Trump’s Been Dealing it to Himself; Volkwagen Wants Your Love Back; Excuses, Excuses: Barnes & Nobles Whips One Out

Even more Trump’d up…

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President-elect Donald Trump’s foundation admitted it “self-dealt.” Self-dealing is when  leaders of non-profit organizations take money from the charities they lead, for themselves, their businesses and/or their families. It’s a big no-no and in case you were wondering where and why Donald Trump admitted such things, then look no further than his 2015 IRS tax filings, available on GuideStar, a website that tracks non-profits. But rest assured an investigation has been opened, brought to us by Attorney General Eric Schneiderman, who declined to comment due to the fact that the investigation is ongoing.  And in case you were wondering about this as well, Team Trump thinks Schneiderman’s investigation is politically motivated. In other Trump news, stocks were rallying and the Dow went above 19,000 points. Plenty of people on Wall Street are crediting Trump for all of this fiscally joyful news – whether they voted for him or not. After all, he did promise to slash taxes, ease regulations and go big on infrastructure spending. Experts see these initiatives as excellent means to boost the economy in a ways that have been lacking for years. Unfortunately, not every economic idea coming from Camp Trump is leaving investors and economists all warm and fuzzy. Take for instance NAFTA, which Trump refers to as “the worst trade deal in history.” Major havoc could be wreaked on the economy if Trump decides to scrap it. Millions of Americans rely on free trade with Mexico and slapping tariffs on it could spell fiscal doom.

You’re gonna love me, I just know it…

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Volkswagen, the Wells Fargo of the auto industry,  is betting – and hoping – that it can reclaim its former fahrvergnügen glory and make you love them all over again. Following its epic diesel-emissions scandal, Volkswagen chief Herbert Diess announced he wants to “fundamentally change Volkswagen” by focusing on on major tech advancements, developing battery operated vehicles and adding some some self-driving cars into the mix. Diess has got big eyes on the year 2025, by which time he hopes to sell a million electric cars. He wants to “massively step up” Volkswagen’s car tech and also introduce a greater variety of SUV’s to the North american market because, after all, Americans apparently love their SUV’s. But with those lofty goals comes a plan to eliminate 23,000 jobs in the more traditional areas of the auto-manufacturing industry. Instead, Volkswagen will take on 9,000 new employees to work on tech, while wisely offering those 23,000 employees the option of early retirement over a certain amount of time, perhaps in an attempt to soften the blow. In the meantime, Volkswagen already coughed up a hefty $15 billion settlement with both U.S. regulatory agencies and Volkswagen owners.

Uh, if you say so…

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Barnes & Noble reported yet another dismal quarter of declining revenue, except this time the bookseller is blaming the election for its poor fiscal performance. How convenient. Sales fell 3.2% and probably would have fallen even more were it not for sales of “Harry Potter and the Cursed Child.” Barnes & Noble also reported that their online sales improved 12.5%, however, that figure might be a bit more convincing if it provided an actual dollar amount in its report. Nook devices, digital content and accessories were down close to 20%. But can all of that really be blamed on the election? Hmmm. On the bright side, operating losses for the Nook this quarter were only $8.2 million. Hey, don’t laugh. Last year at this time that figure was $30 million. All in all, Barnes & Noble still has cause to celebrate as it only lost just over $20 million and 29 cents a share when last year it lost $39 million and 52 cents per share. B&N is hoping the holiday season will help its reverse course and give it a fresh dose of fiscal mojo. CEO Leonard Riggio is hoping the company’s new $50 Nook device, debuting on Black Friday, will be a big hit. In the meantime, he’s banking on some concept stores, including one that just opened in Eastchester, New York, boasting a full-service restaurant.

 

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It’s About to Go Down Between Aetna and the Dept. of Justice; Target in Need of Retail Therapy; Barnes and Noble Has a Job Opening. If You Dare.

Put up your dukes…

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And the gloves are off between the Department of Justice and Aetna. Aetna announced it would be reducing its role in the Obamacare exchange, stopping to sell individual insurance, and the Justice Department was apparently warned about such actions last month. You see, because ACA has been costing insurance companies so much money, Aetna wanted to scoop up rival Humana to help absorb costs. But the Justice Department was against the merger over concerns that it would increase prices for consumers and limit competition – your typical antitrust concerns. In a letter to the Justice Department dated July 5, Aetna CEO Mark Bertolini made it abundantly clear that Aetna  would drop out of the Obamacare exchange if the merger did not go his way. It didn’t. And so here we are. Aetna crticics have cried extortion and threats. Aetna , however, calls it a strategic business decision after eating a $200 million loss in its second quarter. Insurers feel that mergers alleviate the enormous costs brought on by Obamacare. They argue that Obamacare has put a major dent in their economics and the government is not holding up its end of the bargain to help mitigate the situation.

