Uber Drama Revs Up; Gymboree’s Next Chapter in Life: 11; Aldi Ready to Feed You For Less. Much Less

These are the days of Uber’s life…

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Image courtesy of marcolm/FreeDigitalPhotos.net

The Silicon Valley soap opera we call Uber is making awkward, unpleasant headlines again. This time it’s because the rumor mill is swirling with talk that Uber CEO, Travis Kalanick, is about to take a leave of absence. Which begs the question about how this new development will affect Uber, if at all. Then we turn our attention to the now ex-number two honcho at the ride-sharing company, Emil Michael, who has left the Uber building. It’s doubtful he’ll be missed that much since he was apparently pressured to step down. In fact, Kalanick was advised to let Michael go earlier this year, however he declined to entertain that suggestion – a decision that eventually bit him in his corporate butt. Perhaps had Kalanick let Michael go when asked to do so, he might not find himself figuring out how to spend all his newfound free time. All this unpleasantness – well for Kalanick and Michael, anyway – ensued following a meeting with Eric Holder’s law firm. You remember him, dontcha? He’s the former U.S. Attorney General and if he’s got some recommendations, it’s prudent to follow them. Holder’s firm was retained by Uber to conduct internal investigations following accusations of sexual harassment and gender bias. The findings, his firm reported, were “ugly.” That doesn’t bode well for the world’s most valuable privately held company, now does it?

Another one bites the dust…

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Image courtesy of aechan/FreeDigitalPhotos.net

Today’s Chapter 11 bankruptcy filing is brought to you by Gymboree, the children’s clothing store chain which can be found in just about any mall in the United States. Well, maybe not for much longer. The company still plans to remain in business, it’s just going to be shuttering anywhere from 375 to 450 of its stores. But rest assured, if you’re a frequent patron of the chain, there will still be well over 800 stores left from which to do your kids’ clothes shopping. If you are at all shocked about the store closures and bankruptcy filing, then clearly you aren’t one of the many creditors Gymboree refused to pay in the last few months. With increasing online competition and a major slowdown in mall traffic, it’s no wonder Gymboree just couldn’t make bank. The company is staring down the wrong end of $1.4 billion worth of debt and hopes to nail down a plan to help it shed about $1 billion of it.  The kicker, though, is that the company is still profitable, a bonus that a lot of analysts think will help propel Gymboree towards a bright, shinier fiscally nourishing future.

Grab your cart…

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Grocery chain Aldi has got some lofty goals. And if you’re thinking you’ve never heard of the chain, then just wait. The company just announced a $3.4 billion plan to make sure you do. Aldi has set its grocer sights on becoming the third largest grocery chain behind Kroger and Walmart. The grocery store chain currently boasts 1,600 locations from which to purchase your groceries, but by 2022, it expects to have 2,200 stores gracing the country.  Some 1,300 of its pre-existing stores are also being treated to a $1.6 billion remodel. And who doesn’t love a little remodel? However, the biggest thrill of all is that Aldi is going to attempt to price its merchandise over 20% lower than its rivals while adding 25,000 jobs in the process. If that doesn’t sound appetizing, the I don’t know what does.

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Airbnb Apologizes for Slow Reaction to Site’s Racists; Wells Fargo Eats $185 Million for Ridiculous Sales Quotas; Apple’s Latest Bites Wall Street

Diss-crminate…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Airbnb said sorry. Not because of all the discrimination that occurs on its site but because Airbnb was on the slow side when it came to responding to complaints about racist hosts and all the horrible stories surrounding #AirbnbWhileBlack. So, like any major company hit with a scandalous fiasco, Airbnb, which has a valuation around $26 billion and hosts in more than 30,000 cities, has come up with a new set of policies it hopes will act as a deterrent to those who wish to practice discrimination. Now, if would-be hosts claim that their lodgings are unavailable for certain dates, Airbnb will not allow those users to re-list their lodgings at a later time for the same-exact dates. While the site plans to reduce the significance of profile photos, critics argue that there shouldn’t even be any photos of hosts and guests. That way host discriminators can’t claim their lodgings are “unavailable” based on the color of a guest’s skin and guests wouldn’t be able to choose accommodations based on a host’s race and/or ethinicity. Airbnb, however, disagrees and feels that photos are a security measure that allows hosts and guests to recognize each other. Just for good measure, former ACLU head Laura Murphy and former U.S. Attorney General Eric Holder were brought in to consult and institute the new company policies.

