The List of all Lists; Kate Spade’s Numbers Need to Get Accessorized; GoPro Goes Big With Latest Acquisitions

A-listers…

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Forbes unleashed its latest list of the world’s richest people just in time to make you feel really bad about yourself. 1,810 billionaires made the list and their combined net worth is a mind-blowing $6.48 trillion. But don’t be too impressed since that figure is actually $580 billion less than it was last year. Hey, times are tough. There are 16 less billionaires this year and 540 of them are living large in the United States. The gender gap managed to rear its ugly face on this list as only 190 women made the cut, with 65 here in the United States. Unfortunately that figure was down from 197 last year. Heiress and L’Oreal businesswoman Lilliane Bettencourt is the highest ranked woman, taking the 11th spot with a net worth of $36.1 billion. For the third year in a row, Bill Gates is sitting pretty at the top with a net worth of $75 billion. However, to be fair, he is $4.2 billion poorer than he was last year. My heart aches for him, really. Like Zara clothing? Apparently most people do since its owner, Amancio Ortega, ranks in the number two spot. Warren Buffett, no surprise, takes third while Carlos Slim snags the fourth spot. Facebook’s 31 year old Mark Zuckerberg took the sixth spot with his $44.6 billion and becomes the youngest billionaire in the top ten. Lucky him. And whether you love him or hate him, Donald Trump did make the list with an estimated net worth of $4.5 billion.

Accessorized…

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Kate Spade almost fell out of fashion on Wall Street today when the company reported that its fourth quarter sales fell short, coming in at $62 million and adding 32 cents per share. The company missed estimates by a penny and posted a 51% decline from last year  when the company saw $126 million with 49 cents added per share.  At least its revenue was up 7.6% to $429 million, although analysts did expect that number to ring in closer to $442 million. Oh well. Maybe next quarter. Yet, Kate Spade shares rose as high as 6.7% today. And why shouldn’t they? After all, the swaggy design house is expanding its merchandise into home decor and children’s apparel, prospects that have Wall Street tongues wagging, if ever so slightly. The company has had quite the quirky fiscal ride as it was down a staggering 42% for the last twelve months yet managed to creep up 12% since the beginning of the year. That was happening even while the almighty S&P was going down 5.5%.  Go figure.

Pro-active…

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What to do when your company takes a vicious downward spiral killing 70% of its value? You go shopping, of course. And that’s exactly what GoPro Inc. CEO Nicholas Woodman did. The action-camera exec announced he is plunking down $105 million to buy not one, but two video editing applications, in hopes of beefing up one of the company’s bigger problem areas.  Wall Street responded kindly by sending shares up and let’s face it, GoPro shares need all the help they can get. GoPro’s acquisitions are Replay and Splice, applications that will allow users the ability to easily cut and publish footage on their mobile phones. Given that Woodman himself called he GoPro editing experience an “inconvenience,” these acquisitions seem like a prudent move. Too bad, however, that this move comes on the heels of GoPro’s decision last month to cut 7% of its workforce after weak holiday sales and slashing the price of its newest camera by 50%. That’s what happens when you’re staring into a crowded market of action-cameras. But, taking a page from Warren Buffett, Woodman is optimistic that 2016 will be a record year for GoPro. Let’s hope so since 2015 saw GoPro’s stock hit an all-time low.

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No-GoPro on Earnings; Could a Pfizer/Allergan Merger Become the Next Big Thing?; Wal-Mart Offers NO Free Shipping (limitations apply)

Worst. Day. Ever….

