Supreme Smackdown to Apple; Wall Street Bonuses Shrink, But I’d Still Take One; Amazon Store: The San Diego Sequel

Un-appealing…

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Not everyone has the ability to say no to one of the world’s most valuable companies. But the Supreme Court did just that to Apple when it graciously told its lawyers that it was not interested in hearing its appeal on an earlier ruling from June of 2015. Now, the iPad maker has to pony up some $450 million for its role in conspiring with publishers to increase book prices that apparently violated Federal antitrust laws. Apple feels that this ruling will “chill innovation and risk taking.” Maybe. But consumers still didn’t appreciate the way that Apple caused e-book prices to go from $9.99 to $12.99 and $14.99. Except Apple didn’t act alone, bringing in Hachette Book Group, Harper Collins, Penguin, Simon & Schuster and MacMillan to help fleece e-readers everywhere. Basically, any publisher from whom you’ve ever read a book helped facilitate this antirust breach. Apple wanted to make sure the iPad got a nice little boost when it made its grand debut in 2010. So publishers got to set the price they wanted for e-books on Apple devices and in return Apple would enjoy a 30% cut of sales. This, my friend, is the nefarious practice known as “agency pricing.” Publsihers played along because they didn’t like that the price of e-books on Amazon was going down and this method provided a convenient way to recoup that cash. The publishers started charging Amazon the same prices that it charged Apple, forcing Amazon to raise its prices also. Apple will pay $400 million to e-book customers in the form of credits, in addition to $20 million to the thirty states that sued. Of course, that doesn’t include the $30 million in legal fees that Apple’s lawyers get to collect or the changes that Apple is being forced to make to its business practices.

Whose your daddy…

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New York State Comptroller Thomas DiNapoli released some pricey data for one of New York’s top industries: Securities. Not that this will have you shedding tears, but the average Wall Street bonus fell 9% for 2015, checking in at $146,200. And while most people don’t come close to making that kind of cash in a year, the average Wall Street-er scored that, in addition to his or her salary. While that salary might seem high, consider that in 2006, the average Wall Street bonus was $191,360. And even though a whopping $25 billion worth of bonuses were awarded in 2015, it was 6% less than the previous year, as profit from broker-dealer operations dropped $1.7 billion to $14.3 billion. Profits for the six biggest banks hit $93 billion, by the way, which is more than 35% higher than the previous year. If you can believe it, that figure is still not as high as it should be and signals that the economy is still having a hard time bouncing back from 2008’s fiscal crisis. If you’re thinking about a career in securities, that might not be such a bad idea as the average Wall Street salary rose 14% in 2015 to $404,800. Except that prospects for 2016 look a bit grim and are actually expected to drop. There are approximately 172,400 people employed in the securities industry and 4,500 jobs were added in 2015. That figure, however, is still 8% less than it was pre-2008 fiscal crisis. By the way, these figures, we are warned, are not accurate estimates since they don’t include stock options and other forms of deferred compensation. The numbers also don’t include those for securities employees outside of New York City.

Isn’t it ironic…

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Mega e-commerce site, Amazon, arguably best known for being the largest online marketplace in the U.S. – not to mention some really great television –  is poised to open its second brick-and-mortar store where it will sell books, naturally, in addition to its own comprehensive line of tablets and devices. In fact, there will be nothing in the store that you wouldn’t be able to purchase on the company’s website. Rumors of the brick-and-mortar first surfaced when a big sign went up during the summer over the vacant space in a swanky San Diego mall. Then, last month, job postings for the 7,500 square foot store began appearing. Amazon’s store will be in good company as Tesla and Apple will be its mall neighbors. Meanwhile, the revenue expected from setting up an actual store isn’t expected to leave any meaningful dent in the company’s earnings. I guess it’s just a cute gesture for people who prefer to leave their homes to enjoy an actual physical shopping experience.

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The List of Best Companies is Here; Sports Authority Calls it a Game, Files for Bankruptcy; Angie’s List Free as a Bird Now

In good company…

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Because there’s nothing like a list to grab your attention these days, Fortune Magazine just published its latest list of the “100 Best Companies to Work For.”  For the seventh year in a row, Google tops the list. And how could it not? After all, Vince Vaughn and Owen Wilson did make a movie about being interns there, so how could it not be the best company to work for? The Container Store takes the 14 spot. As a customer, I already spend inordinate amounts of time in their stores fantasizing about how organized I could become. Hmm. Maybe I should check the company’s job board. Recreational sporting goods company REI snags the 26th spot. If you recall, they made Glassdoor’s list of companies with the best perks.  Good perks make for happy employees who vote for their own companies to win big on these lists. Publix Supermarket came in at 67. As the largest employee-owned company, Publix has extremely low-turnover and plenty of perks that keep employees satisfied for decades. You might want to check if your company is on the list. If not, then consider tidying up your LinkedIn profile as there are currently over 100,000 job openings at these companies that are just waiting to be filled.