No credit to you…

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Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Fraud hurts. Just ask Wells Fargo, now that it will be choking down more than $185 million in the form of fines and penalties for pushing customers to open accounts that they didn’t want. According to the Consumer  Financial Protection Bureau, the largest U.S. bank opened some 2 million fee-generating accounts that were probably not authorized. Of those, 565,00 unwanted credit card accounts were opened. This was the largest fine ever imposed by this agency. Some employees took the liberty of opening accounts for unwilling customers and when that failed, made up fake accounts and even forged signatures. All in the name of sales quotas. The complaint was filed following an investigation that began back in 2013. The employees said they took those measures because of the intense pressure of meeting some very strict and unreasonable sales quotas. Wells Fargo has set aside $5 million to cover refunds to customers.  As part of the settlement, Wells Fargo doesn’t have to admit wrongdoing. I guess the $185 million says it anyway. But be sure to stop by your local Well Fargo. Employees there are eager to help you close up any accounts customers don’t want. Well, maybe eager is not the right word.

Overripe…

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Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Wall Street is not sweet on Apple today as the latest iPhone 7 failed to impress the masses and the analysts. The lackluster reception for the device put a drag on the Street sending the stock down 2.3% at one point. That was its biggest one day fall since June 24th’s Brexit vote, when investors scrambled to unload their Apple shares. Gone is the headphone jack, replaced by the aptly named AirBuds, which are sold separately for a cool $159. How very shrewd – or callous? – of Apple to take that route. The AirBuds innovation sheds a whole new light on Apple’s $3 billion deal to pick up Beats and their headphone technology. But, to be fair, the phone is water and dust-resistant and I’ll be the first to admit that the water-resistant feature speaks to me. Apple has a market value of around $680 billion, but brass at the company have no plans on sharing how many iPhones will have been sold by the weekend’s end. That’s presumably because of the gadget’s less than impressive…impression.

Twitter Tries to Up Its Game, Olive Garden Not Blooming and BofA Wants Quality Time With the Attorney General

Tweeting it all out…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Twitter just announced plans to snap up SnappyTV for an undisclosed amount. SnappyTV is a video sharing service where users can do all sorts of convenient and entertaining things like clip and share videos. Twitter is forging ahead with great big plans to integrate SnappyTV and all the visual enhancements it is bringing with it into Twitter Amplify. And really, who doesn’t love visual enhancements?  The social media company is in a mad crush and rush to grow its user base after announcing a less than 6% increase in growth. Numbers like that did less than wow investors and so it is on a mission to find ways to justify its high valuation that many have been calling into question.

Darden leaves Wall Street hungry for more…

Image courtesy of Feelart/FreeDigitalPhotos.net

Image courtesy of Feelart/FreeDigitalPhotos.net

Darden Restaurants, the apparently not so forceful force behind the Olive Garden chain, failed to feed enough people and beat analysts expectation. Despite its efforts to dump the Red Lobster chain, the company’s profit wasn’t as high as Wall Street would have liked. Revenue for the period ending in May was a paltry $2.32 billion. But the hard-to-please Street was looking for $2.33 billion in revenue. Even though the company gained $0.84 a share, Wall Street was left unsatisfied and wishing for $0.10 more per share. The company and its food offerings is having a hard time competing with fast-food establishments that have been offering better quality food with more affordable prices. As a result, Darden’s net income fell a whopping 35% from a year earlier.

BofA feeling unsettled…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Looks like Bank of America CEO Brian Moynihan wants to spend some quality time with US Attorney General Eric Holder. But bonding is not on the agenda. Instead, the BofA CEO wants to try and hash out the kinks over settlement issues. BofA, the second largest bank in the United States sold some really bad loans a few years back, in case you hadn’t heard. Now the time has come to pay for all the trouble it caused and the price tag on all that trouble is going to cost billions of dollars. Reps for the bank and reps for the Justice Department already had a bunch of meetings to try and reach an agreement. But the two sides just couldn’t play nice. So Moynihan probably took a cue from JP Morgan Chase CEO Jamie Dimon, who also personally met with Holder in back in November where the two sides emerged with a $13 billion settlement agreement. While the move seemed peculiar at the time, the fact is that it worked and the formula has been used with other naughty banks that helped cause the epic 2008 financial crisis.