Buyer’s remorse…

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Target has missed its target in what the company called a “difficult retail environment.” Well, for Target anyway. The sixth largest retailer cut its full-year fiscal profit after quarterly sales fell more than expected. One of the culprits was a smaller demand for its tech offerings, specifically Apple products. Of course, it’s to be expected that the company is constantly losing ground to Amazon. After all, who isn’t? The company has also been making a push to redo its grocery division by bringing in more organics, gourmet and healthful offerings. That endeavor hasn’t quite hits its stride. And that’s a problem since Target’s grocery division accounts for a fifth of the company’s revenue. Target did turn up a profit of $680 million. Too bad it was a 10% decrease over the same time last year. Sales were down 7.2% to $16.2 billion which was almost on par with estimates. CEO Brian Cornell griped that customer visits went down and now expects a profit range of $4.80 – $5.20, when before it was between $5.20 – $5.40.  It seems his turnaround plan is taking a bit longer to actually um,…turn. In other Target developments, to address its transgender-bathroom policy, the retailer is plunking down $20 million to install single stall bathrooms to its remaining stores that don’t already have them.

Buh-bye…

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Shelve this one under history as Barnes and Noble booted its CEO Ronald D. Boire. The bookseller felt the exec, who had the job for not quite a year, was “not a good fit.” However, to be fair, he did previously fit in at Brookstone, Best Buy, Sony and Sears Canada. Executive chairman  Leonard Riggio will take over until a more permanent replacement can be found and Riggio can finally begin his much-anticipated retirement.  The board said of Boire’s untimely departure that the decision was in “best interest of all parties for him to leave the company.” Ouch. In B&N’s most recent quarter – under Boire – the company took in $876.6 million. Impressive, right? Wrong. B&N took in $910 million the year before. It also lost $30.6 million, far more than the $19.6 million it lost during the same time last year. As efforts to trim costs and turn the company around have yet to yield any meaningful results, shares of the company have also managed to tank to its lowest price in eight months. While B&N has 640 stores dotting the planet, it is still losing ground to that animal we call Amazon. And once again, who isn’t?

 

Divided They Fall at United; Puerto Rico’s Fiscal Plans Fall Short; Barnes & Noble is Singing the Fiscal Blues

Who me?

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Image courtesy of jesadaphorn/FreeDigitalPhotos.net

The airline United is anything but these days as honcho Jeff Smisek ducked out of the company he had been helming, along with two other executives. Apparently, it’s because of a Port Authority investigation that’s in full swing stemming from some events in 2011 that resulted in the “chairman’s flight.” The “chairman” refers to former Port Authority chairman David Samson, who managed to finagle United to offer twice weekly flights from Newark airport to Columbia, South Carolina. While I’m sure Columbia, South Caroline is a fabulous place, that particular flight route was initially deemed unprofitable. So what made the route become profitable all of a sudden? Coincidentally, David Samson’s weekend home is located there and that flight makes for an awfully convenient commute. See where I’m going with this? But the burning question is if those flights were a sort ahem bribe from the airline or a shakedown by Mr. Samson in exchange for some investment cash and other dispensations from the P.A. That all remains to be determined. David Samson already resigned in 2014 after a probe began over intentional lane closings on New York’s George Washington Bridge. Did I mention Samson was a close confidant of Chris Christie. Just saying. Days after stepping down, the Newark-Columbia route was shut down. I guess it wasn’t profitable anymore. As for Smisek, well he still walked away with $5 million and another $3.5 million in stock.

You debt-or believe it…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Puerto Rico thinks they finally have a plan to fix all that fiscally ails them. To address the territory’s $72 billion debt, a panel put out a five year plan to restructure $47 billion of it. With bondholders left to pick up the remainder, Puerto Rico will still be left with a $14 billion financing gap between 2016 – 2020. Lucky bondholders. Debt from the power, water and sewer companies is not included. The plan includes many reforms including a lot of cuts to education and teachers’ pensions. Why education is always the first to get spending cuts is weird since kids aren’t the ones responsible for creating debt. Know what I mean? Also, the plan calls for exploring public/private partnerships for hospitals, highway, building and transit authorities. The plan also wants to explore changes to the tax laws because, after all, why should the United States be the only place that needs to overhaul its tax code? As with any iffy fiscal plan, no timeline has been set which, in my most humble opinion, doesn’t bode well. Even then, the plan still needs approval from legislature and the governor.

