Fitbit Fit to be Publicly Traded?; It’s All About the Vice for Dollar General; Start Saving, Health Insurance is on the Rise. Again

Working up a sweat…

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

You may not own a Fitbit (yet) but perhaps you might be interested in owning shares of the company instead. The fitness monitoring device, which collects data on how much exercise you do – and don’t do – along with how much sleep you get – and don’t get – is now looking to fiscally beef itself up for some IPO action. The company, started by James Park and Eric Friedman, already pulled down $745 million in revenue and $100 million just last year. Fitbit is looking to raise $478 million to put out 29.85 million shares that might just fetch somewhere between $14 – $16 per share. That ought to give Fitbit a hefty $3.3 billion valuation. Of course, with any IPO, Fitbit has its share of detractors who are eager to point out the oodles of competition from, among others, Apple’s Smartwatch, Samsung and Jawbone.  The other issues that have investors skeptical is the tendency of fitness device wearers to ditch the “bits” within months, though I am not pointing any fingers, if only because I don’t have enough. Research found that a third of fitness device wearers ditch them within six months of getting them. Too bad you’ll have to wait until June 17 to find out the exact IPO price. But at least it gives you some time to start saving up.

Can I get a light?

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Dollar General sells a lot of useful stuff for dirt cheap and who doesn’t like that. But it was the not so useful stuff that helped the chain boost its sales this quarter. And by “not useful” I am actually referring to a little category dubbed “vice spending.” Yes, sales from tobacco and candy generated a greater portion of sales, in addition to its less vice-ful, or vice-free merchandise. Dollar General managed to rake in $4.92 billion in revenue. While that number just barely missed expectations, Wall Street didn’t seem to mind as it was still an almost 9% increase over last year and and that came with a very satisfactory profit of $253.2 million adding 84 cents per share. Analysts only expected 82 cents per share, by the way.  Even though same store sales grew 3.7% as opposed to the 4.1% expected by analysts, Wall Street still wasn’t upset and instead sent the stock up about 5%. Apparently, the stores were still seeing a lot more traffic i.e. customers who were shelling out a lot more cash. And if “vice” spending takes the credit for that, then so be it.

Stick out your tongue and say argh…

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Image courtesy of ddpavumba/FreeDigitalPhotos.net

If the cost of your health insurance doesn’t suck enough, then get ready for 2016. Many many many health insurance companies have big expensive plans to ask state regulators to allow them to hike premiums on individual policies, whether they’re on the Obamacare exchange or not. We’re talking double digit increases. Apparently, these companies didn’t anticipate an increase in the amount of people going for doctor’s visits and getting prescriptions filled. Which is kind of weird because, don’t insurance companies pay people big salaries to anticipate such expenses? Just asking. Even though insurance commissioners and regulators can deny insurance companies their proposed rate hikes, it’s likely they’ll get approved for some type of increase, just maybe not as much as the insurers would have liked. So maybe you should start saving up to pay for your health insurance rate hike instead of those Fitbit shares.

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The General Gets Hostile; Alibaba’s IP-Whoa!; No Sugar High for Krispy Kreme

Oh no you didn’t…

Image courtesy of lam nee/FreeDigitalPhotos.net

Image courtesy of lam nee/FreeDigitalPhotos.net

In the dollar store wars, things just got uglier as Dollar General went hostile on potential acquisition target, Family Dollar. If you recall, the powers that be over at Family Dollar dissed the two offers that Dollar General made – offers that were higher than Dollar Tree’s, Family Dollar’s other admirer. Dollar General is eager to bring Family Dollar into its fold, especially because Wal-Mart is getting a bit too cozy in the deep discount dollar store arena. Dollar General graciously offered to yank 1,500 of its stores to avoid antitrust issues. It even offered to pay a $500 million break-up fee if indeed antitrust issues killed the deal. Now Dollar General is going right to the shareholders to entice them with its very generous offer  CEO Howard Levine, who happens to be the largest Family Dollar shareholder, would probably be out of a job, if the deal goes through. However, he still stands to pocket as much as $750 million – which should tide him over for a little while.

Can I get in on that?

