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.

Yahoo’s Got Major Un-security Issues; Big Pharma Slapped With Big Lawsuit; Super Bowl “Ads” Up to Big Bucks

Some heads are gonna roll…

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Today’s massive data breach is brought to us by Yahoo. Again. It’s estimated that a billion users had their personal data breached back in 2013, which is nearly twice as big as the last data breach Yahoo reported just a few months ago that happened in 2014. Now Yahoo has the dubious distinction of being the target of arguably the largest data breach. Ever. Incidentally, it wasn’t even Yahoo that discovered the breach but rather law enforcement officials. Law enforcement handed over files to the internet company that they received from a third party who said the info was stolen. Way to stay on top of things, Yahoo! Virginia Senator Mark Warner is now on a mission to investigate why Yahoo can’t seem to get its cyber-defense act together, while Yahoo is on its own mission to investigate who was responsible for the breach.  The Senator went to the SEC  back in September to ask them to investigate if Yahoo did what it was required to do by informing the public about the breach that occurred in 2014.  Warner would have preferred that Yahoo informed the public about the breach when it first happened – and NOT three years later. Sounds fair. In the meantime, there’s talk about whether Verizon still plans to acquire Yahoo’s core internet business for $4.83 billion. With Yahoo’s stock experiencing its biggest intraday drop in almost a year, that deal might go buh-bye as Verizon reviews “the impact of this new development.”  Or Verizon will just offer Yahoo a lower price to acquire it. Because, apparently it still makes strategic sense to purchase Yahoo even with two massive data breaches under its belt.

Suited up…

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Twenty states are going after big pharma via a massive lawsuit that probably wont be going away anytime soon. Mylan NV,Teva Pharmaceuticals and four other companies that manufacture generic medicines are now staring at the wrong end of a very big lawsuit. This lawsuit, by the way, is completely separate from the investigations being led by the Justice Department and other agencies. The companies are being sued for conspiring to fix drug pricing on two generic drugs: an antibiotic called doxycycline and a drug used to treat diabetes called glyburide. The suit charges that brass at the pharmaceutical companies jacked up the drug prices by setting them and also allocated markets, which they all knew was illegal. They made sure any incriminating correspondence was deleted or simply avoided written communication. When asked for a comment, one of the companies named in the suit, Heritage Pharmaceuticals Inc., conveniently blamed former executives who had since been fired.  Jeffrey Glazer, former CEO of Heritage Pharmaceuticals is actually expected to plead guilty next month. Mylan predictably denied the charges while Teva said it’s still reviewing the complaint. The others remained mum.

Ad-citing news…

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The Super Bowl is still a couple of months away but the advertisers are gearing up for their multi-million dollar thirty second spots come February 5. Rumor has it Fox is charging between $5 million – $5.5 million. GoDaddy, which skipped last year’s Super Bowl ad festivities, is coming back this year, along with Snickers, Skittles and – get this – Avocados from Mexico. Can’t wait to see how Donald Trump tweets about that one.  GoDaddy skipped last year’s festivities, apparently to focus on breaking into more international markets. That mission has presumably been accomplished as the domain services company is now available in 56 markets. Of course, it wouldn’t be the Super Bowl without beer ads and Anheuser Busch has got a whole bunch of spots lined up touting its refreshing assortment. In the meantime, regular advertisers, PepsiCo and FritoLay are sitting out this year. It’ll be the first time in ten years that viewers will not see a Doritos ad during the big game. But don’t get too choked up about Pepsico’s absence. The company will still figure prominently since its Pepsi Zero Sugar is the official sponsor of the half-time show starring Lady Gaga.