AT&T vs. U.S. Government. And President Trump; Turkeys: CBS and Dish Networks Can’t Work Things Out; Lowe’s and Behold! It’s Earnings Win

Trump’d up suit?

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Dontcha just love a good fight? Today’s nasty dispute is brought to us by the U.S. government and AT&T. Not sure who my money’s on yet. You see, the government isn’t down with AT&T’s proposed $85 billion vertical merger with Time Warner. So it went ahead and did the most “American” thing possible: It sued AT&T to block the merger. Knowing that the U.S. government was going to be pesky about the merger, AT&T did what any smart company would do: It pre-emptively retained counsel. And AT&T went for the big guns hiring Dan Petrocelli. You remember him, dontcha? Or maybe you’re just trying to forget? He’s the dude that very shrewdly defended President Trump over lawsuits relating to the infamous Trump University real estate seminars. Oh, the irony. Trump hates the very thought of the merger and that may have something to do with his feud with CNN, which, incidentally, is owned by Time Warner. Petrocelli, who seems to have forgotten all about his Trump days, is arguing that not only does this lawsuit not pose a threat to industry competition, but the merger actually has the potential to lower cable bills. However, I have a hard time believing a cable carrier would willingly lower bills. As for investors, they seem to be on Team AT&T and believe the telecommunications giant will emerge victorious, especially because the last time the government was successful against a vertical merger, Nixon was president. Yikes!

Whose the turkey now?

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OMG! It’s football season and Dish Networks did the unthinkable – to football fans, anyway – and dropped CBS in some markets. “Some markets” includes over 3 million customers in 18 cities who will be feeling the effects of tryptophan sans quality NFL time if a deal is not reached by kickoff time. As if blocking football games isn’t bad enough, some viewers will even be getting deprived of “The Big Bang Theory” which is just so not cool. The issue, of course, is fees. Because it always is. Dish isn’t happy about CBS’s demands for higher fees, especially since Dish viewership is down (note: Google streaming on-demand video). Dish also insists that viewers are watching less CBS and feels that CBS ought to show a little more restraint in its fee demands. CBS, on the other hand, is accusing Dish of punishing its viewers while Dish is calling foul on CBS for not extending its contract until negotiations end.  However why any of this matters is beyond me since, invariably, those fees, on which the two sides eventually agree, usually end up getting passed on to subscribers via their monthly bill anyway. Now subscribers have something to look forward to once those inconveniently-timed negotiations come to a close.

Hurricane win…

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Hurricanes suck. Except for home improvement retailers. Lowe’s would agree. The company just reported third-quarter earnings, much to the delight of Wall Street. As a result of Mother Nature’s very unappreciated wrath, sales at Lowe’s went up 5.7% to $16.8 billion, way more than the predicted 4.6% and $16.6 billion. $200 million of those sales came courtesy of Hurricanes Harvey and Irma that wreaked its proverbial havoc on a large swath of the country. But they helped the home improvement chain take in an $872 million profit that added $1.05 per share, which was three cents higher than analysts’ estimates.  That number was particularly impressive since last year at this time, Lowe’s took in $462 million, nearly half that amount.  But Lowe’s doesn’t owe all its quarterly success to natural disasters. The company also made a big push to cater to professional contractors. And with good reason. They spend more money. Sure DIY home improvement is Lowe’s theme, but the company was savvy enough to recognize an additional opportunity and the fact that the housing market is doing pretty awesome lately only sweetens the pot.  And even though Lowe’s shares dropped a smidge during trading this morning, it can’t be too distraught since the company’s shares are up about 15% for the year.

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Macy’s Mixed Up Day; Uber Pumped for Some IPO Magic; Madoff Victims Rejoice. Well, Maybe Not.

It could have been worse…

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There’s good news. And there’s bad news. Well, for Macy’s anyway. So let’s start with the bad because, why not. The department store chain just released its third-quarter earnings and very unhappily reported that comparable same-store sales fell 3.6%. That’s not even the bad part. What’s worse is that analysts expected those sales to fall, but only by 2.6%. This latest quarter marks Macy’s 12th consecutive quarter of straight declines and these dismal results come smack in the middle of Macy’s turnaround plan called “North Star.” To be fair, however, it was expected that this turnaround plan wasn’t going to change numbers overnight. As for the good news, Macy’s profit rate went up, helped by cost-cutting measures and store closures. That helped the retailer take in $36 million, almost double what it took in last year at this time. Online sales also went up by so much, that it almost took the sting out of the fall in comparable sales. Almost. So naturally, shares went up today, as well. A smidge. But those shares were at the highest point they had been in nine months. Too bad, though, they are still down more than 50% in the last twelve months.

IPWhoa!

