Nothing to Chirp About at Twitter; Lumber Liquidators Earnings Nearly Hit the Floor; Ben Bernanke’s Impressive Resume

Chirp…

Image courtesy of Mr-Vector7/FreeDigitalPhotos.net

Image courtesy of Mr-Vector7/FreeDigitalPhotos.net

What’s worse? Having your earnings leaked prematurely or the fact that those earnings were so bad? Hmmm. This one’s a toss up. Either way, Twitter’s bummed on all ends. Earnings reports are released only after the closing bell or right before the opening bell giving traders/investors/wannabes a chance to study the numbers and figure out how to proceed. Twitter’s “inadvertently” pre-maturely released earnings, which occurred on its very own platform, sent the stock south 20% and even caused trading of the stock to be suspended for a period. But that was only Twitter’s second worst day ever.  As for the horrible numbers, sales are actually up 74% over the previous year but the problem – and it’s a big one – is that Twitter’s growth rate is not up. User growth grew 18% to 302 million active users. But last month it grew 20%. Those figures are only supposed to go up. Never down. And herein lies one of social media company’s many many problems. Another is that CEO Dick Costolo’s credibility has come under fire and here’s why: It seems he didn’t see the writing on the wall, namely that all signs were pointing to a major slowdown.

Floor-ed…

Image courtesy of Serge Bertasius Photography/FreeDigitalPotos.net

Image courtesy of Serge Bertasius Photography/FreeDigitalPotos.net

Things at Lumber Liquidators keep getting worse as the company reported its first quarter earnings and to the surprise of no one, the company took a loss of $7.9 million and 29 cents per share on $260 million in revenue. I have to wonder if analysts didn’t hear about the scathing “60 Minutes” report that accused the company of selling formaldehyde-laced flooring because they expected the company to at least gain 15 cents a share. To give you an idea of just how bad those earnings really are, last year at this time the company took in a profit of $13.7 million and 49 cents a share. In case you were wondering how the company even made any money this quarter, most of it comes from January and February, before the damning piece even ran on March 1. Much of those losses are because of all those legal and professional fees the company has been shelling out to defend itself. But it’s safe to assume that people also are probably not buying from a company that would allow toxins to make their way into the company’s products. And the trouble just keeps coming. Lumber Liquidators says it is aware of the over 100 pending class action lawsuits against it. Even the Department of Justice has entered the fray seeking criminal charges against the company under the Lacey Act. Oh and one more thing, its CFO, Daniel Terrell, needs to brush up his resume as he’s leaving the company.

Ben…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Ben Bernanke’s LinkedIn profile seems to be filling up nicely. First he took a position as a distinguished fellow in residence at the Brookings Institution. Then he picked up a consulting gig at hedge fund, Citadel. Now, the former Federal Reserve Chairman has some new West Coast digs, thanks to PIMCO, who just announced that Mr. Bernanke would be joining its ranks as a senior adviser. PIMCO could definitely use Mr. Bernanke’s guidance right about now as investors have pulled about $100 billion from the fund following the departures of Co-Chief-Investment Officers, Bill Gross and Mohamed El-Erians last year. The former fed chairman will still have plenty of cash to play with as PIMCO handles about $1.59 trillion and runs the world’s biggest mutual fund. He’ll even get to “engage” with clients, which should help win back some of that $100 billion and assuage the fears of those finicky investors.

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Home Sweet Amazon-Serviced Home; Ben Bernanke Joins the Blogosphere; AG Settles Score With GNC

Is there anything it won’t sell?

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Amazon has come out with yet another way to take your money. This time it’s through its new Amazon Home Services with over 700 home improvement service providers services at your fingertip, with verified reviews for added peace of mind. Plumbing problems? Too tired to assemble that new gym equipment? Don’t feel like vacuuming? No problem. Just log on and Amazon will make sure it all gets taken care of. Services are paid for via your Amazon account only after the project is completed. So why is Amazon’s home service offerings different from all others, like Angie’s List, Yelp etc.?  Perhaps it the comprehensive vetting process it conducts, including making sure service professionals are licensed, insured and have had their backgrounds thoroughly checked. But Amazon also offers a money-back guarantee charmingly called a “happiness guarantee.” Apparently, consumers also trust Amazon, giving an added incentive to use the ever-powerful e-commerce giant. To be fair, however, I too, once trusted Amazon. But then last month one of its vendors sent me a completely different set of fairy wings than the ones I ordered. Just sayin’.

Payback…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The blogosphere just got a bit more crowded now that Former Federal Reserve Chairman Ben Bernanke joined the mix with his own blog for the Brookings Institute. He is, after all, its latest Distinguished Fellow in Residence of the Economic Studies Program. It’s very pish posh, indeed. The position, I mean. Not the blog. “Now that I’m a civilian again, I can once more comment on economic and financial issues without my words being put under the microscope by Fed watchers.” Which means he doesn’t have to be polite anymore and gets to say whatever he wants. For instance, Mr. Bernanke can use his blog for, among other purposes, striking back at the many critics he’s had over the years who took issue with his policies. Janet Yellen, who took over for him last year, does not get to have that kind of fun. At least for now. In today’s post, Mr. Bernanke graciously explains the reasons behind the low interest rates. By the way, he’d like you to know that it’s not necessarily because the Fed is keeping it that way – though there is some truth to that.

Whaddya mean there’s no ginseng in there? 