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Image courtesy of jesadaphorn/FreeDigitalPhotos.net

GoPro released its earnings yesterday only to tell us that it did not nail them. This came as a surprise to…no one.  Wall Street echoed its disappointment by sending shares down. Very down. So down, in fact, that the stock is hovering too close to its IPO price of $24 from back in 2014. GoPro miraculously managed to score $400 million in revenue, adding 25 cents per share. Too bad predictions called for almost $434 million and 29 cents per share. Meanwhile, the stock is down 67% for the year and the company is looking to buy back company shares, hoping to increase their value. While GoPro saw second quarter sales kick up by 72%, third quarter sales only increased by 43%. And the picture only gets grimmer as the company actually thinks sales will shrink during the ever-fiscally critical holiday season.  Part of GoPro’s problem is that it can’t seem to figure out how to transform itself from a product for a niche market to a product that spews mass appeal. Then we turn to GoPro’s Hero4Session. Besides the fact that the company initially charged too much for the product, GoPro also insists that the marketing budget for the already too-high priced product wasn’t large enough. Analysts aren’t too optimistic that they are gong to see much, if any, growth in GoPro’s camera unit in 2017. However, they are forecasting $500 million worth of revenue for GoPro’s other products. Go figure.

Erin Go Bragh…

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Image courtesy of Pansa/FreeDigitalPhotos.net

Today’s latest tax inversion plans are brought to us by Pfizer and Allergan Plc who are in “friendly talks” to create the world’s largest drug maker.  While no actual agreement has been reached, the deal would have Pfizer heading towards Ireland where corporate tax laws are far more favorable there than they are here. Can’t you just smell the politics that are about to invade this deal? Tax inversions happen when huge companies set up shop overseas in countries where they don’t get as brutally taxed as they do here. For instance, while Pfizer has the pleasure of shelling out a 25% tax rate to Uncle Sam, Ireland-based Allergan only has to deal with a 15% tax rate. The prohibitive tax rate can put many U.S. companies at an unfair advantage, they argue. Democrats think these companies should just suck it up and stay put. They also think drug companies should simply slash their high prices. However, these drug companies say they can’t do that with such high tax rates imposed. Republicans want those tax laws changed to make them more favorable for these big companies so that they’ll stay put because they want to. Not because they are being forced to. If any deal goes through, it will likely be the biggest deal. Ever. Estimates for Pfizer to buy Allergan range from about $113 billion to $157 billion. But isn’t it worth every cent if it means adding everybody’s favorite aesthetic filler into your drug fold?

No such thing as ‘free shipping?’

Image courtesy of SundayMorning/FreeDigitalPhotos.net

Image courtesy of SundayMorning/FreeDigitalPhotos.net

If you can’t beat ’em…well do something they can’t do.  And that’s exactly why Wal-Mart is scrapping free shipping this holiday season on items that are less than $50. The idea is to instead offer free shipping – for in-store pick up. After all, there are approximately 4,600 Wal-Mart stores from which to choose. Besides, Wal-Mart’s hoping that while you’re picking up an ordered item, you’ll impulsively pick up some other items.  And companies love impulse shoppers.  To entice you to use this method, Wal-Mart is even allowing you to check-in at the store with your smart phone for expedited service. Wal-Mart’s hoping that this new shipping policy will help its profit margins, which have taken a bit of a hit, in part, because of shipping costs. And with 210 million consumers expected to use Wal-Mart’s mobile app, the giant retailer is banking that in-store pick-up will reverse those hits.

Volkswagen Puts the Brakes on Farfegnugen; Will GoPro Become a No Go?; Mickey’s Magical New Venture

Auf wiedersehen…

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Image courtesy of artur84/FreeDigitalPhotos.net

Volkwagen’s stock took a big 20% hit today over a not-so-little emissions scandal that has investors screaming “Nein!” It seems that the world’s largest automaker – at least for the first six months of 2015 – used some software, that managed to mislead regulators into thinking that the German automaker was actually following rules regarding emissions when, in fact, it wasn’t. The Environmental Protection Agency and California are calling the software a “defeat device.” Catchy, huh? So now, Volkwagen wisely decided to stop selling certain diesel vehicles, including Jettas, Beetles, Golfs, Passats and even some Audis, until repairs and amends can be made. Close to 500,000 vehicles are part of this fiasco and account for about 20% of sales in the U.S. The offending vehicles emit nitrogen oxides that have a nasty little way of exacerbating respiratory conditions. If the EPA is lucky, it could fine Volkwagen a whopping $37,500 per vehicle, which is cray cray since I’m pretty sure the cars don’t even cost that much. At that rate, Volkwagen could shell out a ghastly $18 billion. However, in all likelihood, it probably won’t be that much. Of course, those fines don’t include any consumer lawsuits and false marketing accusations. How do you say “up the creek” in German?