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Uber is almost ready to make its big Wall Street debut.  Almost. The company’s new CEO, Dara Khosrowshahi, wants to make that happen by 2019. With a $70 billion valuation, Uber is the most highly-valued private company in the world. According to Khosrowshahi, “We have all of the disadvantages of being a public company, as far as the spotlight on us, without any of the advantages of being a public company.” Even Travis Kalanick, the ousted CEO but current board member, agrees. As for Kalanick, he’s not really gone and you can bet he won’t be forgotten. Not if he can help it anyway. IPO’s weren’t the only thing Khosrowshahi’s been discussing lately. Earlier this week, the CEO unveiled his own “cultural norms” for the company, and one of them goes a little something like this: “We do the right thing. Period.” A far cry from the climate under Kalanick that had a former employee write a scathing blog post detailing allegations of sexual harassment.  Which brings us to the much-discussed Soft Bank deal, where Uber is poised to give a very hefty 20% stake to the Japanese bank. For the right price, of course. Khosrowshahi insists the deal is really, truly going to happen. For real. It. Will. Happen. The primary issue being the price, because isn’t it always?

It’s about time…

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Thousands of victims of Ponzi Schemer Bernie Madoff are set to receive over $770 million in compesation for the money they lost. The $770 million is part of a $4 billion fund set up to compensate victims. And sure, that’s good news. Except for the fact that it took nine years to happen and much of those funds will only cover about 25% of the losses.  But guess what? It still counts as “the largest restoration of forfeited property in history.” Close to 25,000 checks will be mailed to victims, ranging from institutions to individuals in 49 states and 119 countries.  If you recall, Bernie Madoff was accused and found guilty of perpetrating a $65 billion Ponzi scheme. These days, the schemer of the century is chillaxin’ in Club Fed for the next 150 years.

Trump’s Commerce Sec’y Gets Delisted; Valeant Unvaliant with Female Viagra; Rainbows and Unicorns: Oprah’s Effect on Weight Watchers

Oops, I did it again…

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Looks like things are getting awkward for Commerce Secretary Wilbur Ross Jr. Turns out Trump’s buddy has some Russian connections that might just put him in a bit of a pickle. It goes a little something like this: The Commerce Secretary has some investments in a shipping firm he used to run called Navigator Holdings. The problem here is that this particular shipping firm has ties to some people that are subject to U.S. sanctions. One of those ties is none other than Vladimir Putin’s son-in-law.  Mr. Ross knew that he was supposed to unload all kinds of holdings that could potentially be a conflict of interest once he took office. And he did. Mostly. Just not really with this one. To be fair, Mr. Ross has a lot of partnerships and it’s those partnerships that retain a significant stake in Navigator Holdings. But still. It’s a problem, even if there’s nothing necessarily illegal about his ties to this shipping firm since he didn’t disclose those ties in the first place. This new development, along with tons of other juicy information, came courtesy of the leaked documents known as the “Paradise Papers” from the Bermuda-based law firm, Appleby. As for Mr. Ross, that’s not the only reason he’s been making headlines today. Apparently, on those very disclosure forms, where Mr. Ross neglected to mention his dubious Russian ties, he also neglected to mention that he isn’t a billionaire. Not to say that he’s a pauper. Far from it. However, his estimated assets are less than $700 million, not the $2 billion he said he’s worth. Even worse, for Ross’s ego anyway, is that he’s getting dropped from Forbes 400 wealthiest list, because let’s face it, $700 million just doesn’t cut it.

Typical…

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Valeant is the big kahuna making good waves on Wall Street with an earnings beat that sent the stock up 15% today.  Much of that had to do with a 6% increase across its divisions not to mention the boost it got from unloading some of its debt. The company picked up $3.69 per share on a $1.3 billion profit. But that wasn’t the only reason for the boost. Remember Addyi? It’s the drug that was dubbed the “female viagra”  and Valeant bought it from Sprout Pharmaceuticals around two years ago for about $1 billion. Problem is, the deal had been bleeding money since the beginning. Now, two years later, Valeant actually gave Sprout shareholders $25 million just to take the drug back and put it back in business. But that was only after Sprout sued Valeant because it felt the drugmaker wasn’t marketing the drug well. In all fairness to Valeant however, plenty of medical experts just weren’t that into the drug. Because, besides saying that the drug wasn’t that effective, they also felt that potential users wouldn’t be inclined to taking Addyi given that there was a risk of fainting. Yes, fainting. In fact, the fainting would occur following alcohol consumption while taking the drug. I’m pretty sure anyone could see why that would be a problem.

