag of fiscal anguish. And not to be a downer, but when I browsed through a Gap last week, I wasn’t exactly swooning over the merchandise which the store was practically giving away. Shoppers are doing a lot more of their shopping online so there was no great pay-off in having so many stores open anyways. About 250 employees over at Gap headquarters in San Francisco are also set to lose their jobs and all these cuts are expected to cost between $140 – $160 million.

So classy…

Image courtesy of cooldesign/FreeDigitalPhotos.net

Image courtesy of cooldesign/FreeDigitalPhotos.net

Under Armour CEO Kevin Plank has big plans to lead the company he founded for many many years. Good thing he figured out way to do just that – by offering up more shares to investors. Of course, these aren’t your regular average shares. These shares do carry all the rights and privileges that come with owning a company stock – but with one itty bitty difference: the shares carry no voting power.  The company already has class A shares and class B shares. With class A shares, a shareholder gets one vote per share, while class B shares get ten votes per share owned. In case you haven’t figured it out, Kevin Plank holds most of those shares giving him lots of control. But, the board of directors had no problem with Kevin Plank’s class-y plan, unanimously passing it through. And why should the board take issue with it? Under Plank’s guidance, he led the company to a $17 billion valuation. The problem, however, that everybody seems to be wondering about, is what happens if Kevin Plank begins to under-perform?

Speaking of class-y shares…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Fitbit is getting pumped up to make its big ticker debut on Thursday and gearing up to offer 34.5 million class A shares which are set to go for between $17 – $19 a pop. That’s a bit higher than the $14 – $16 range it was going for a few weeks back.  That means the company, famous for its wearable fitness tracker,  could end up with a potential valuation of almost $4 billion.  And while you may bemoan the thought of exercise, there are a lot you out there who are eager to get fit, as evidenced by the $745 million in revenue Fitbit pulled down last year, earning a $100 million profit with that. Of course there’s still a lot of competition out there when it comes to wearable fitness trackers which has investors pondering just how Fitbit is going to set itself apart from the pack. Then there’s that other slight problem where users decide to ditch their trackers after just a few months. But hey, it’s only money, right?

Colt Arms Itself With Chapter 11 Protection; Target Teams Up With CVS; Another One Bites the Sawdust as Lumber Liquidator CMO Ousted

Out with a bang?

Image courtesy of vectorolie/FreeDigitalPhotos.net

Image courtesy of vectorolie/FreeDigitalPhotos.net

The maker of everybody’s favorite M16 rifle, gunmaker Colt Defense, has filed for bankruptcy. Famous for perennial firepower darlings, the Colt .45 and the “Peacemaker” – aka the gun that won the West – Colt saw delays in orders from both the US and foreign militaries, not to mention less demand for the company’s sport rifles, that caused its numbers to go into the red. Filing for chapter 11 in Wilmington, Delaware, the arms company already hit up Morgan Stanley for a $70 million loan, back in November, just to make an interest payment. Colt currently has about $500 million in assets and Chief Restructuring Officer Keith Maib wants to assure the public that “Colt remains open for business” while it attempts to figure out how to redo its balance sheets. Incidentally, this is not the company’s first trip down bankruptcy road. Colt, which was started by Samuel Colt back in 1836, also hit the bankruptcy skids back in 1842. The company rebounded and Samuel Colt went on to become one the country’s wealthiest men.

If you can’t beat ’em, join ’em…

Image courtesy of dream designs/FreeDigitalPhotos.net

Image courtesy of dream designs/FreeDigitalPhotos.net

Target’s ditching its pharmacy business in a $1.9 billion deal with CVS. The retailer came to some conclusions about the whole operation which basically had to do with money, and how much of it the pharmacy division wasn’t making. In fact, Target was actually losing money on it. Part of the problem is that the Affordable Care Act was just making everything so darn complicated and well, CVS is more equipped to handle the constantly changing landscape of healthcare while Target is best suited to sell stuff that consumers want and need but that don’t require prescriptions. So basically, Target is taking the pharmacies it already has housed in its locations and magically transforming them into CVS stores. Target expects that will bring in more traffic to its stores as CVS enthusiasts will flock to Target/CVS stores to get their prescriptions filled and then be compelled to step inside the store, filling up their red shopping carts with the kind of merchandise on which Target intends to place an increased focus to increase sales. Funny how that works, huh?