Word up…

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Image courtesy of jesadaphorn/FreeDigitalPhotos.net

Looks like Alexander Eule can kiss his free GoPro swag good-bye. The Barron’s writer penned a scathing article on why GoPro is but a “one produce wonder.” Likening the device to the relic we call Blackberry, Eule said that GoPro’s got a ton of competition headed its way and it’ll be a miracle if the company’s stock stays above $25 a share. GoPro, once a Wall Street IPO darling, made an auspicious ticker debut back in June of 2014, jumping over 30% from its initial offering of $24 a pop. Peaking at $98 in October 2014, the stock has been losing wind pretty steadily and is currently hovering today between $32 and $33 a share. While some have wondered if Apple might pick up the company, others have said no way. Why would Apple bother with an acquisition like that when it can just dip into its vast resources and talent and make a similar product. And that is basically what its doing as evidenced by its recent patent report which sent shares of GoPro down 12%. Apple might just be the least of GoPro’s competition worries as Chinese smartphone maker Xiaomi also has a similar device in the works. In case you were wondering, GoPro has not commented on the story. Yet.

For real…

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Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Who better to invest on Virtual Reality technology than one of the finest purveyors of fantasy and make-believe? And so it begins that the Magical Kingdom/mega conglomerate corporation we call Disney is one of several companies throwing money at  VR start-up JauntVR. Hollywood is chomping at the bit to get in on the entertaining aspects of VR action that offers viewers a striking 360° perspective and Disney is hoping its $66 million contribution will see some exciting fiscal return action. Jaunt is hoping to emerge as the go to platform for anybody with a lot of money who uses cameras for a living. Even if they are into GoPro. There’s a whole slew of people and companies who have already used the technology, including Sir Paul McCartney and The North Face. ABC News took the tech to Syria to make a documentary featuring curators attempting to save antiquities in the war-ravaged country. Jaunt expects to use their new found cash to scale up its tech, help with growth and provide a nice welcome addition to its previously raised $100 million. If you’re at all curious what all the fuss is about, see for yourself at http://www.jauntvr.com/content/.

Louisville Slugger is “Finnished”; eBay’s Big Changes; Housing Bummers

Take a swing at this…

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Image courtesy of vectorolie/FreeDigitalPhotos.net

It seems like only yesterday when John Hillerich carved out the iconic wooden baseball bat that would eventually become the Louisville Slugger. Actually it was closer to 1884, but details, my friend. Since then, more then 100 million Louisville Sluggers have been sold and it is the official bat of Major League Baseball. It’s been used by 60% of the ball players including Babe Ruth and Mickey Mantle. Now,  Hillerich & Bradsby descendant, John A. Hillerich, announced he’s selling the company to Wilson, a company owned by a larger Finnish company, called Amer Sports. Not finish – as in , wood finish, mind you. That would make more sense. I wrote Finnish. As in Helsinki. As in, do they even have baseball in Finland? The reported cost for selling off this iconic brand to a company based nowhere near Kentucky, or the United States  for that matter, is about $7o million. Louisville Slugger, alone, raked in $75 million in revenue in a $2.4 billion global baseball and softball industry. The U.S. is responsible for $1.4 billion of that. The move will cost 52 employees their jobs.

