The Mouse is Going After the Fox; Dollar Wise for Fast Food; A Wrinkle in Allergan’s Plan

Fox-y mouse…

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Today’s juicy merger gossip is brought to you by Fox and Disney. Apparently, a deal is thisclose that will have Disney scooping up Fox’s studio and television production assets. The deal, which is rumored to be worth about $60 billion, will also include the acquisition of Fox’s stakes in Hulu and Sky. As for its news and sports division, Disney is taking a pass on those entities. But Disney isn’t the only one with its sights set on Fox. Comcast and Verizon are also trying to get in in some Fox action. It’s just that right now Disney seems to be getting the best crack at the media conglomerate. Wall Street seems to like the news considering it sent shares of Fox up over 3%. But the question you might be wondering about is why Disney even needs  $60 billion worth of Fox’s assets? Doesn’t it have more than enough of its own? Well,  yes, it does. However, in case you missed it, the entertainment industry is changing, with a big push towards streaming and direct to consumer models and believe it or not, picking up those particular assets over at Fox will give Disney a much much bigger global reach. And who couldn’t use some more global reach, right?

Bucking the trend…

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Fast food restaurants are engaged in a bloody dollar war. But that just means good news for consumers. McDonald’s is bringing back its dollar menu, which it ditched just four years ago because it didn’t pull down the kind of cash McDonald’s wanted to see. As for the term “dollar,” well that might be a bit generous in its definition. To be clear, the fast-food chain is offering the $1-$2-$3 Dollar Menu. If you’re in the mood for a sausage burrito, cheeseburger or any-size soft drink, well then, feel free to fish out that dollar bill that’s burning a hole in your wallet. Otherwise, prepare to shell out more. Not to be left out of the fast food fiscal fun, Burger King and Wendy’s are also trying to woo you with their version of “value” menus. But it’s Taco Bell that’s really taking aim at the Golden Arches with 20 items listed for just a dollar.  For McDonald’s, the cheapy menu is its answer to win back customers. The company apparently lost out on some “500 million transactions” because it didn’t have a value menu. Ironically, or not, Taco Bell’s dollar menu actually generated $500 million in sales. To make up for the lack of profitability that comes with McDonald’s having a value menu, the chain is expanding its “Signature Crafted Recipes” – which is really just code for more expensive menu items that will offset the value items.

A wrinkle in time…

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There’s a new Botox sheriff in town and Allergan doesn’t like it. Not one bit. Enter Revance Therapeutics Inc., a small biotech company that holds the formula for RT002, aka “the better, longer-lasting botox.” If it’s approved people can start sticking their faces with the stuff as early as 2020. Which is great news for everyone. Well, everyone except for Allergan, the pharmaceutical giant behind Botox, the original, whose stock fell over 4% on the news today. In fact, today Allergan hit its lowest price since 2013, after losing a third of its value in the last five months. And, while RT002 uses the same main ingredient for wrinkle reduction as Botox does, that being botulinum toxin Type A, it also uses the company’s proprietary peptide technology, which is apparently the reason why this particular formula lasts about a month longer than Botox.  In any event, Allergan wasn’t especially impressed by Revance’s new data released today and called it “underwhelming.” As for Allergan’s response, you could probably just call it sour grapes.

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To Hike or Not to Hike: That is the Fiscal Question; Doggone it, Home of the Whopper Gets Frank; Is Lumber Liquidators Finally in the Clear?

 

1,2,3 – Hike!

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The Fed will most likely not be lowering rates so don’t hold your breath. Not that you were planning on it. But the Fed is likely to do one of two things: raise rates according to its plan of “gradual adjustments” – meaning regularly raising those rates a smidgeon.  Or the Fed will choose to do nothing. Zero. Zilch. Nada. You might have thought that China is messing up our economy in unimaginable financial ways and therefore a rate reduction is justified. However, the Fed doesn’t feel that China is messing it up enough to warrant lowering rates. In fact, Janet Yellen and company also don’t feel that the rest of the world’s economic troubles are affecting the U.S. so much either. Instead, Yellen feels the U.S. economy will grow no matter what, oil gluts, falling global stocks, and all. None of it is our problem and we shouldn’t waste time worrying how it will all affect the U.S. economy. What is our problem is that the Dow fell 1,700 points since the Fed announced its first rate hike back in December. Even so, Ms. Yellen sees employment gains and wage growth, despite financial tightening conditions, and said that the U.S. financial sector has been resilient.” Be on the lookout for a potential rate hike (or not) next month when the Fed holds its next meeting March 15-16.

