On second thought…
Today father-daughter Redstone team, Shari and Sumner, announced that they are no longer interested in a merger with sister company CBS. It was Shari Redstone who said as much in a letter from the family’s privately-held company National Amusements Inc. She gets to do that sort of thing since, after all, she controls the voting shares of both Viacom and her dad, which altogether adds up to 80% of the voting stock. Wall Street wasn’t too happy about Viacom finding its own way sans CBS and not only sent the stock down 7%, it also took Viacom to a 52 week low. The two companies were actually merged once upon a time, but back in 2006 went into splitsville. Initially, the merger was meant to give Viacom a much needed boost. But the father-daughter duo decided to put the kibosh on the merger because they apparently developed renewed confidence in Viacom’s prospects under the leadership of its new CEO Bob Bakish. At least that’s how team Redstone spun it. However, rumor has it that it was because CBS chief Les Moonves wasn’t on board for a number of reasons. For one, Viacom was looking to get a premium on its shares and CBS wasn’t willing to pay for it. Also, Moonves wanted control of both companies along with increased equity and the Redstones weren’t too keen on giving him all that. Other sources say that Moonves wasn’t even interested in trying to fix Viacom. Had the merger gone through it would have resulted in a massive media giant.
President-elect Donald Trump’s latest Tweet target is Lockheed Martin’s F-35 program. Naturally, his Tweet dumping on Lockheed Martin sent the stock south along with several other defense contractors. Trump said that come January 20th, he plans to save billions of dollars on the aircraft that he described as being “not very good” according to his very expert opinion. Lockheed Martin said that it already spent millions to reduce costs on the 5th generation fighter aircraft by more than 60% and I am pretty sure there is a joke somewhere in there. But it’s not just Trump who thinks the program’s costs are bananas. A voice of reason who we know as John McCain, and who also serves as the Senate Armed Services Chairman is critical of the program. He wrote a letter to the Pentagon challenging the $1 billion cost overrun for the program. But Lockheed Martin said that it creates 146,000 jobs in the U.S. and Puerto Rico, besides the fact that analysts also feel the aircraft is necessary since Russia and China have highly advanced competitive fighter aircraft. We wouldn’t want to let them have the upper hand as far as our defense goes, now would we? There are six other countries who also use the jets and 3,000 planes are supposed to be built for the U.S. and other countries. The estimated cost of the program is about $400 billion and has the dubious distinction of being described as the most expensive weapons system in history. The fact that other countries participate in the program is supposed to help spread out the costs a little more. However, it’s not clear exactly how much their participation has helped the U.S.
Coffee, tea or Jay-Z?
JetSmarter, a company that is basically Uber for flying privately can now count Jay-Z and the Saudi Royal family among its investors. The company has so far raised $157 million with $105 million raised just in its latest round. JetSmarter founder and CEO Sergey Petrossov discovered a very lucrative opportunity when he realized that 35% of private planes have no passengers. With 50 routes in 30 cities around the world, JetSmarter wants to take its latest cash-infusion to expand into Asia, South America and Africa. Plenty of other similar start-ups have failed so how come JetSMarter hasn’t? Apparently because seat prices on Jet Smarter change based on predictions about the popularity of certain routes and flight times. JetSmarter allows its members to buy empty plane seats from private jet companies and sell them through its app. The company boasts 6,700 members and currently, a membership will set you back about $15,000 for the first year and $11,500 per year after that. But hey, that gets you an average of 12-15 flights per year. However, if you decide to create a charter flight or want to take a member created flight, that costs extra. And while the company does not own any of its own planes, it does have about 32,000 aircraft in its network with a $1.6 billion valuation.