No-GoPro on Earnings; Could a Pfizer/Allergan Merger Become the Next Big Thing?; Wal-Mart Offers NO Free Shipping (limitations apply)

Worst. Day. Ever….

Image courtesy of jesadaphorn/FreeDigitalPhotos.net

Image courtesy of jesadaphorn/FreeDigitalPhotos.net

GoPro released its earnings yesterday only to tell us that it did not nail them. This came as a surprise to…no one.  Wall Street echoed its disappointment by sending shares down. Very down. So down, in fact, that the stock is hovering too close to its IPO price of $24 from back in 2014. GoPro miraculously managed to score $400 million in revenue, adding 25 cents per share. Too bad predictions called for almost $434 million and 29 cents per share. Meanwhile, the stock is down 67% for the year and the company is looking to buy back company shares, hoping to increase their value. While GoPro saw second quarter sales kick up by 72%, third quarter sales only increased by 43%. And the picture only gets grimmer as the company actually thinks sales will shrink during the ever-fiscally critical holiday season.  Part of GoPro’s problem is that it can’t seem to figure out how to transform itself from a product for a niche market to a product that spews mass appeal. Then we turn to GoPro’s Hero4Session. Besides the fact that the company initially charged too much for the product, GoPro also insists that the marketing budget for the already too-high priced product wasn’t large enough. Analysts aren’t too optimistic that they are gong to see much, if any, growth in GoPro’s camera unit in 2017. However, they are forecasting $500 million worth of revenue for GoPro’s other products. Go figure.

Erin Go Bragh…

Image courtesy of Pansa/FreeDigitalPhotos.net

Image courtesy of Pansa/FreeDigitalPhotos.net

Today’s latest tax inversion plans are brought to us by Pfizer and Allergan Plc who are in “friendly talks” to create the world’s largest drug maker.  While no actual agreement has been reached, the deal would have Pfizer heading towards Ireland where corporate tax laws are far more favorable there than they are here. Can’t you just smell the politics that are about to invade this deal? Tax inversions happen when huge companies set up shop overseas in countries where they don’t get as brutally taxed as they do here. For instance, while Pfizer has the pleasure of shelling out a 25% tax rate to Uncle Sam, Ireland-based Allergan only has to deal with a 15% tax rate. The prohibitive tax rate can put many U.S. companies at an unfair advantage, they argue. Democrats think these companies should just suck it up and stay put. They also think drug companies should simply slash their high prices. However, these drug companies say they can’t do that with such high tax rates imposed. Republicans want those tax laws changed to make them more favorable for these big companies so that they’ll stay put because they want to. Not because they are being forced to. If any deal goes through, it will likely be the biggest deal. Ever. Estimates for Pfizer to buy Allergan range from about $113 billion to $157 billion. But isn’t it worth every cent if it means adding everybody’s favorite aesthetic filler into your drug fold?

No such thing as ‘free shipping?’

Image courtesy of SundayMorning/FreeDigitalPhotos.net

Image courtesy of SundayMorning/FreeDigitalPhotos.net

If you can’t beat ’em…well do something they can’t do.  And that’s exactly why Wal-Mart is scrapping free shipping this holiday season on items that are less than $50. The idea is to instead offer free shipping – for in-store pick up. After all, there are approximately 4,600 Wal-Mart stores from which to choose. Besides, Wal-Mart’s hoping that while you’re picking up an ordered item, you’ll impulsively pick up some other items.  And companies love impulse shoppers.  To entice you to use this method, Wal-Mart is even allowing you to check-in at the store with your smart phone for expedited service. Wal-Mart’s hoping that this new shipping policy will help its profit margins, which have taken a bit of a hit, in part, because of shipping costs. And with 210 million consumers expected to use Wal-Mart’s mobile app, the giant retailer is banking that in-store pick-up will reverse those hits.