Image courtesy of Getideaka/FreeDigitalPhotos.net

Image courtesy of Getideaka/FreeDigitalPhotos.net

This time it is not a bank that has reached a deal with New York Attorney General Eric Schneiderman. GNC Holdings Inc. begrudgingly settled a lawsuit over its Herbal Plus products found at GNC, of course, but also at Target, Walmart and Walgreens. Apparently, it wasn’t at all clear that the ingredients listed on the outside of the bottles of the dietary supplements were actually present on the inside. Who would have thunk it? The presence of things like echinacea, ginkgo biloba, ginseng and St. John’s wort couldn’t be verified when the AG used DNA barcoding methods to test for them. That’s kind of a huge embarrassing problem in the $33 billion a year dietary supplement industry. Of course, GNC disagrees vehemently with the AG’s testing methods saying the “lawsuits are without merit.”  GNC, however, used its own internal test methods, in addition to third party independent test methods which, naturally yielded different results. Despite all that, the supplement company will now be using bar-coding methods –  just like the AG’s office –  beginning in the next 18 months, so that consumers will know for sure if there really is echinacea in that bottle they’re holding, conveniently labeled “echinacea.”

 

 

Tiffany: Bling It On, Janet Yellen Graduates and Missed Target

Shine on…

Image courtesy of Boykung/FreeDigitalPhotos.net

Image courtesy of Boykung/FreeDigitalPhotos.net

Tiffany & Co. (TIF)  and its iconic little blue box had a very luxurious quarter. They just might be the only company who didn’t take issue with the particularly infuriating winter. Even if that nasty little season did toy a bit with the company’s northeast stores nobody probably wants to hear about it considering its net income rose about 50%. In fact, not only did it beat the Street’s expectations, it shattered them. Analysts thought the ultra luxury retailer would pull in about $953 million dollars. But oh no. They came in at a whopping $1 billion. Ironically, a much of that success stems from the less-expensive collections. Yes. Tiffany & Co. does believe itself to have a less expensive collection. Now please collect yourself. But to be fair, consumers were also taking a shine to their colored diamonds as well. And well who doesn’t like a diamond no matter what the color?

 Class act…

Image courtesy of hywards/FreeDigitalPhotos.net

Image courtesy of hywards/FreeDigitalPhotos.net

Federal Reserve Chairwoman Janet Yellen received her degree. Okay so it was an honorary one from NYU. But it will look awfully pretty next to the one she received from Yale where she earned her PhD in economics many years ago. Before a crowd of graduates and their kvelling families gathered in Yankee Stadium, she delivered an address to the class of 2014 in which she said ability is good but it’s how much grit you have that will ultimately determine your success. “You wont succeed all the time. I hope you can find joy in the lives you choose.” Words of a wisdom from a genuinely wise woman. She also gave props to her predecessor, Ben Bernanke. The first female to head the Federal reserve, she was joined by fellow honorees Supreme Court Justice Elena Kagan, Yankees pitching great Mariano Rivera and legendary singer Aretha Franklin.

Missing the mark…

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Target can’t seem to shake that pesky mark on its back after coming out with earnings that tanked 16%. Of course that massive fiasco of a data breach that cost the company $26 million is still looming large and certainly contributed to its disappointing – though not unexpected – performance. But then there was Canada! Oh Canada. The foray to our friendly neighbors to the north didn’t work out quite the way Target hoped. Those embarrasing inventory shortages were not exactly the stuff successful expansions are made of and so the president of its Canadian operations was shown the door.

 

Wall Street: Ugh! Rate Hikes, Reading Oprah Tea Leaves and Doggone Expensive

Not in our best interest?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Anxiously gnawing on its finely manicured fingernails, Wall Street not very patiently waited to see just how close newly appointed Fed chairwoman Janet Yellen would stick to the policies of her predecessor and mentor Ben Bernanke. Much to the chagrin of Wall Street, her remarks hinted at the possibility that she plans to raise interest rates sooner than expected. If you think you’re the only one who doesn’t appreciate this news, you’re not alone. Wall Street didn’t like the news either and let Ms. Yellen know it by taking a tumble. So there!

Ugh! Is there anything she can’t do?

Image courtesy of Suat Eman/FreeDigitalPhotos.net

Image courtesy of Suat Eman/FreeDigitalPhotos.net

Reigning queen of media Oprah Winfrey has a new gig. She might not be the new barista at your local Starbucks but you sure can expect her presence behind the counter. At their annual shareholders meeting, Starbucks CEO Howard Schultz sat with the iconic talk show host sipping tea as they unveiled Teavana Oprah Chai tea. Tea is a $90 billion market. For every Oprah Winfrey tea product, sold a donation will be made to the youth education charities. That can turn into a very large sum very quickly as tea is only second to water in terms of consumption. Winfrey said,”Starbucks is about nurturing the human spirit.” You can pay for that nurturing via the handy dandy Starbucks app (and tip your barista too).

You paid how much for that doggie in the window?!

Image courtesy of Grant Cochrane/FreeDigitalPhotos.net

Image courtesy of Grant Cochrane/FreeDigitalPhotos.net

Look out Westminster Kennel Club, there’s a new mastiff in town, but not just any mastiff. A Tibetan Mastiff  just sold in China for close to $2 million. The breeder said the dog has lion’s blood. Whether or not that’s even remotely possible, the 200 pound long haired canine will now become the companion to an obviously very successful property developer. Tibetan mastiffs are considered a status symbol among China’s elite and are apparently compared to their “nationally treasured pandas.” Except, I’m guessing Tibetan mastiffs prefer steak to bamboo. Well for that price, I hope the dog is house-trained.