Hot diggety dog…

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It might be the home of the Whopper but Burger King’s new menu offering is taking on a whole different shape. Starting on February 23, Burger King will be serving up hot dogs at all of its 7,100 + locations in the U.S. Burger King brass are calling it “the most obvious product launch ever” and feel that hot dogs are a natural fit with the chain. Besides, the dogs were already tested in five markets bringing in sales increases that also apparently proved a natural fit for the company. It will make Burger King the biggest hot dog seller in the country and bonus: There will be no boiling or rolling involved in crafting these fine specimens. Instead, the dogs will be flame broiled and come in two variations: the $1.99 “classic” version and the $2.39 “chili cheese” version.  Burger King is partnering with Oscar Mayer to make a proprietary 100% beef delicacy. But the best part – to me anyway – Snoop Dogg and Charro (not sure how they came up with that combo) will be starring in training videos, hoping to make it more exciting for employees. Hey, whatever works.

Hold your breath…

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Lumber Liquidators Holdings Inc. is almost out of the fiscal woods. Sort of. After testing conducted by the U.S. Consumer Product Safety Commission, the results are in and Lumber Liquidators’ suspect flooring has a very low risk of causing cancer. Phew. What is more likely to result from the toxic floor coverings are breathing problems and other irritations – besides the emotional irritations brought on by purchasing flooring that contains formaldehyde. Lumber Liquidators has already paid up $13.2 million in fines and forfeitures for its formaldehyde-laced floors produced in China between 2012 and 2014. If you recall, it was just almost a year ago when “60 Minutes” ran a very (financially) damaging piece exposing the company. But now, with any good news on Wall Street, shares have been rising steadily today, hovering at about 12.63. Its 52 week low was 10.53.

OMG-D-P!!!!; No Bling In Tiffany & Co. Earnings; McDiss Day

G.D.P-habulous…

Image courtesy of cooldesign/FreeDigitalPhotos.net

Image courtesy of cooldesign/FreeDigitalPhotos.net

China might be hogging center stage for its economic slowdown but the U.S. is stealing the spotlight now for the exact opposite reason. The exciting news off Wall Street today (okay, exciting is a stretch) is that the U.S. economy grew by a whopping (not a stretch) 3.7% instead of the initially estimated 2.3% growth rate. So let’s give a big shout out to the GDP for not repeating that awful first quarter growth rate of .6% which had everybody reeling and blaming a brutal winter and a slowdown at west coast ports. Business investments also saw a 4% increase even as low oil prices and a strong dollar continue to toy with our fiscal emotions. Shares went up across the indexes and the Dow Jones isn’t looking so scary right now, having gone up 1.4%. Consumer and government spending are up too. As if government spending ever goes down? So does this mean the Fed might once again forge ahead with its unwelcome plans to raise rates? Doubtful, for September anyway. But brace yourself because that hike is on the horizon.

You can forget breakfast…

Image courtesy of MR LIGHTMAN/FreeDigitalPhotos.net

Image courtesy of MR LIGHTMAN/FreeDigitalPhotos.net

Tiffany may have some sweet bling to offer but its earnings were anything but. The luxury goods retailer saw a 15.4% decrease in profits to $105 million, raking in 86 cents per share, a nickel short of estimates. So what gives? A strong dollar has got tourists shying away from Tiffany & Co. since they wouldn’t have been getting enough bang for their good old American bucks. However, Tiffany also saw a 21% increase in sales from Japan. The jeweler is also betting big on China, despite that fact that everyone else seems freaked about by the country’s slowing economy. Sales there are up. So clearly more than a few folks in China are plunking down lots of cash for some fancy Tiffany merchandise. Which makes perfect sense since China is the number two luxury market in the world. In fact, Tiffany is going ahead with plans to open two more stores there, adding to the thirty others already in the country and its 304 total stores. But shares of Tiffany are down 20% for the year and are currently hovering at an 18 month low. Interestingly enough (at least I thought so), less prestigious bling company Signet Jewelers Ltd., parent to both Kay and Jared Jewelers, saw some especially good earnings. Signet beat estimates of $1.15 per share to come in at $1.28 per share. Does this mean a shift in consumer preferences? Hmmm.