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Icahn: A Man of Letters; IBM Looks to Weather Some Storms; Twitter Has Yet to Impress

Icahn. Therefore I am…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Carl Icahn took time out of his busy schedule of haranguing Congress and ousting CEO’s to write yet another letter, this time on his website, to insurance company AIG. Icahn now owns a sizable chink of the company, though exactly how much remains a mystery. He only tells us that it is very “large.” I, for one, believe him, just cause it’d be kind of weird to make something like that up. Besides, he usually goes big. In his advice letter to AIG, the activist investor writes, “There is no more need for procrastination.” He wants AIG split up into three separate divisions because he’s not digging the company’s “Systemically Important Financial Institution” status, or SIFI if you’re feeling funky.  If you find that term a bit too clunky, then, by all means, refer to it by its other more user-friendly term, “Too Big To Fail,” as in the 2008 fiscal crisis and the HBO movie of the same name (that starred Bill Pullman  as JP Morgan Chase’s Jamie Dimon and Ed Asner as Warren Buffet). Icahn believes that when a company gets SIFI status it’s bad. It’s like a tax. A tax of a bunch of regulators breathing down your fiscal back with heavy breaths of federal oversight. Companies that don’t get saddled with that status are more valuable to shareholders, in Mr. Icahn’s not-so-humble opinion. Icahn wants to divide AIG into a property and casualty coverage division, a life insurance division, and a mortgage backing division. Then he wants to throw in some cuts and have AIG buy back some stock. After that, he feels AIG will start trading closer to its book value at about $100 a share. Right now the stock is trading at just under $64 and trades for less than 80% of its book value (which, by the way measures assets minus liabilities). As for AIG CEO Peter Hancock, well, Icahn will probably find a way to kick him out of AIG if he doesn’t take his advice.

Super duper…

Image courtesy of  Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Today’s big shopper is IBM, who is getting set to acquire The Weather Co.’s digital assets. In case you were wondering (because I know you were), those digital assets are its websites and apps. The channel, however, stays put, as it doesn’t really fit into IBM’s master plan. That master plan involves IBM beefing up its Watson Internet of Things Unit, its artificial intelligence unit that puts the super in supercomputer. The data supplied by the deal will give Watson the ability to create accurate forecasts – is that an oxymoron? – and will be able to provide commercial clients, from airlines to insurance companies, and beyond, very precise information. While the exact terms of the purchase have yet to be disclosed, the deal is rumored to be valued at around $2 billion. Naturally, shares of IBM took a little ride on the uptown train because of the super news.

These are the not quite the Moments…

Image courtesy of bplanet/FreeDigitalPhotos.net

Image courtesy of bplanet/FreeDigitalPhotos.net

Twitter is down 13% for the year and another 11% just today, and yet the micro-blogging site still beat the street. The social media company pulled down $569 million in revenue adding ten cents per share. Analysts predicted that Twitter would score closer to $560 million and add only a nickel per share. In terms of last year at this time, Twitter was up 58%. But here’s where things start to go south. The company revised its fourth quarter profit outlook between $695 million and $710 million. That seems like a whole lot of cash except that analysts were expecting numbers closer to $740 million. Then we turn to growth. There wasn’t that much of it.  Twitter only managed to add about 4 million new active monthly users. A very unimpressive 11% increase over the same time last year. Analysts, however, are still optimistic that launches, including the much-hyped Moments, and its increasing ad revenues will help turn the company’s fiscal tide.

No Slowing Down Alibaba; REI VS. Black Friday; Rumor Has it Walgreens is Going Shopping

Slowdown? What slowdown?

Image courtesy of  jesadaphorn/FreeDigitalPhotos.net

Image courtesy of jesadaphorn/FreeDigitalPhotos.net

There might be an economic slowdown in China, but judging by Alibaba’s recent earnings, you’d never know it. China’s largest e-commerce site easily topped Wall Street predictions, adding 57 cents per share on $3.5 billion in revenue. Forecasts were for 54 cents on $3.35 billion. The company saw a 32% increase with a lot of help from major growth in mobile revenue. Mobile revenue alone pulled in a staggering $1.66 billion, triple last year’s figures, and accounting for more than 60% of the company’s retail sales. And its monthly mobile active users only continue to grow, up 57% over the same last year, an easy feat for Alibaba, yet something hundreds of other companies wished they could do. Yahoo also came out a winner today, as well, since it owns a 15% stake in Alibaba.  The company also plunked down about a $1 billion for some cloud computing investments which could see some big returns. Now Alibaba is gearing up for Singles Day, as in November 11, as in 11/11, one of the countries biggest shopping days. Last year, the company hit a record $59 billion in sales on that day and chances are it might just break that record again this year. Now about that downturn..

