Fall-Mart; Twitter Fires, Twitter Hires; Feeling Spent

Execu-llent…

Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Even though Twitter announced yesterday that it is shedding 8% of its workforce, today the social media company announced that its adding someone new to that very same workforce. Enter Omid Kordestani who is jumping the Google ship in order to bring his fiscal talents over to embattled Twitter.  Omid will assume Jack Dorsey’s old title of executive chairman, which he dropped last week when he, once again, assumed the title of CEO. Omid Kordestani comes to Twitter from not-at-all embattled Google Inc. where he not only left the post of Chief Business Officer, but also $115 million in equity awards. That’s according to a regulatory finding, anyway. Omid, who was apparently employee number 11 at Google, and affectionately called Google’s “business founder” by Larry Page, left the company in 2009, but returned in 2014, only to head on off into the Twitter sunset.  Even though Omid Kordestani started his Twitter account back in 2012, his most recent tweet about his new post, was only his eleventh time using the platform. His lack of tweeting is, presumably, about to change.

Not “fine” by me…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Wal-Mart might be the mother-of-all retailers but, as they say, the bigger they are, the harder they fall, especially on Wall Street. And unfortunately, a big company like Wal-Mart has a nasty little way of taking the Dow Jones Industrial Average with it.  This particular fall was, unfortunately, rather epic. Wal-Mart took a $20 billion hit because it’s predicting a very disappointing forecast. The world’s largest retailer doesn’t expect to experience growth for fiscal 2016 (which ends in February, btw). Investors loathe bad forecasts. Well, who doesn’t? This bad forecast gave way to Wal-Mart’s biggest stock drop in 15 years and shaved 9% off the value of its shares. Of course, the strong dollar gets part of the blame as it’s hurting sales abroad. But then there’s the investment the company is putting into its e-commerce. Wal-Mart is looking to plunk down $900 million next year, and over a billion dollars the following year to beef its tech efforts. All that cash is going to gouge those much relished profits. Also eating into those profits are wage increases that the company is giving out to thousands of employees. But what really got Wall Street in a fit was when Wal-Mart CEO Doug McMillion told CNBC interviewers that Wal-Mart will do “fine” during the holiday season. And that one word means anything but to investors.

Save it for later, will ya?

Image courtesy of  FrameAngel/FreeDigitalPhotos.net

Image courtesy of FrameAngel/FreeDigitalPhotos.net

Retailers aren’t exactly giddy these days as more Americans decided to save up all that money from low gas costs instead of spending it. As a result, retail spending only experienced a .1% gain in September even though analysts predicted gains from .2% to .6%. Since consumer spending accounts for 70% of the economy, that .1% gain is nothing but brutal fiscal news. In fact, seven out of thirteen retail categories experienced declines. Ironically enough, gas stations took a 3.2% hit because…can you guess? Lower prices at the pump. Hence, they couldn’t pull in all that cash like they did in the past. What isn’t ironic, just annoying and mildly disconcerting, is that this .1% was the biggest drop since January and represented no change from August. So get out there and spend!

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CEO’s Paychecks Getting the AFL-CIO Mad; Americans Didn’t Whip Out Their Wallets Much in April; In: DuPont Proxy War, Out: Boxing

So what’s the problem?

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

The AFL-CIO is all worked up about CEO salaries and just how disproportionately higher they are than everybody else’s. The organization came out with a new report detailing all the juicy numbers found in an average CEO’s salary and the insane wage inequality crisis that goes along with it. AFL-CIO President Richard Trumka said, “America faces an income inequality crisis because corporate CEOs have taken the raising wages agenda and applied it only to themselves.”  CEO’s apparently rake in an average of $13.5 million a year, about $37,000 a day and a whopping 373 times more than the average worker, who gets a very average $36,000 a year. That $13.5 million figure is, by the way, a 16% increase over the previous year. But when a company starts increasing wages, it decreases profit for the company, which poses quite the dilemma for a company like say, Wal-Mart, with whom the AFL-CIO took particular issue. Wal-Mart’s CEO, Doug McMillon, gets about $20 million a year, according to the AFL-CIO’s report. However, Wal-Mart adamantly disputes that number since 75% of his paycheck is based on reaching his performance goals – which he did not – and hence, received less. Like maybe a couple of million less. According to other statistics, of the 250,000 CEO’s in the nation, the average pay is closer to $180,000.