Weight a minute…

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Oprah Winfrey seems to have the Midas touch, at least with Weight Watchers, as the stock rallied today way over 20% to 54.43, its highest price in four years. Revenue numbers were also ridiculously impressive, coming in at almost $324 million, a 15% increase over last year’s revenue during this period. But back to Oprah. The media titan bought a hefty chunk of the company two years ago and will once again grace Weight Watchers ads. Besides the Oprah effect, the weight-loss company put some major thought into both its digital operations and marketing campaign, which apparently paid off given the fact that the company increased its subscribers by 18% to 3.4 million. Here’s the fun part: Analysts thought the company would do pretty good anyway, bringing in 51 cents per share. But Weight Watchers did better than pretty good, adding 67 cents per share on a $45 million profit. That, by the way, was a $10 million increase from last year at this time. Which kind of has me starting to think about all the companies that good use Oprah on their boards. Twitter, maybe?  Oh, and did I mention that Weight Watchers also raised it full year earnings outlook? Indeed it did and now, instead of expecting to earn between $1.57 and $1.67, it now expects to make between $1.77 and $1.83.  And if that’s not impressive enough for you, consider that shares of Weight Watchers are up 360% just for 2017.

 

 

Russia? What About Russia? Facebook Earnings Seem to Be So Much Bigger Than Russia; Major Chink in Under Armour; All Night Long: It’s Party Time at Walmart

It’s good to be Facebook…

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It’s another quarter of rainbows and unicorns for Facebook CEO Mark Zuckerberg. The social media mega-monster blew expectations out of the water with its daily active users growing to almost 1.4 billion, an increase of 50 million users. Revenue increased 47% and came in at over $10 billion. I won’t even bother boring you with what analysts expected. In the meantime, shares picked up an additional $1.59, which was a swift kick in the rear to predictions of $1.28 per share and a majorly impressive 77% increase over last year at this time. Apparently, all this talk about Russia using propaganda on Facebook to influence the presidential election seems to be having a nominal effect on the company.  Amid all this glorious earnings news, Facebook’s general counsel was hanging out in our nation’s capital, taking a beating because some folks in Congress just aren’t down with the way Facebook has this uncanny knack for effectively targeting digital ads to users simply based on their likes. I guess politicians are worried that those targeted ads might be – and have been – too effective in getting their opponents elected.  But Wall Street just laughed away sending shares all the way up to almost $183 per share.

Over Armour?

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Under Armour released its quarterly profits and it seemed like there was carnage all around.  The big bad ugly issue, aside from the actual numbers, is that the company is slashing forecasts for 2017. If that’s not a fiscal kiss of death, I don’t know what is. As for revenue, it fell. A lot. To about $1.4 billion, an almost 5% drop year over year. However, if we’re just looking at what happened just in the U.S., Under Armour revenue fell a whopping 12%. That’s a huge problem because it was the first time that ever happened since the company made its super-hyped Wall Street debut. Of course, you can’t have bad news on Wall Street without shares of the company in question going south. Which is precisely what happened as shares of Under Armour tanked 24% today. Add that to the fact that since September of 2015, shares have fallen around 85%. The carnage, unfortunately, doesn’t end there. Profit was down to just over $54 million and 12 cents per share, which was about half of what it was last year at this time. To add insult to injury, expectations were for $75 million. Of course, some would say those dismal figures are partly the result of the company’s $85 million restructuring charge. But I guess that’s the kind of money you have to spend when you are trying to keep a multi-billion dollar company like Under Armour from hemorrhaging more money. And true to CEO fashion, Under Armour’s own Kevin Plank made sure to blame, among other factors, businesses that went bankrupt since those other businesses, like sporting good stores, sold Under Armour merchandise. The bad news seemed to be contagious as shares of both Nike and Adidas took a nasty dip as well.

Par-tay!!!!!

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Walmart wants to win the holidays. And it’s training hardcore for the finish. Sure, that means sales. And promos. And all the rest of the gimmicks and sales. But Walmart’s also throwing in some partying. I’m totes serious here.  Starting this Saturday, Walmart will hold 20,000 parties in its Super Centers with the first one being called, “Toys that Rock.” Not to be outdone by toys, the retailer will also have parties called “Gifts that Rock” and “Parties that Rock.” Are you sensing a theme here? Of course, no party is complete without a decent goody bag or giveaway, so for you, the shopper, that means a curated gift guide and catalog. See how nicely that works out for Walmart. And you, maybe. Sort of. Walmart is also adding lots more “holiday helpers” to help guide shoppers to cashiers, open more registers and grab things from all over the store…and beyond. And demos, We mustn’t forget the demos. Apparently, there will be 165,000 of them spread all through Walmart’s gazillion stores. Laugh all you want, but Wall Street’s digging Walmart’s latest initiatives and overall drive, sending shares of the company up today by almost 1%.