Take it outside…

Image courtesy of  marcolm/FreeDigitalPhotos.net

Image courtesy of marcolm/FreeDigitalPhotos.net

Don’t bother getting on line at 5 am on Black Friday outside of any one of REI’s 143 locations. Don’t bother looking for any Black Friday coupons, discounts or promotions from REI either. REI president and CEO, Jerry Stritzke, announced today that its stores will be CLOSED on what is considered one of the most important shopping days of the year. Stritzke is giving his 12,000 employees a paid day off “so they can do what they love most—be outside.”  The company, which brings in annual sales of $2.2 billion, is hoping that consumers will follow suit instead of spending the day spending money. The company has set up a special website, optoutside.rei.com, that among other things, recommends hiking trails, that will presumably remind you of all the gear you need to go and buy at REI once the stores re-open. That’s no joke. As far as PR goes, this is one tactic that is sure to help the company rake in more sales this holiday season than in year’s past. Considering that in 2014, sales from Black Friday weekend actually declined 11%, staying closed on Black Friday, doesn’t seem so insane after all, even though the day has always ranked as one of REI’s ten best sales days, And if you’re jonesing to spend some money online at REI on Black Friday, don’t hold your breath as your order won’t even get processed until Saturday.

Keeps growing and growing…

Image courtesy of Serge Bertasius Photography/FreeDigitalPhotos.net

Image courtesy of Serge Bertasius Photography/FreeDigitalPhotos.net

The Wall Street rumor mill is all abuzz with talk that Walgreens Boots Alliance is about to scoop up smaller competitor Rite Aid for upwards of $10 billion. That might be a very generous offer considering that even after shares of Rite Aid jumped 36% to $8.27, the company’s valuation was still only around $8.7 billion. But again, this is all just rumor. For now. Until today, shares of Rite Aid were down 29% since it announced last month that it was lowering its profit and revenue forecast. The move will up Walgreen’s game in the $ 263 billion drug distribution industry where it currently holds 31% of the market share to CVS’s 58%. Rite Aid’s share is but a paltry 10%.  Profits from this industry are a very lucrative $10.3 billion. So who can blame Walgreens for wanting to stake out a bigger share. Walgreens Boots Alliance CEO Stefano Pessina recognizes the United States’ government’s ever-growing role in the pharmaceutical industry all because of the Affordable Care act aka ObamaCare, and he thinks consolidating U.S. pharmacies could yield some massive returns. Of course, Walgreens and CVS still have to contend with competition from online, mail-order and wholesale pharmacies, but for now, they’ll satisfy themselves with bigger fry. Incidentally, Walgreens is supposed to report its fourth quarter results tomorrow.

Manny, Moe & Jack. And Bridgestone; Slumpy Times for New Home Sales; Xerox’d Out?

Feeling tire-d…

Image courtesy of Rawich/FreeDigitalPhotos.net

Image courtesy of Rawich/FreeDigitalPhotos.net

Tokyo-based Bridgestone Corp., purveyor of tires and other automobile services, is about to infiltrate the Manny, Moe and Jack trifecta by scooping up the Philadelphia-based auto parts and repair company for about $835 million. Bridgestone is looking to stake out some bigger territory in the auto-service industry and adding Pep Boys to its team will add an additional 800 locations to Bridgestone’s other 2,200 stores. Yeah, it’s that big.  Incidentally, Nashville-based Bridgestone America accounts for almost half of the company’s total global sales. I guess Americans love their Bridgestone.  In the meantime, while Pep Boys did manage to score a $4.8 million profit, Wall Street was most definitely not impressed, as it didn’t hit expectations nor has the company been as successful as rivals AutoZone and  Advance Auto Parts Inc. Pep Boys had been on the lookout for a way to beef up shareholder value and, lo and behold, Bridgestone’s offer of $15 in cash per share, a 23.5% premium over Pep Boys closing price on Friday, proved to be a winner (after previous attempts, mind you). Shares of Pep Boys got a little jump from the news, which usually means investors dig the sale too. The sale is expected to close by the beginning of 2016.