Speaking of money…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Americans didn’t show the money in April, according to the Commerce Department, at least for cars, furniture, department stores…well, you see where I’m going with this. Some find this a bit unnerving since spending accounts for 70% of the economy. In fact April’s spending flatline is surprising considering all the steady hiring gains we’ve been seeing in the last twelve months, not to mention the 3 million jobs added that pay people money which they presumably were not inclined to spend. Even March saw a 1.1% increase in spending. April’s digits might have been worse had it not been for gains in restaurants, apparel and online spending offsetting those decreases in other areas. So what gives? Analysts aren’t too concerned since finding gainful employment hasn’t been a problem, a fact which tends to calm everybody’s nerves. Except paychecks don’t seem to be getting fat enough (see previous item) which does put a crimp on those spending figures.

Them’s fightin’words…

Image courtesy of Boians Cho Joo Young/FreeDigitalPhotos.net

Image courtesy of Boians Cho Joo Young/FreeDigitalPhotos.net

Boxing is so over. But some real fighting took place in the Delaware boardroom at DuPont where a months long proxy war took center stage and made Pacquiao vs. Mayweather look like a “Golden Girls” rerun. A clear and decisive winner emerged and it was NOT Nelson Peltz’s Trian Fund Management Fund. The activist investor had four nominees up for board positions but not even one scored a coveted spot. Ouch. Trian started it all back in January, with activist investor Nelson Peltz’s big dreams, and real plans too, to split DuPont into two different parts. CEO Ellen Kullman, along with many other in DuPont’s management, did not particularly care for Mr. Peltz’s idea, feeling it would basically destroy shareholder value. Apparently, they weren’t the only ones who shared this sentiment and hence won the war. This time, anyway. But Trian still has a 2.7% stake in the company which is worth about $1.8 billion so despite the epic loss, Nelson Peltz probably won’t be going away too quickly. In a statement, the company said “We are proud of the role we played as a positive change agent at DuPont. The vote was close. … We will continue to closely monitor DuPont’s performance.” Awkward.

Airbnb Books It For Cuba; Headed Out of Indiana; Walmart’s Beef With Discrimination Bill

Bienvenido…

Image courtesy of  taesmileland/FreeDigitalPhotos.net

Image courtesy of taesmileland/FreeDigitalPhotos.net

With the normalizing of relations between the United States and Cuba, you can be sure that businesses are on the hunt for the countless opportunities that can be found on the island nation. Netflix made its Cuban debut a few months back, along with a handful of other companies. Now its Airbnb’s turn. The online rental website for wallet-conscious travelers saw a 70% spike in searches for rentals on the island nation following President Obama’s announcement about the easing of restrictions there. The way Airbnb sees it, “We are actually plugging into an existing culture of micro-enterprise in Cuba. The hosts in Cuba have been doing for decades what we just started doing seven years ago.” So far the website has over a thousand rental listings. But the rentals can only be used by U.S travelers and travelers must have one of the required licenses to even travel there. Many feel that Cuba could become one of Latin America’s biggest markets, but some are skeptical that Airbnb is going to be able to take much advantage of that. With 15% of Airbnb’s fee being split between the renter and the owner, it seems likely that Cubans would rather forego Airbnb’s services and keep that extra cash for themselves. Then there’s the issues about the lack and slowness of internet access which just might impede some travel opportunities, not to mention profits, that are found online.