Off with their chicken supply…

Image courtesy of  joephotostudio/FreeDigitalPhotos.net

Image courtesy of joephotostudio/FreeDigitalPhotos.net

McDonald’s has cut ties with one of its chicken suppliers after some video was obtained from a Tennessee farm that supplies to Tyson, which in turn, supplies to McDonald’s. Unfortunately, these chicken farmers were allegedly using inhumane tactics on their farm – a big no-no if you wanna be in good with the Golden Arches. And while it was the right and noble thing to do to terminate their contact, McDonald’s still has not exactly landed in the good graces of Americans today. However, it has nothing to do with chicken. Only beef. As in a beef with Burger King. Perhaps you may have heard that today is National Burger Day. In a two page ad taken out in the New York Times and Chicago Tribune, Burger King wanted to join forces with McDonald’s on this auspicious day, put aside its McDiffferences, and offer up a McWhopper. Instead of graciously accepting this show of good beef, McDonald’s very undiplomatically declined the opportunity with CEO Steve Easterbrook writing, “We commit to raise awareness worldwide, perhaps you’ll join us in a meaningful global effort?” Can you say McOuch?

McDonald’s It Ain’t as Burger King Posts Whopper Earnings; Chipotle Crosses GMO Off Its Menus; WalletHub Gives You the Lowdown on Where to Start a Biz

Royal earnings…

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Image courtesy of joephotostudio/FreeDigitalPhotos.net

Looks like the Burger King-Tim Hortons merger paid off as the newly formed company, Restaurant Brand International Inc., the world’s third largest fast-food company, posted some very impressive earnings. Those earnings had a little help from some of those tasty chicken fries and the ever-popular Spicy BLT Whopper Sandwich. Pulling down $932 million in revenue and taking in 18 cents a share, the company beat analysts’ estimates by 3 cents. In fact, the home of the Whopper had its best quarter for growth in almost ten years, unlike fast-food chain rival, McDonald’s who can’t seem to do anything right these days to get its earnings on the uptown train. Burger King has 14,300 restaurants with about half just in North America. Sales at Burger King picked up 9.6% while Tim Hortons saw an 8.1% rise. The company is even giving out a 10 cent per share dividend. And who doesn’t like a dividend?  These earnings might not be sitting too well with the Department of the Treasury who is downright aghast at companies merging for tax inversion purposes. In case you don’t recall, that’s when U.S. companies merge with foreign companies in an effort to pay a reduced tax rate in the U.S. The Department of the Treasury has since been doing its super, very best to make those tax inversion mergers that much more difficult to complete.

I got 99 problem but GMO’s ain’t one…

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Image courtesy of rajcreationzs/FreeDigitalPhotos.net

In case you get a yen for some GMO – as in, genetically modified  – nourishment, you needn’t bother getting your fix on at Chipotle. They’ve dropped that ingredient from its cuisine. At least in the United States. It seems like only yesterday that Chipotle was serving up genetically modified soybean oil and corn. Actually it was yesterday and those ingredients were actually found in a number of items at the eatery including its tortilla chips and taco shells. Perhaps you recall two years ago when Chipotle brought the issue of GMO’s to our attention and graciously began listing the offending items on its menu that contained such ingredients. Chipotle became the first restaurant to do such a thing and, in its own special way, passively-aggressively began menu-shaming other fast-food establishments who didn’t own up to their genetically-modified flawed menus. However the scientific community has yet to jump on the anti-GMO bandwagon, or even find anything alarming or problematic with using GMO’s. Even though Chipotle recently missed earnings estimates, with some of that owing to a pork shortage for its beloved carnitas, the stock seems to be holding steady at around $640 per share.

Location location location…

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Image courtesy of jennythip/FreeDigitalPhotos.net

If you like the idea of being your own boss, the question of where to set up shop might just be the most important decision you make in starting your own business. Good thing the fine folks over at WalletHub already did the research for you so you can focus on the fun stuff, like zoning permits and plumbing problems. Using a bunch of useful criteria, from space affordability to how educated a locale’s labor force is, WalletHub compiled a list of “2015’s Best Cities to Start a Business.” Of the 150 cities listed, some of the more notable gems from the study found that the South is where it’s at with Shreveport, Louisiana taking the top spot. In fact Southern cities dominate most of the top ten spots. Figures as they know a thing or two about hospitality. Thinking of starting your own business in California? Well, don’t. Several cities in the Golden State fall at the wrong end of the list. As for the 150th best city to start your business? That distinguished honor belongs to Newark, New Jersey.

Gravity Payments Sets a Happy Standard for Minimum Wage; It’s Equal Pay Day – So Help Do Something About It!; Why Tax Day Doesn’t Have to be Taxing

To whom should I submit my resume?