Disregard for authority…

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Sports Authority has gone bust and is set to start closing its doors at about 140 locations as early as tomorrow, including 25 stores in Texas and 19 in California. Sports Authority managed to rack up $1.1 billion debt as it failed to keep up with current consumer trends. There’s a chance that another company will pick up Sports Authority’s debt-riddled pieces and give the sporting goods company a second profitable chance. But if April comes along and Sports Authority has no buyer, it will throw in the proverbial fiscal towel and close down its remaining locations. If you have any gift cards for Sports Authority, you might want to use ‘em up NOW while Sports Authority still honors them. Need to return or exchange merchandise? Good news! You still can…as long as you’re near one that didn’t close. Warranty related issues keeping you awake at night. No worries. Sports Authority can still service those items. Sports Authority is even carrying on with its customer loyalty program (there’s a joke in there somewhere) – at the locations that are still open anyway.

Free ‘em up…

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Angie’s List will now be free for the masses. Sort of. The review site will now allow visitors to read reviews and ratings…without having to fork over the security codes on their credit cards. However, tiered subscription services will be offered to those looking for a few extra benefits not included in freemium subscriptions. There’s going to be a $24.99 silver subscription and a $99.99 gold subscription. While those offers might seem a little pricey, they come with big benefits like an emergency service hotline and fair price guarantees. A small price to pay for some big peace of mind. Even though the company went public way back in 2011, it didn’t churn out its first annual profit until 2015. But today, shares went up almost 4% on the news, especially because this freebie subscription idea was all part of a bigger plan to help the company grow and make it more profitable. It’s also a major reason why the site dissed IAC’s HomeAdvisor’s bid last year. Angie’s List found the $512 million, $8.75 per share bid a lowball offer and said it undervalued the site. According to CEO Scott Durchslag, who has held his post for just six months, the current model made it harder for the company to grow. Besides, the company felt that millennials aren’t going to bother paying for reviews and it does seem to be all about those pesky millennials lately, doesn’t it? Angie’s List did have to revise its full year guidance and now expects to take in between $345 million and $355 million when analysts were expecting numbers closer to $362 million. The reason being is that 20% of the company’s revenue comes from those subscriptions. However, the company now figures that, going forward, it will be able to hit $750 million by by 2020. Angie’s List brass are expecting to “see traffic explode” under this new model.” The site currently has approximately 3.3 million subscribers but expect that number to catapult real soon.

The List of all Lists; Kate Spade’s Numbers Need to Get Accessorized; GoPro Goes Big With Latest Acquisitions

A-listers…

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Forbes unleashed its latest list of the world’s richest people just in time to make you feel really bad about yourself. 1,810 billionaires made the list and their combined net worth is a mind-blowing $6.48 trillion. But don’t be too impressed since that figure is actually $580 billion less than it was last year. Hey, times are tough. There are 16 less billionaires this year and 540 of them are living large in the United States. The gender gap managed to rear its ugly face on this list as only 190 women made the cut, with 65 here in the United States. Unfortunately that figure was down from 197 last year. Heiress and L’Oreal businesswoman Lilliane Bettencourt is the highest ranked woman, taking the 11th spot with a net worth of $36.1 billion. For the third year in a row, Bill Gates is sitting pretty at the top with a net worth of $75 billion. However, to be fair, he is $4.2 billion poorer than he was last year. My heart aches for him, really. Like Zara clothing? Apparently most people do since its owner, Amancio Ortega, ranks in the number two spot. Warren Buffett, no surprise, takes third while Carlos Slim snags the fourth spot. Facebook’s 31 year old Mark Zuckerberg took the sixth spot with his $44.6 billion and becomes the youngest billionaire in the top ten. Lucky him. And whether you love him or hate him, Donald Trump did make the list with an estimated net worth of $4.5 billion.

Accessorized…

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Kate Spade almost fell out of fashion on Wall Street today when the company reported that its fourth quarter sales fell short, coming in at $62 million and adding 32 cents per share. The company missed estimates by a penny and posted a 51% decline from last year  when the company saw $126 million with 49 cents added per share.  At least its revenue was up 7.6% to $429 million, although analysts did expect that number to ring in closer to $442 million. Oh well. Maybe next quarter. Yet, Kate Spade shares rose as high as 6.7% today. And why shouldn’t they? After all, the swaggy design house is expanding its merchandise into home decor and children’s apparel, prospects that have Wall Street tongues wagging, if ever so slightly. The company has had quite the quirky fiscal ride as it was down a staggering 42% for the last twelve months yet managed to creep up 12% since the beginning of the year. That was happening even while the almighty S&P was going down 5.5%.  Go figure.

Pro-active…

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What to do when your company takes a vicious downward spiral killing 70% of its value? You go shopping, of course. And that’s exactly what GoPro Inc. CEO Nicholas Woodman did. The action-camera exec announced he is plunking down $105 million to buy not one, but two video editing applications, in hopes of beefing up one of the company’s bigger problem areas.  Wall Street responded kindly by sending shares up and let’s face it, GoPro shares need all the help they can get. GoPro’s acquisitions are Replay and Splice, applications that will allow users the ability to easily cut and publish footage on their mobile phones. Given that Woodman himself called he GoPro editing experience an “inconvenience,” these acquisitions seem like a prudent move. Too bad, however, that this move comes on the heels of GoPro’s decision last month to cut 7% of its workforce after weak holiday sales and slashing the price of its newest camera by 50%. That’s what happens when you’re staring into a crowded market of action-cameras. But, taking a page from Warren Buffett, Woodman is optimistic that 2016 will be a record year for GoPro. Let’s hope so since 2015 saw GoPro’s stock hit an all-time low.