What’s in store…

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Image courtesy of adamr/FreeDigitalPhotos.net

Barnes & Noble, though it may be the largest book store chain on the planet, still took a big old $35 million hit on $939 million in sales – worse than the year before when it saw a loss of $28.4 million Hey, the bigger they are the harder their sales fall. But who knows? Maybe with new CEO Ron Boire taking the reigns – as of yesterday – maybe there’s still hope for the embattled bookseller. These new earnings reflect B&N’s spin-off of its college-division, 600 stores and the Nook, B&N’s shaky attempt at putting its electronic stamp on the e-reader industry. The bookseller just can’t seem to make strides against Amazon. Well, to be fair, most companies find Amazon to pose quite the challenge. In any case, B&N lost 68 cents a share when last year at this time it only lost 56 cents a share.  $17 million of B&N’s loss was from the Nook and this was B&N’s fifth straight quarter of losses, sending shares down today over 16% at one point today.  But B&N has a plan, so they say for a new store prototype. Those stores will be considerably smaller and carry a larger assortment of merchandise, including toys and games, which incidentally saw a 17.5% increase for the chain.

Uber Revs Up for a Big U.N. Campaign; Credit Suisse Says Auf Wiedersehen to CEO; Barnes and Noble Books Not Terrible Earnings

Put the pedal to the metal…

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Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Über is stepping on the p.r. gas and teaming up with U.N. Women for a big campaign. There is probably a joke in there somewhere about irony but I’ll let you come up with it. In honor of the twenty year anniversary of the Beijing Declaration – a provision promising global gender equality – Über wants to help foster and facilitate economic growth for women through the “Step It Up For Gender Equality” program. The idea is to employ 1 million women as Über drivers by 2020. But here’s the tricky part: Both Über and U.N. Women need to be present in a region. U.N. Women is only present in 48 countries while Über is allowed to operate in 55 countries, and the two don’t always coincide. Sadly, Über is more globally successful than gender equality. But that’s for another blog. Of course, it’s also hard to ignore all the scandals and issues Über has been having with not just female passengers who have been victims of violent drivers, but female drivers who have been harassed by passengers, as well. Currently, 14% of Über’s 160,000 drivers are women. This latest initiative, though no doubt noble and sincere, tends to also suggest that Über’s got some major fiscal growth plans up its tailpipe – continuing to intrigue investors who can’t seem to stop throwing billions of dollars Über’s way.

Nein…

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Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Credit Suisse CEO Brady Dougan has announced he will be leaving the Swiss bank in June and giving the position over to Prudential’s Tidjane Thiam. Dougan, who had been at the post since 2007, said the decision to leave was mutual. Of course it was. For a while investors had wanted Dougan to cut back on the investment arm, but the CEO resisted. His resistance did not pay off. Combine that with the $2.5 billion Credit Suisse had to pay U.S.authorities for helping its clients evade taxes and, well, here we are today, discussing Dougan’s resignation. As the first American selected to be CEO of Credit Suisse, the Swiss media just wasn’t that into him from the start. His loyalty was questioned and he took heat for his pay packages. Also, Dougan doesn’t speak German, which apparently didn’t sit well the Swiss media either (and presumably, many many others). News of the impending change sent the stock climbing.

 Book it….

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Image courtesy of adamr/FreeDigitalPhotos.net

Barnes & Noble’s quarterly results are in and the word is that revenue is down 1.7%  to $1.96 billion. This ought to surprise no one. And if it does surprise you then I have one word for you: Nook. The e-reader has been nothing but a giant money pit for the bookseller even with Samsung trying to come to its rescue by putting out the first new tablet for Nook in two years. What ought to surprise everyone is that B&N didn’t do nearly as bad as many thought it would all because of books. And toys. But definitely books. Actual books printed on (hopefully) recycled paper. I kid you not. It helped B&N rake in 93 cents per share in profits and helped store sales increase by 1.7%. Sure it wasn’t the forecasted $1.23 per share, but hey, Barnes & Noble will take it. Also, college books proved to be a big help in the fight against horribly missed earnings, with revenue coming in 7.2% higher. Barnes & Noble has plans to spin spin off its college books division in the summer. And now, instead of closing 20 stores this year, Barnes & Noble only plans to close 13 stores.