It’s only getting worse…

Image courtesy of stockimages/FreeDigitalPhotos.net

Image courtesy of stockimages/FreeDigitalPhotos.net

Salesforce.com CEO Marc Benioff is socking it to Indiana and its very unpopular decision to sign the Religious Freedom Restoration Act. The San Francisco-based global cloud computing company is offering relocation packages to employees who don’t feel comfortable in the Hoosier state as a result of the new law. Several employees have already taken advantage of the relocation offer. “One thing that you’re seeing is that there is a third [political] party emerging in this country, which is the party of CEOs.” In fact, more than 39 CEO’s signed a joint statement protesting the law and while Indiana Gov. Mike Pence said there would be “fixes” put into place that would offer protections for certain sexual orientation and gender identities, many remain unconvinced, and the economy in Indiana could suffer mightily. While Benioff wouldn’t mind totally ditching Indiana, he still has about 2,000 employees which makes that endeavor a little improbable. But he still has plans to significantly scale back operations there. “We want to invest in states where there is equality.” So basically, you can cross Indiana off the list.

Speaking of which…

Image courtesy of iosphere./FreeDigitalPhotos.net

Image courtesy of iosphere./FreeDigitalPhotos.net

Walmart has done something nobody expected it to do. Not a company known to embrace social issues, it helped shoot down a bill that was similar to the Religious Freedom Restoration Act passed in Indiana. Even though the retailer has been known to support many conservative causes, both fiscally and otherwise, this time it took to social media to protest this particular bill. Walmart CEO Doug McMillon wrote: “Every day, in our stores, we see firsthand the benefits diversity and inclusion have on our associates, customers and communities we serve.” To be fair, it would have been sheer fiscal stupidity not to protest the bill. It made perfect business sense. McMillon further added that the bill “…threatens to undermine the spirit of inclusion present through the state of Arkansas and does not reflect the values we proudly uphold.” He then went on to ask Arkansas Gov. Asa Hutchinson to veto the bill and wouldn’t ya’ know it? When the mighty Walmart talks, the Arkansas governor listens. Gov. Hutchinson amended the law.

Raise Praise for Walmart ; Pinterest Tries to Double Up; Priceline’s Beamed Up Earnings

You raise me up…

Image courtesy of nongpimmy/FreeDigitalPhotos.net

Image courtesy of             nongpimmy/FreeDigitalPhotos.net

It’s a good day to be a Walmart employee. No, seriously. It is. The gargantuan retailer just announced it’ll be raising the salaries of some 500,000 of its hardworking employees raising to about $1.75 more than the Federal minimum wage. Full-time employees will go from an average of $12.85 an hour to about $13 per hour. Part-timers will see their paychecks go up to $10 per hour from the average $9.50 they make now. The pay-raise fun begins in April and CEO Doug McMillon says it’s all part of a master plan to improve customer service, employee morale, etc. Those are all nice and pleasant things, of course, but no doubt Walmart is really hoping it will also lead to higher sales and profit. Walmart figures higher pay will help attract and retain employees that know the value of good customer service. And if it improves its somewhat tarnished reputation for its lousy pay practices in the process then why not?  So how bad could their pay practices have been that the company is implementing this change? Well, a majority of its employees’ salaries were so low that, all together, they were eligible to receive millions – I repeat, millions – of dollars in public benefits.  This initiative will cost Walmart about $1 billion, but hey, you’re worth it.

 In the land of unicorns…

Image courtesy of vectorolie/FreeDigitalPhotos.net

Image courtesy of vectorolie/FreeDigitalPhotos.net

The next social media darling that may be headed off to the wonderful, not-so-mystical land of Silicon Valley “unicorns” is Pinterest. By “unicorns,” I am referring to billion dollar startups, a term thoughtfully coined by Cowboy Ventures founder Aileen Lee. But apparently these “unicorns” are turning out to be a bit more ubiquitous than previously thought as Pinterest is but among a larger group of “unicorns” and “decacorns” and “super-unicorns”…but I digress. Founded by CEO Ben Silbermann, Pinterest graciously allows users to “pin” images of all kinds of stuff that appeals to them on their boards, thereby bringing light and joy to the world. And now Pinterest is said to be adding a “buy” button. That ought to bring even more light and joy. Adding e-commerce into the social media start-up picture tends to prove lucrative on so many levels. Pinterest is rumored to be raising funds to the tune of $500 million. Any takers? This new round of funding would put the company in the $11 billion valuation stratosphere, nearly doubling its $5 billion valuation it had back in May.