Spacing Out Thanks to the FAA, Will France Say Adieu to $10 Billion? True or False: $59 Fares

Cleared for liftoff…

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Image courtesy of Victor Habbick/FreeDigitalPhotos.net

Sir Richard Branson and his impending fantastic space voyage are good to go as far as the Federal Aviation Authority (FAA) is concerned. Virgin Galactic, co-owned by Branson and Abu Dhabi’s Aabar Investments mapped out an agreement with the FAA over how the intergalactic adventure will work with US airspace. It hopes to launch its first flight on SpaceShipTwo by the end of 2014. Hundreds of people have already signed up for a flight that only sets them back about $250,000 – and is, of course, payable via super-cool and super un-regulated bitcoins.

Au revoir, BNP?

Image courtesy of 1shots/FreeDigitalPhotos.net

Image courtesy of 1shots/FreeDigitalPhotos.net

France’s biggest bank, BNP Paribas, is already in some tres hot water over violating US sanctions against unpleasant countries like Iran and Sudan. The Justice Department has been conducting its investigation for quite a while and feels the time has come for BNP Paribas to finally pay for its wrongdoings to the hefty sum of $10 billion. What’s so special about this figure, besides its enormity is that it would be the biggest fine ever imposed on a misbehaving bank –by fives times as much. BNP, however, feels it should only have to pay around $8 billion. But Attorney General Eric Holder has even bigger plans as he is eager to remind the banking industry that none of them are “too big to jail.” He wants to bar BNP from even trading assets ( or as it’s called on The Street, dollar clearing) besides throwing the responsible individuals into the less than illustrious ranks of the unemployed.

Southwest. Oops. They did it again. And Again…

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Image courtesy of digitalart/FreeDigitalPhotos.net

Southwest was in a whole heap of trouble yesterday and had to pay some embarrassing and avoidable fines (hey, just like BNP will likely do, almost). The trouble began when Southwest posted $59 fares on its website flying from Atlanta to LA, Chicago and New York. Of course those fares were too good to be true. Would be travelers were told that those fares were not available and were a mistake and never meant to be part of the sale even though they were heavily advertised. Hmmm. The US Department of Transportation didn’t care for this show of false advertising and let them know it. Lucky, for the airline it only had to pony up $300,000 which is probably what it earns in the time it takes you to read this paragraph. Despite its questionable sales tactics, shares of the airline have gone up over 40% this year. Another hmmm.

Springing Unemployment, GrubHub Grab and High Frequency Drama

Look out unemployment, here comes Spring…

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Image courtesy of cooldesign/FreeDigitalPhotos.net

Weather, that fickle pernicious economic backstabber couldn’t stand in the way of the 192,000 jobs that were added last month, according to The Bureau of Labor Statistics.  However, experts were expecting that number to be a bit higher. They’re still satisfied, though, since unemployment stayed at a stubborn 6.7% – but to be fair, experts weren’t expecting that figure to budge from its perch anyway. If that doesn’t make you giddy, then how about the fact that there were actually more jobs added in January and February than previously reported. I know you can’t stand all this excitement but wait…there’s more!  The private sector has replaced/regained/re…whatever all the jobs it lost since December 2007 – which was the beginning of the ugly, terrible, horrible period we abhorrently call The Great Recession.

GrubHub is taking a big bite out of Wall Street today…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The latest IPO to grab Wall Street’s conditional love is GrubHub, the Chicago based online service that gets a commission from a restaurant every time YOU order from their website. The company which also owns Seamless.com and Menupages raised a hefty $192 million and the stock flew over 40% today. It’s currently serving over 28,000 eating establishments from San Francisco to London with sooooooo very many more businesses to go. Nothing like an established and profitable business to get the stock market to look your way.

High frequency trading: Insider or Outsider?

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Image courtesy of rattigon/FreeDigitalPhotos.net

In the ongoing high-speed trader saga, following Michael Lewis’s book, “Flash Boys: A Wall Street Revolt” where he accuses some traders of rigging the stock market, US Attorney General Eric Holder joined in the fun: “I can confirm that we at the United States Justice Department are investigating this practice to determine whether it violates insider trading laws.” High-frequency/high speed traders use computer algorithms to execute transactions in milliseconds anticipating trades before they happen. Charles Schwab, the famed founder of the discount trading firm, called high-frequency trading a “growing cancer.” So clearly he’s not feeling the love there. Dems have ideas for taxing the practice into oblivion.  Republicans have plans not to pass those ideas. High-frequency traders have plans to continue what they are doing since they believe they provide liquidity to the market.