Image courtesy of cute image/FreeDigitalPhotos.net

Image courtesy of cute image/FreeDigitalPhotos.net

Wall Street is gearing up to welcome the newest addition to one of its indexes. Alibaba, whose IPO is expected to leave Facebook’s 2012 $16 billion record-breaking IPO in the dust, is looking to offer those shares for between $60-$66 per share. About 320 million of those shares will be eagerly offered up to retail and institutional investors. It’s likely the mega e-commerce site is going to raise around $20 billion. Alibaba, is a lot like Amazon. Except that it’s China-based. And ridiculously larger on so many levels. Good thing Yahoo owns a sizable chunk of it. The company’s value is expected to reach somewhere in the stratosphere of $160 billion, give or take a few billion.

Kreme’d…

Image courtesy of holohololand/FreeDigitalPhotos.net

Image courtesy of holohololand/FreeDigitalPhotos.net

Krispy Kreme released its earnings with mixed signals.  You see, the makers of arguably the most delectable donut on the planet experienced a 22% rise in profit, as it should. A proper reward for making such a delicious pastry. But alas, the company missed expectations, causing shares of Krispy Kreme to go down 6%. I know, it just isn’t right. Or fair. Net income was $5.75 million from $4.7 million a year ago gaining around $0.07 per share.  Revenue was up around 7%. The North Carolina-based company is currently in the process of bringing its delicacies abroad to bestow its sugary happiness on other parts of the world. This is expected to not only cause great joy and sugar highs, but a nice fiscal boost, as well.

 

How Do You Spell Economic Growth?; The Buck Still Hasn’t Stopped; Germany Puts the Brakes on Uber

Just keeps growing and growing…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

New numbers are out today that wont leave you feeling numb courtesy of the Institute for Supply Management. And guess what, oh patient consumers of the US economy? Things are looking up. Really up. Like expanding, upwards – not that that makes any sense. According to this super-duper important index, manufacturing in the US grew and grew leaving the estimates of super-intelligent economists in the wind. From a 57.1, this index grew to 59. This is major. Majorly good, as anything above a 50 means growth is happening. Not only is growth actually happening but it’s happening at its fastest pace since March 2011. Cha-ching, baby. So what does this mean for all of us? It means that almost all manufacturing sectors are growing and giving fuel to our ever-stubborn and sometimes fickle economy. Which is way more exciting than the season premiere of Scandal. Ok, well maybe not that exciting.

Buck wild…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The Dollar store war saga is back on again with Dollar General Corp upping its ante for Family Dollar Stores Inc with an offer that is worth $9.1 billion. After doing some ridiculously long division, that comes out to $80 per share. A whole $1.50 more than the previous offer Family Dollar Store rejected. Apparently Family Dollar was “concerned” about antitrust issues. That and also Family Dollar Store CEO Howard Levine’s job. A successful deal between Dollar General and Family Dollar would probably require Levine to become thoroughly acquainted with LinkedIn. So Family Dollar was instead seriously entertaining a smaller offer from Dollar Tree. But Dollar General is so convinved that there will be no antitrust issues that it graciously offered to sell 1500 stores and pony up $500 million in the event that there are indeed antitrust concerns (which I guess means there are no antitrust issues?). Dollar General even generously offered a $305 million break-up fee to Dollar Tree. If that’s not devotion, then I don’t know what is. As for Levine, well, he might want to polish up his resume…

U-burn…

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

Uber hit the skids in Frankfurt, Germany after the courts there issued an injunction against the ridesharing app. The suit, not surprisingly, was brought by Taxi Deuschland who was losing lots and lots of business to the San Francisco-based company and watching the five year old company grow five-fold in Germany. Uber,  currently valued at over $18 billion, was “found” by the courts not to be operating with the proper and necessary commercial permits, licenses and insurance. Whatever. Naturally, Uber is appealing.

 

UPS Gets Hacked; Dollar Store Battles: Short on Glamour, Long on Drama; Housing Hits It

Do I need to sign for that?

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

UPS now joins that distnguished, tadly crowded field of hacking victims. Between January 20 and August 11, over 100,000 transcations may have been affected by a data breach. But lucky for UPS that it is nothing like the Target behemoth, whose own data breach affected some 70 million customers. That’s because UPS stores are not interconnected, but rather individually owned. Hence, of the over 4,500 UPS locations, only a little over 50 stores in 24 states were affected. How convenient. Sort of. Anyways, UPS, which now became the 58th largest company, taking out a not-so-smug-anymore Eli-Lilly & Co., will offer customers affected by the breach free credit monitoring and identity theft protection for a whole year. How convenient. Sort of. Anyways, after that you’re on your own.