Housed…

Image courtesy of cuteimage/FreeDigitalPhotos.net

Image courtesy of cuteimage/FreeDigitalPhotos.net

What do you get when you combine rising real estate costs and a U.S. economic slowdown? A new home sales slump. That’s no joke as new home sales for September plummeted 11.5% to 468,000 homes, its slowest pace in 10 months, according to the U.S. Commerce Department. Analysts predicted that 555,000 new homes would sell. Ouch. But analysts are also telling us to stay calm, soldier forth and don’t bother reading too much into this month’s very disconcerting figures. Are we also not supposed to read too much into the fact that new home sales all but tanked – precipitously – in the northeast? I personally am finding it a bit of a challenge not to read too much into that 61.8% drop. But then again, I’m no analyst. In any case, new home sales account for a paltry 7.8% of the housing market while existing home sales account for 90% of the residential real setae market. And oddly enough, sales of existing homes actually rose 4.7% to their highest pace in eight years. By the way, sales positively soared in the first nine months of the of the year by 17.6%, not to mention that the median price of a home rose 13.5% from last year’s $261,000 to this year’s $296,900. We should also thank the mortgage gods whose low-ish rates have kept those sales figures from being that much more frightening. So perhaps it is alright to breathe a tiny sigh of relief. A teeny tiny one.

Don’t copy that…

Image courtesy of Serge Bertasius Photography/FreeDigitalPhotos.net

Image courtesy of Serge Bertasius Photography/FreeDigitalPhotos.net

Remember Xerox? Well, neither does Wall Street, it seems, as the 109 year old company (who knew?) took a $34 million loss at 4 cents a share and reported its first net loss since 2010’s first quarter. To be fair, Xerox still beat expectations. Barely. The company has lost a quarter of its value and had to cut close to 1,800 jobs so far this year. However, the company still says that it is not considering a sale. Yet. As companies have been slashing their printing costs, not to mention the rise of mobile devices doing their share to save the trees, Xerox is finding itself in a fiscal pickle and forcing itself to make some major changes to prove its relevance. And what better way to do that than to focus on making software and offering amped up services? That’s what I’m talking about. But in the meantime Xerox is “undertaking a comprehensive review of structural options for the company’s portfolio.” Which basically means they’re trying to figure out how to start making money instead of bleeding it.

Golden Earnings for the Golden Arches; European Bitcoin Victory; Say It Ain’t So: Lego Brick Shortage

You deserve a break today…

Image courtesy of tiverylucky/FreeDigitalPhotos.net

Image courtesy of tiverylucky/FreeDigitalPhotos.net

Looks like McDonald’s CEO Steve Easterbrook’s job looks pretty secure for the foreseeable future now that McDonald’s posted some awesome third quarter earnings. The numbers were so good that shares of the company jumped 8% and took the Dow Jones Industrial Average up more than 250 points as well. Sales in the U.S. brought a nice little surprise of a 1% increase. And even though wage raises and benefit improvements did take a big chunk out of the Golden Arches operating costs, the company still earned $1.31 billion and $1.40 per share. That was a 23% jump over last year’s $1.07 billion with $1.09 added to shares, and marked the first time in two years that McDonald’s saw improved sales.The much-hyped turnaround plan is actually working with thanks in part to McDonald’s All-Day Breakfast and the introduction of the Premium Buttermilk Crispy Chicken Deluxe Sandwich. Try saying that one five times fast. Or even three. Some franchises, however, are’t digging this all-day breakfast because, besides adding many more menu items, those breakfast items tend to be cheaper and negatively affect sales at some stores. Revenue fell to $6.62 billion, but it was only a 5% drop from last year’s $6.99 billion. And considering that Wall Street expected  McDonald’s to pull in only $6.41 billion and $1.27 per share, nobody’s too upset over that 5% dip.

VAT do you want already?