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Image courtesy of iosphere/FreeDigitalPhotos.net

It’s a good day to be a minimum wage worker at Gravity Payments. The CEO and founder of the Seattle-based credit card payment processing company, Dan Price is generously – very generously – going to be giving most of his staff of 120 really big raises. I mean REALLY BIG. Mr. Price decided all this after he read an article about a study detailing how income affects happiness. The magical number, or rather salary, at which people’s happiness takes hold is a little more than $70,000. So Gravity Payments decided to set its minimum wage at $70,000 a year. The average salary there was (as of Friday, anyway) $48,000 a year, with minimum wage employees already earning more than the federal minimum wage. But now more than 30 people will now get at least double what they are already making. Mr. Price will pay for all these new raises by reducing his salary by $1 million and also using a big chunk of the company’s $2.2 million profit.  Mr. Price does’t see this as a loss, or even as charity. Instead, the prescient CEO sees it as an investment, as happy employees are conducive to happy clients and attract more business.  And what’s not happy about that?

While we’re on the topic of income inequality…

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Image courtesy of 2nix/FreeDigitalPhotos.net

It’s not only the day before Tax day, today also marks Equal Pay Day. Patricia Arquette was spot on in her Oscars acceptance speech which had more to do with income inequality than…well, thanking her very well compensated team. Too bad Ms. Arquette wasn’t armed with the latest report from the National Partnership for Women and Families  at the time. Women “lose more than $490 billion to the wage gap every year.” But that’s just the dismal wretched beginning. On average, women as a whole make 78 cents for every dollar a man makes in the same job. Have kids? That takes it down another penny. But it only gets worse as African American women make 64 cents on the dollar while Latinas only earn 56 cents on the dollar. Single mothers, whose struggles are infinitely higher, make 58 cents for every dollar a man makes. Mad enough now? Help change things. Click here.

Not that you needed to be reminded…

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Image courtesy of vectorolie/FreeDigitalPhotos.net

We’re just hours away from the dreaded Tax Day as gazillions of Americans are getting ready to submit all the tedious details about their fiscal activities. But take comfort in knowing that businesses across the United States are offering the tax-weary all sorts of nifty discounts, coupons and somewhat generous offers. Need a tax extension? Instead of getting a penalty for filing late, get yourself a coupon for an extension. Both E-File.com and TaxExtension are graciously offering discounts of 15-20% off those pesky extension filings. Given this whole emotionally taxing situation, HydroMassage is also offering a coupon for a free massage. But don’t wait. It’s only good through April 17 and I am pretty sure there are no extensions for that one. If all this fiscal drudgery has your appetite on overdrive, there are a bunch of eateries offering all kinds of offers and discounts. McDonalds has a “buy one get one for one cent” on Big Macs and Quarter Pounders. More of a whopper fan? Burger King’s also got a “buy one get one free” deal on those burgers. If Boston Market’s more your thing, then go with a friend  – or not – to buy one dinner and get the second one free. In select Hard Rock Cafes your singing skills, provided you have any, might get you some free grub between 5-7 pm. As for all those trees that were sacrificed in the name of preparing your tax returns, Staples, Office Depot and OfficeMax stores are offering to shed between 2-5 lbs. of documents and other pieces of paper you’d be happy never to see again.

Jimmy Choo: If the IPO Shoe Fits…; Inversions: The Good. The Bad. The Ugly; Soda Vs. the World

I Jimmy Choos you…

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Image courtesy of biosphere/FreeDigitalPhotos.net

Arguably one of the world’s awesomest shoemakers (understatement of the year), Jimmy Choo, propelled to fame thanks to Carrie Bradshaw and “Sex and the City,” is now looking to put a little “pump” into the stock market by coming out with its own IPO next month. Granted, it will be nothing compared to Alibaba’s meteoric rise to the top of the index. Partly because it will be listed on the London Stock Exchange. The other staggering difference is that Jimmy Choo’s valuation, at about $1 billion, will be a wee bit smaller by about oh, I don’t know, $23 billion, give or take. Jimmy Choo has major plans to expand in Asia where  the shoes are not as easy to come by, yet so very many people there want them. And you know, Asia being a pretty huge place and all, has a lot of shoes to fill (sorry, I had to go for that one). The company has seen double digit growth on that continent, especially in China. Which is good because since you can’t score a new iPhone 6+ there, you can at least console yourself with a $2000 pair of shoes.