Keurig Issues a Very Un-Merry Recall; Walgreens’ Happy Fiscal New Year; Barnes & Noble Regifts Itself, Sort of, With Nook Buyback

Ahhhh Keurig!!!

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Image courtesy of lamnee/FreeDigitalPhotos.net

Looks like the automotive industry doesn’t have the monopoly on recalls this year, after all. Enter Keurig, beloved brewer of coffee and other hot beverages for millions. Following over 90 reports of people literally getting burned by their machines, Keurig recalled 7.2 million Keurig Mini Plus machines because they can overheat (imagine that) and spray hot liquid on its discerning coffee drinkers. Oh the horror. Not sure if your precious Keurig is on the recall list? Well, there are an estimated 6.6 million brewers that were recalled in the United States, with the rest purchased in Canada. The machines were made between December 2009 and July 2014 and were likely purchased at Kmart, Kohl’s Target, or directly from the Green Mountain website. In any case, rest assured that Keurig will ship you a repair kit FOR FREE. Of course, can you guess what the company stock did today? Yes it took a bit of a pre-Christmas nosedive and that’s in addition to the 5% drop in sales the company saw in its fourth quarter.

Out with the WAG, in with the WBA…

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Image courtesy of jscreationzs/FreeDigitalPhotos.net

Nothing says jolly like beating analysts’ estimates and Walgreens did just that. The health retail giant pulled in some impressive numbers for its fiscal first quarter with earnings of $809 million and $.085 per share. Analysts forecasted a paltry $0.74 per share. Analysts also called for revenues of $19.43 billion. But Walgreens instead pulled in close to $19.6 billion in revenues. In fact, shares of the company have pleasantly creeped up 29% in the past year. And while we bid farewell to 2014, it’s also time to bid farewell to retiring Walgreens CEO Greg Wasson. Wasson, who will not soon be forgotten – whether some people like it or not – orchestrated plans to takeover Swiss health and beauty company Alliance Boots. Part of the original plan was to pull off an inversion-type deal which did not exactly pan out. But what did pan out was Walgreens’ long-awaited foothold onto the international pharmaceutical/health/beauty market by just taking over the Swiss company. So bienvenu Walgreens. Or whatever it is they say there. With this new deal we shall also bid farewell to Walgreens presence on the New York Stock Exchange and Nasdaq under the ticker symbol WAG. Assuming the deal with Alliance Boots finalizes by December 31, Walgreens will now be traded only on Nasdaq, under the ticker symbol WBA, as part of the Walgreens Boots Alliance, Inc holding company. Sniff, sniff. As for the company’s 8,200 plus stores, expect to see some changes as the company looks to cut costs and trick out appearances.

Nook’d out…

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Image courtesy of adamr/FreeDigitalPhotos.net

It’s official. The Nook e-reader business is once again fully back in the arms of Barnes & Nobles. But don’t expect the reunion to last too long as Barnes & Nobles plans to spin it off on its own by August. The Nook, which turned out to be a big money loser and just couldn’t compete with Amazon and friends (and enemies), cost Microsoft $300 million back in 2012. Barnes & Noble graciously agreed at the beginning of the month to buy back the biz from the software giant for $125 million with Pearson Inc. still holding a stake in the company. But no more as Barnes & Noble paid $27.7 million in cash to the educational book publisher with $13.8 million in actual cash and 603,ooo shares of stock.  Wall Street liked the move as well and shares of the bookseller moved up a smidge.

Labor Pains and Gains; Microsoft is Nook’d Out; Merry Mortgage Rates

We can work it out…

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Image courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

Thanksgiving might be over, but there is yet more for which to be thankful: The number of people filing for unemployment benefits dropped once again to under 300,000. The week prior,  the Labor Department reported, much to our collective chagrin, that 314,000 people applied for jobless claims. So you see now, employers really are graciously hanging onto their workforce and the job market is not “cooling” as last week’s numbers rudely suggested. But time for the downer: 2.36 million people are getting jobless benefits. However, unemployment is expected to stay at its annoying 5.8% perch – which is not totally awful since its the lowest since July of 2008.  In fact, the 4 week average for claims being filed even plunked down 9% during the year. If that doesn’t make you merry, well then, that’s your problem. Then there’s that cheery little fact that 229,000 jobs were added, on average, per month over the last year. Still not jumping out of your seat? Well you should because last year that number was a ghastly 194,000. ADP even graciously reported that 208,000 jobs were added just this past November.