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Score one for Bitcoin as the virtual currency is considered tax-free. Well, in Europe, anyways. Just like plain old, regular, not-so-virtual cash. Europe’s highest court ruled that  Bitcoin and other virtual currencies are on par with real money and European citizens can scoop up as much of the virtual stuff as they want without having to pay VAT – a  tax that presumably taxes the nerves of anyone who has to pay it. This piece of Bitcoin drama began with Swedish Bitcoin operator David Hedqvist who felt that the currency should not be taxed. However, the Swedish tax authority, Skatteverket, disagreed vehemently and brought the issue to EU’s highest court. And while David Hedqvist is no doubt celebrating this recent victory, there is still one aspect about Bitcoin that has yet to be determined: is it legal tender? To be continued…

Everything is not Awesome…

Image courtesy of  nonicknamephoto/FreeDigitalPhotos.net

Image courtesy of nonicknamephoto/FreeDigitalPhotos.net

Scary news from the world’s largest toymaker, Lego. It seems the Danish plastic brick manufacturer might not have enough brick’s to go around. But rest assured, that here in the States, our plastic brick supply is safe. For now. With The Lego Movie, Star Wars and The Avengers all part of the Lego family, the company can’t seem to make enough toys to keep up with the demand. In just the first half of the year, sales for the toys were up a whopping 18%. To help alleviate some of the shortage, Lego will be expanding three factories in Mexico, Hungary and, of course, Lego’s hometown in Denmark. The company even has plans to expand in China. But everything may still not be awesome in certain parts of Europe, as they are likely to be affected by this very tragic plastic brick shortage.

Activist Investor Sets His Fiscal Sights on Congress; Ferrari Races to IPO; UPSet

Icahn do it…

Image courtesy of  iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

Many U.S. companies are taking a breather for the moment since billionaire activist investor, Carl Icahn, has shifted his attentions away from struggling businesses and instead to Washington D.C. And just like he ousts under-performing CEO’s, he now plans to give the boot to under-performing congressman.  Icahn tweeted  earlier today, “I am starting a Super PAC with my initial commitment of $150 million to help end the crippling dysfunction in Congress.” I’m just wondering why his millions are going to be more effective than the millions of taxpayer dollars Americans have been throwing at congress until now. But I digress. Icahn, by the way, happens to be a dear pal of Presidential candidate Donald Trump. “Basically he’s by far the best of what I see out there,” and “The Donald” would like to install Carl Icahn as his treasury secretary. Laugh all you want, but with Trump pulling in some great numbers, you might end up crying come November 2016. This Super PAC has  more than a bit to do with the letter Icahn sent out to Congress this week demanding that it pass corporate tax reform legislation that would dissuade U.S. companies from leaving to other countries with more favorable tax laws at what Icahn calls “the worst time imaginable.” He also wants Congress to offer companies like Apple a “tax holiday” that would allow it to bring back its trillions of dollars at much much lower rate. That cash can then be used to invest and create jobs. Sounds fair.  Boom.

Ciao bella…

Image courtesy of sattva/FreeDigitalPhotos.net

Image courtesy of sattva/FreeDigitalPhotos.net

Ferrari, one of the world’s most valuable and utterly fabulous brands, made its U.S. stock market debut today in true Ferrari-style. Several of the high-performance, extremely pricey automobiles were parked by Wall Street, as the company stock opened at $52, the high-end of its range. And from there, the stock even cruised a bit higher. $893 million was raised and 17.18 million shares were dished out under the ticker symbol RACE. Catchy, huh? And just like it’s hard to come-by cars, there was more demand than there were shares. The IPO is a way for Fiat Chrysler to finance a $54 billion investment program that will help expand the Jeep, Alpha Romeo and Maserati brands. As for the Ferrari family, the founder’s son, Piero Ferrari, has a 10% stake and has now earned his billionaire badge with this IPO.  The Agnelli family, however, remains the biggest shareholder with more than a 30% stake in the company. In the meantime, Fiat Chrysler CEO, Sergio Marchionne, took time out of his busy morning from ringing the opening bell at the New York Stock Exchange to let the world know that he thought the EU’s charges that his company evaded $23 million in taxes “absolutely ludicrous.” He should really start hanging out with Carl Icahn.