The buck stops here…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

In the drama-packed world of dollar stores, the latest episode has Family Dollar rejecting a $9 billion buyout offer from Dollar General. Instead, the dollar chain store is thought to be seriously considering another offer from contender Dollar Tree not so much because it’s offering more money – because it is not. Dollar Tree offered only $8.5 billion. Rather, because the deal from Dollar Tree would likely allow Family Dollar CEO Howard Levine to keep his day job. The deal from Dollar General would probably have Levine taking LinkedIn resume workshops by now. Apparently there are also some anti-trust issues associated with a deal from Dollar General. Allegedly. Back in June, activist investor Carl Icahn had a hefty 9.4% stake in Family Dollar. These days his stake is around 3.6%. What that tells us could be a lot. Or nothing at all. But probably a lot. And while all this talk about dollar stores might seem funny to you, just know that there is nothing funny about the tens of BILLIONS in cash that these discount stores rake in.

Home sweet affordable home…

Image courtesy of hywards/FreeDigitalPhotos.net

Image courtesy of hywards/FreeDigitalPhotos.net

It’s been an exciting July. Maybe not for you. But for the housing market it sure has been. And yes, the words housing market and excitement can go hand in hand, especially since July marks the fourth straight month that existing home sales increased – a sure sign that the housing market is headed in the right – up – direction. Unfortunately, as I have written several times, the housing recovery just hasn’t been happening quick enough. Sure, sales were up 2.4%, but that percentage is still way down from where it should be in a truly healthy market. Right now, it’s like the housing recovery is at the end stages of a cold, still some coughing and a slightly runny nose.  However, home construction surged a very impressive  15.7%. That and the fact that interest rates are low and there’s more inventory coming up should make for an equally riveting August. We hope.

And the winner is…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Tyson. Not Mike, silly! He’s busy doing movies with Bradley Cooper. I meant Tyson Foods Inc. (TSN) What? You weren’t at the edge of your seat for this one? Hillshire Brands (HSH), the company behind some of the most beloved brands like Jimmy Dean Sausages and Ball Park hot dogs has, according to the corporate rumor mill anyway, accepted Tyson’s very juicy offer of $63/share which adds up to a plump $7.7 billion. Also, sort of coming out a winner is Pilgrim’s Pride (PPC), maker of Vlasic Pickles, as the company stands to gain $163 million just because Hillshire bailed on the deal it (thought) it had with the company just a few weeks back. But if you’re wondering why Tyson was so eager to get its hands on Hillshire, look no further than deli. No not New Delhi. Just deli. Prepared foods bring in lots more money than raw foods do. Tyson wants to make a name (and a few bucks) in that market and the Tyson/Hillshire combo could help nicely by bringing in sales of around $40 billion. That’s a lot to chew on.

A slice of Cupertino Apple pie…

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

Now that Apple’s stock has split seven to one (meaning for every share of Apple you own, you lucky investor, you get six more!) the price of the stock is almost affordable! Just from the earth-shattering excitement of Apple’s announcement back in April that it was planning a split  – the first in nine years –  the stock climbed 24% on that news alone. Big riveting things are happening in Cupertino. Apple is expanding its stock buy back program, increasing its dividend program and it would be remiss not to mention the momentum from that very hip $3 billion Beats deal. Now shares are hovering above $90 a share. And to think it was just Friday when a single share fetched almost $650.

Bargain hunter…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

You may not find him pushing a cart full of merchandise down the aisles of your local Family Dollar (FDO)  – though the visual fills me with convulsive laughter – but billionaire Carl Icahn is very interested in the bargain-friendly establishment. Actually he has over a 9% interest in the company, causing investors to wonder if (or just assume) a takeover is impending. The company did put a “poison pill” in place which is not as scary as it sounds. Unless you’re the company adopting one. A “poison pill” or as it is less glamorously known, an anti-takeover measure, was adopted by Family Dollar because it doesn’t care to be pushed into a deal with Dollar General (DG), as many suspect Icahn and his fellow billionaire cohorts plan to do. Expect more bargain-unfriendly drama to unfold.