Thanks for the virtual memories…

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Image courtesy of cuteimage/FreeDigitalPhotos.net

Barnes & Noble and Microsoft can officially change their Facebook status to “no longer in a relationship” ending a two and a half year partnership that saw mostly loss. Microsoft initially plunked $300 million into the relationship involving the once highly-touted Nook, and oh the hopes – such high hopes that with Microsoft’s tech prowess, the Nook would emerge as a formidable force in the tablet wars. But it was not to be as Microsoft did not do what others had hoped for and even went on to introduce its own tablet – The Surface. Combined with the sensation we call the “iPad” and, of course,  the Kindle Fire, the forlorn Nook was left in the digital dust.  This quarter saw revenues drop to $64 million, a staggering 41% decrease over last year, with sales down 60% for the year. Now it is up to Samsung, to help repair those shattered hopes and dreams for Barnes & Noble, as the bookseller writes out a $62 million check to buy back its stake from Microsoft.

Rated: Awesome

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

If you’re thinking now would be a good time to buy a new house, my virtual friend, you just might be right as 15 and 30 year mortgage rates have fallen yet again. In fact,  those rates are at their lowest in a year and a half. This week you could get yourself a sweet deal on a 30 year at a rate of 3.89%. Last week that rate was hovering at 3.97%.  Looking to score a 15 year? How does 3.1% sound? I’ll tell you how it sounds – better than last week’s 3.17%. These rates, by the way, are coming just in time as home values are creeping up on us. October saw a 6% rise in values. Good news for sellers, anyways. Not so much for buyers.

Zynga Zinger, Supreme Cyber Smackdown and Fannie Mae is Back on Top

Game over?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Zynga took a nasty little hit to its second quarter earnings by barely breaking even. And that’s being generous. While Wall Street was hoping to see revenue of $157 million, the San Francisco-based gaming company, currently notable for “Farmville,” took in $153 million in revenue with a $.07 per share loss. Ah! But what is a mere $.07 in the grand scheme of things, you might be wondering? Well that grand scheme adds up to a $62.5 million loss. Last year at this time the company’s loss was but a mere $15.8 million. However, there is hope on the mobile horizon, or so Zynga feels, as “Farmville 2: Country Escape” has become an Editor’s Choice in the Apple App store – a very significant barometer of what makes a game successful. Then there are those handy licensing deals with the NFL and Tiger Woods, among others, that Zynga is counting on to turn those earnings in the up direction.

E-commerce competition!

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Image courtesy of cooldesign/FreeDigitalPhotos.net

It’s about to get a whole lot nastier – but luckily, not for consumers – in cyberspace thanks to the nifty new alliance that was forged between Barnes & Noble and Google. Yes. I did write Google – well Google Shopping Express, to be more precise. The two companies have teamed up to provide a little competition to Amazon. But that’s not in the official statement, of course. The partnership, which should give a much needed boost to the bookseller, will provide same-day delivery in certain areas, just like rival Amazon. After all the trouble Amazon caused for book publisher Hachette, this new deal probably couldn’t have come at a better time as consumers are feeling a little less affectionate towards the e-commerce giant. Google Shopping Express has already teamed up with major retailers like Target and Costco. By the way, you can subscribe to Google Shopping Express free for the first six months, with a subscription fee to be determined at the end of that time. Or you could just plunk down $4.99 per order. Happy shopping!

Pay it backwards…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Fannie Mae, who once upon a time had to hit up taxpayers to the tune of $116 billion at the height of the financial crisis is about to have paid us all back in full. Sort of. The mortgage lending company just reported its tenth straight profitable quarter – $3.7 billion in profits, in fact.  And a check for that amount is in the mail…to the US Treasury. After the Treasury cashes that out, Fannie Mae can take a breather as it will have more than fully repaid its debt. And while that $3.7 billion profit might seem impressive, that figure is actually a 63% decrease over the same period last year, where Fannie Mae pulled in over $10 billion in profit.  Incidentally, Fannie Mae earned $84 billion in 2013. Not bad for a year’s work, huh?