Brown paper packages tied up with false claims…

Image courtesy of Iamnee/FreeDigitalPhotos.net

Image courtesy of Iamnee/FreeDigitalPhotos.net

UPS is not having a very good day after having to fork over $4.2 million to settle charges that it over-charged 17 states and three local entities. It seems the company falsely recorded packages reaching their destination on time when, in fact, they didn’t.  Customers paid to have packages delivered via next day service, however, those packages did not arrive by the promised time. These incidents ran from 2004-2014. UPS employees used “exception codes” and filed false claims that would excuse late arrivals for reasons like inclement weather and other difficult circumstances.  By using these codes, customers could not even file a claim to get a refund. And while whistleblower Robert Fulk can look forward to a piece of that $4 million pie, UPS has no plans to acknowledge any wrongdoing, even though the company already had to pay $25 million for a different settlement with the U.S. Department of Justice back in May for similar allegations. The company says it ponied up the settlement cash in order to avoid a costly litigation trial. Uh huh.

Harley’s Rough Ride on Wall Street; Madoff Victims Pay Day; Amazon Wants You. Really.

Rough riding…

Image courtesy of sritangphoto/FreeDigitalPhotos.net

Image courtesy of sritangphoto/FreeDigitalPhotos.net

Harley-Davidson is no match for Wall Street as the all-American bike gets whipped by yet another rough quarter.  With sales down 2.5% in the U.S. and another 1% worldwide, Harley-Davidson brass have made a brutal decision to cut a bunch of jobs and ship out 11,000 less bikes next year. Instead, the company will dish out $70 million to increase its 2016 marketing budget. The company is hoping (and presumably praying) that it can increase product and brand awareness. And get people to buy more bike, of course. But how is it even possible that a brand as iconic as Harley would need to do such a thing? While there’s no disputing that there’s nothing like a Harley, the company is facing increased competition from European and Asian bike makers, like Ducati, Royal Enfield and Triumph. Those companies are putting out some fierce machines, and in some cases, for a lot less money than a “hog.” The proof is that in the first nine months of the year, the number of registered bikes has surged 6.6%. Net income for Harley-Davidson came in at $140.3 million, a 6.5% decrease over last year’s $150 million. Harley added 69 cent per share when analysts predicted 78 cents instead. In fact, shares fell the most that they have in six years.  But that isn’t stopping Harley-Davidson from plans to open up 200 more dealerships abroad.

Lost and found…

Image courtesy of bplanet/FreeDigitalPhotos.net

Image courtesy of bplanet/FreeDigitalPhotos.net

It’s been seven years since Bernie Madoff’s evil Ponzi scheme unraveled. But today, more than 1,200 of his victims (there were way more than that) can sort of rejoice and look forward to recouping at least some of their lost funds. Irving Picard, the trustee who has been hard at working recouping money on behalf of the victims of the largest Ponzi scheme in U.S. history, has managed to release $1.5 billion from legal reserves. Victims who invested up to $1,161,000 can expect to get back about $1 million. Those who unfortunately invested more can expect to recoup 61 cents on the dollar.  Much of this money is coming from the widow of Madoff’s deceased alleged co-conspirator Jeffery Picower.  She agreed to turn over $7.2 billion of her late husband’s ill-gotten stash. Of course, some of that cash, approximately $1 billion, will also go towards covering all those enormous legal fees of the law firm handling this case. U.S officials have so far recovered about $11 billion from the $17 billion that was lost. As for Bernie Madoff, he’s hitting year 7 of a 150 year prison sentence.

Hire cause…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

If you’re looking to score some extra cash this holiday season then don’t let the New York Times get in your way and  dissuade you from applying for a job at Amazon. I bet Amazon is hoping the NYT doesn’t dissuade you either since the company is looking to hire 25,000 full-time employees and 100,000 part-time employees for the holiday season. While the company has always hired more people for this time of year, this time the digits are pretty epic in that they’ve never been this high. It should be duly noted that plenty of people who had been hired specifically for the holiday season were subsequently kept on as permanent employees.  The jobs will be primarily in the sorting and fulfillment facilities across the country.  But Amazon’s not the only game in town as Target, Wal-Mart, Macy’s, Kohl’s and a slew of other companies are also looking to amp up their workforces this holiday season. Just be sure not to ask Bo Olsen for a reference.