But what does this mean for Captain Kirk?

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Priceline, the company shilled by the inimitable William Shatner, beat Wall Street estimates for its fourth quarter earnings taking in almost $452 million with adjusted earnings at $10.85 per share. Well beam me up on those numbers, Scottie, because analysts only expected Priceline to score $10.05 per share. Those impressive digits were helped by growth from hotel and car rental reservations. Revenues were $1.84 billion and, once again, those analysts predicted the online travel booking service would only rake in $1.8 billion. Naturally, shares of Priceline took a joyous upswing in the news and clearly sending the message to Wall Street that the Orbitz-Expedia deal didn’t seem to have any adverse affects on the company. Well, not yet, anyway. If you’re in the market for some shares of Priceline, it’ll only set you back about $1,200.00…per share.

Messing With Harry Potter, Pharrell Is Happy For Wal-Mart? and The Great Depressing American Dream

Stephen Colbert is at war…

Image courtesy of bplanet/FreeDigitalPhotos.net

Image courtesy of bplanet/FreeDigitalPhotos.net

If you thought messing with iconic Harry Potter author JK Rowling was bad, Amazon now must contend with the extremely witty Stephen Colbert who has entered the drama currently being played out between Hachette publishing and Amazon.com. Colbert also happens to be a Hachette author with his 2012 publication of America Again: Re-becoming The Greatness We Never Weren’t. Good thing he has his own nationally broadcast show, The Colbert Report, where he was able to vent that he was “not just mad at Amazon … I’m mad Prime,” and then basically informed Amazon founder and chief Jeff Bezos that the two men are at war. He also brought out a sticker campaign boasting the phrase “I Didn’t Buy It On Amazon.” Of course, it wouldn’t be right if Colbert didn’t employ his (pixelated) middle finger to which he graciously informed his audience that “customers who enjoy this, also enjoy this.”

It’s Wal-Mart party time…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

In case you were looking for Pharrell on Friday, he was in Arkansas partying with Wal-Mart. Yes. You read that correctly. As part of its annual shareholders meeting, attended by 14,000 plus Wal-Mart employees from all over the globe, Wal-Mart threw itself a massive, self-congratulatory, star-studded event. Naturally it wouldn’t be a Wal-Mart party without its very own protestors but the list of things being protested against Wal-Mart is way too long for this blog. Newly anointed CEO Doug McMillon, who took over the retail giant’s reins in February, told the attendees of his big plans to speed up change and keep pace with emerging technology. Robin Thicke, Avicii and Florida Georgia Line were all part of the entertainment line-up while the incomparable Harry Connick Jr. emceed the festivities replete with dunk tanks and zip-lining. All while the CFO applauded Wal-Mart’s $473 billion in sales and $28 billion in income which is ironic since Wal-Mart’s sales have been going down for the last five quarters.

Sweet Dreams aren’t made of these…

Image courtesy of Theeradech Sanin/FreeDigitalPhotos.net

Image courtesy of Theeradech Sanin/FreeDigitalPhotos.net

According to a new poll with depressing results, six in ten Americans feel turning their dreams into a reality is…but a dream. Over a thousand people were surveyed and most feel they’ll be worse off than their parents. Most also feel children will not be better off than their parents and while most Americans have more wealth than their parents, it’s primarily because there are now two earners in a typical household. The perceptions are based on current economic conditions and the fact that most people are finding it harder to get better jobs with better pay. But the silver lining (if you want to call it that)? There are two: 1.Parents still believe their kids can succeed, though it will be harder. 2. This poll was about perceptions which don’t translate to facts. Don’t you feel so much better now?