Saw it coming…

Image courtesy of sattva/FreeDigitalPhotos.net

Image courtesy of sattva/FreeDigitalPhotos.net

The latest executive to bite the Lumber Liquidators’ sawdust is Chief Merchandising Officer William Shlegel. The executive was on the job for four years before that scathing “60 Minutes” report aired back in March accusing the company of using formaldehyde-laced laminate flooring form China. Shlegel will be replaced by Chief marketing Officer Marco Pescara, who will pull double duty as he stays in his post while assuming his soon-to-be-former colleague’s role as well. No statement or comment was offered by Lumber Liquidators as to why Shlegel was shown the door, nor were there any comments about what, if any, his role was in the formaldehyde-laced flooring disaster. Of course, this latest switcheroo doesn’t even begin to solve the company’s tsunami of problems as the Justice Department is still seeking criminal charges against Lumber Liquidators, while it faces more than 100 class-action lawsuits. Sales of all the toxic flooring from China has been halted at the 360 locations. In the meantime, Lumber liquidators founder Thomas Sullivan has been playing CEO since the previous one, Robert Lynch ungraciously bowed out last month. The stock, to the surprise of…no one, has lost over 70% of its value in the last twelve months.

Whole Foods is Going 365; Chip Wilson Squeezes Out of Lululemon; Rupert Murdoch to Step Down But Not Out

Whole-y moley…

Image courtesy of  stockimages/FreeDigitalPhotos.net

Image courtesy of stockimages/FreeDigitalPhotos.net

It’s going to be tough now to complain that Whole Foods is too expensive and that going organic is for those with tons of disposable income. The grocery chain is set to open up its new line of stores, “365 by Whole Foods Market,” cleverly named after its house brand. Of course, 365 will also have other brands, as it would seem a bit lofty to fill an entire store with just the one band. The chain is set to open next year and not a moment too soon. Bigger chains, like Target and Wal-Mart have figured out ways to compete with Whole Foods’ 400 stores by offering organics too, except at much lower prices. Naturally, that has been putting quite a damper on Whole Foods’ sales and that ever-elusive group of organic-minded millennials let the grocery chain know it by taking their paychecks to chains whose organic fare is considerably less expensive. But 365 is expected to bring more bang for the millennial buck – and everyone else’s.  And bonus: President of the “365” division, Jeff Turnas aims to make the shopping experience at the new store “fun and convenient.”

On a sour note…

Image courtesy of SOMMAI/FreeDigitalPhotos.net

Image courtesy of SOMMAI/FreeDigitalPhotos.net

Looks like Lululemon founder and former CEO Chip Wilson wants to get some fiscal closure from the yoga-retailer by selling off his family’s entire 14.2% stake in the company. Considering the company posted better than expected earnings earlier in the week, it probably seems like a good time for Mr. Wilson to unload his 20.1 million shares, which are valued at about $1.2 billion. However, even with the best of companies, when an announcement is made that a considerable amount of shares are getting dumped, the stock goes south. And Lululemon was no exception, losing around 2% of its value at one point. But at least this brings a little more stability to the line as Chip Wilson’s last few quarters with Lululemon were anything but…zen.

The end of an era?

Image courtesy of pakorn/FreeDigitalPhotos.net

Image courtesy of pakorn/FreeDigitalPhotos.net

The Chairman and CEO of 21st Century Fox has left the building. Well, not quite but a reorganization proposal is in the works. The 84 year old mogul, Rupert Murdoch, has finally decided to hand over the reins to his son, James Murdoch, much to the surprise of…no one. James currently reigns semi-supreme as co-chief operating officer of the company. However, since the elder Mr. Murdoch still controls a majority of the shares, he’ll still be around a’plenty. So what’s to become of older Murdoch brother, Lachlan? He’s not going far either as he will step into the role of executive co-chairman, working alongside his little bro.  As for the current co-chairman, Chase Carey, who also serves as president of 21st Century Fox, the plan is for him to step down, graciously, of course, and take on an as yet unidentified role, as part of the reorganization plan. Awkward.