An inversion by any other name…

Image courtesy of Craftyjoe/FreeDigitalPhotos.net

Image courtesy of Craftyjoe/FreeDigitalPhotos.net

Inversions. They’re baaack. If you recall (and its okay if you don’t), corporations totally dig inversions as a way to reduce the heavy duty 35% tax burden imposed by sweet old Unlcle Sam. Simply put, companies move overseas. It’s a bit more complicated but I’ll spare you all the gory details. The government, this one anyway, gets really annoyed when companies do inversions, because it thinks money is being taken out and away from the US. Now, just as eight major US corporations, Burger King among them, are getting set to pack up their things and head for fiscally greener pastures, US Treasury Secretary Jacob Lew inconveniently announced plans to crackdown on inversions practices and the companies that do them. Lew hopes to “significantly diminish the ability of inverted companies to escape US taxation” and basically make it not worth it for companies to invert. However, Martin Regalia, who just so happens to be the chief economist at the super-important US Chamber of Commerce feels this crackdown is a very very bad idea and says that “the administration just assured that deferred income in the once foreign subsidiary will never come back to the U.S. to help create income, jobs and economic growth here.” Which basically means: “Bad public policy produces bad economic results.”

The skinny on soda…

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Image courtesy of artzenter/FreeDigitalPhotos.net

Your soda is about to get a whole lot skinnier – 20% skinnier. And you can forget Coke vs. Pepsi vs. Dr. Pepper vs. whatever…It’s now soda vs. the world as beverage suppliers are getting their game on to try very hard to get Americans to stop consuming so much sugar,  at least from their beverages. This big unified soda announcement came during the Clinton Global Initiative. Apparently a study was conducted that found how between 2000-2013, the amount of sugar people got from their drinks fell over 12%. Which is all good. Especially because the beverage industry took note of this and will now push water and diet drinks more aggressively. Why, they are even going to market those cute smaller size cans of full calorie soda. Which is a really good thing. Especially because those darling little cans are so much more profitable. More so than the bigger regular-sized cans. Go figure. Oh, and they allegedly help with portion control too.

Amazon is Be-Twitched; Let’s Hear it for the S&P 500; Oh, Burger King

Getting Twitch-y with it…

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Image courtesy of bulldogza/FreeDigitalPhotos.net

Streaming video-game service Twitch just scored a premium deal with Amazon. The super e-tailer just picked up Twitch for close to a billion dollars. Not bad for a service that lets its users watch other people play games. Yes, it’s true. People like to watch other people play games. Whether they’re skilled gamers or total amateurs. The Twitch acquisition happens to be Amazon’s biggest purchase to date. But what was it about Twitch that made Amazon want to add it to its collection? Well, besides the fact that Twitch gets more than 50 million monthly users with about 7 million logging on each day, its users typically linger at the site for around two hours  – that’s two hours of major advertising potential that Amazon is all too eager to tap into. Incidentally, Google was rumored to be the one picking up Twitch. But wouldn’t you know  it….some pesky antitrust issues were getting in the way, presumably because Google already owns the competition – YouTube.

Gimme an S, gimme a P…

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Image courtesy of Photokanok/FreeDigitalPhotos.net

The S&P 500, which so often toys with our fiscal emotions, just hit the 2000 mark today. Oddly enough, even though it took the index thirteen years to go from 1500 to 1600, since March of 2009, the index has rallied in a very bullish market, with companies listed on it gaining around 200%. Companies listed in the S&P inlcude Apple, Google and Facebook.  The index is seen as important in terms of the Wall Street psyche. Which is all well and good, since these days the index seems to be indicating that stocks – some anyway – are worth the investment.

Can’t tax this…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

In the latest exodus of major companies, Florida-based Burger King is getting set to cross the Canadian border as talks are in the works for a merger between the burger powerhouse and Canadian-based coffee and donut chain Tim Hortons. Besides the fact that Canadians are just so gosh darn nice ( I know this to be true as some of my best friends are Canadian), the country’s corporate tax laws are equally lovely – and considerably lower. Wall Street seemed to also be pleased by the news of this merger as shares of both companies took a nice hike north  – no pun intended – well maybe a little. This move is sure to help Burger King stake out some territory in the increasingly competitive breakfast arena. Of course leave it to politicians who would like to spoil a perectly lucrative merger as tax inversions tend to infuriate them. After all, they don’t so much appreciate US companies defecting in favor of better tax rates. But then perhaps those politicians should focus their efforts on tax reforms instead of trying to prevent these inversions. Some factions in Canada aren’t too thrilled about the inversions either as Canadian comapnies get conveniently scooped up by its neighbors to the south. It should be duly noted that this merger will not dramatically decrease Burger King’s tax rate which is already at a 27 % tax rate, compared to the usual US corporate tax rate of 35%. But Canada’s corporate tax rate is a major bargain at 15%. And who doesn’t like a bargain, eh?