Board to tears…

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Image courtesy of iosphere/FreeDigitalPhotos.net

Things are heating up at eBay as it gets set to bid adieu to PayPal later this year. If you recall, investor Carl Icahn wanted eBay and PayPal to do the splits. Venture capitalist Marc Andreessen was not down with that idea at all. Considering that Carl Icahn is the largest shareholder in eBay, he managed to get his way. Thus, Andreessen said buh-bye back in October and a whole new crew is set to run the show. For now we only know a few of them. Devin Wenig will be the new eBay CEO while Dan Schulman takes the CEO spot at PayPal. So where does that leave current eBay CEO John Donahoe? Good question but one to which I have no answer. But the exciting news today is the announcement of two new board members added to eBay. GoPro president and former Skype exec Tony Bates joins the board along with American Red Cross CEO Gail McGovern. McGovern becomes the third woman to join the board, by the way.

Housed…

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Image courtesy of phanlop88/FreeDigitalPhotos.net

As if we don’t have enough aggravation from this never-ending winter and unusually frigid March, leave it to the National Association of Realtors to disappoint us over sales of pre-existing homes. According to the NAR, February was less than spectacular. A lot less. While sales didn’t necessarily go down, they barely went up, by 1.2% to 4.88 million. That was especially annoying because January was no great shakes in terms of sales either. The median price of a home in February was $202,600, up from 2014’s $188,4000. So who’s to blame? Well, weather always plays its mean little part. But Mother Nature wasn’t the only factor toying with our fiscal emotions. Home values are going up way faster than paychecks are. That tends to put a damper on things. Also, there’s a lot less inventory out there. Part of that problem is that so many people owe more on their homes than their homes are actually worth. So, basically, they stand to lose by selling their homes. But luckily, there is still a chance to reverse the fiscal tide. The busiest time of the year for selling homes is just around the corner and with credit rules easing and an improving job market, there’s no need to fret. Yet.

 

Best Buy Earnings Beat; Wal-Mart Gets Smart (Sort of); Home Sweet Pre-Existing Home;

Surprise surprise…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Score one for Best Buy which just posted its third quarter earnings much to the surprise and delight of everyone – well, except for Amazon. But we’ll get to that soon. The electronics retailer pulled in some nice earnings all thanks to higher-definition televisions – a perennial fave. Store sales were up over 2% which means people aren’t necessarily flocking to Amazon after browsing in Best Buy stores. Earnings for the retailer came in at $.32 per share and $107 million. Estimates were pegged at $.25 per share. A year ago Best Buy only raked in $54 million and $.16 per share. Revenue came in at $9.38 billion. Not much of a change from last year, but still, no loss. Naturally, all the good fuss caused shares of the stock to go up as well. How convenient. But to be fair, it was all part of Best Buy CEO Hubert Joly’s master plan to turn around the company. The surprisingly good numbers came at the expense of lots of cost-cutting, including jobs. For his second act, Joly has big plans to partner up with other companies like  “it” company, GoPro.

The jig is up…

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Image courtesy of Arvind Balaraman/FreeDigitalPhotos.net

In the market for a $90 Playstation4? Good luck on that one. Wal-Mart has (finally?) caught up to some crafty internet scammers who industriously, albeit feloniously, created fake ads to present to Wal-Mart employees in order to capitalize on its price-match guarantee. But after updating, clarifying and re-vamping its policy, scammers are going to have a much harder time securing those “deals” especially for all those Xboxes and PS4s. Wal-Mart (very) recently posted this on its website: “We’ve updated our policy to clarify that we will match prices from Wal-Mart.com and 30 major online retailers, but we won’t honor prices from marketplace vendors, third-party sellers, auction sites, or sites requiring memberships.” And at the end of the day, the Store Manager gets the final word. Happy Holidays!

House party…

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Image courtesy of ddpavumba/FreeDigitalPhotos.net

More good news about the economy. I know you can hardly stand the excitement as the National Association of Realtors announced that existing home sales rose 1.5% in October. While that may seem like a relatively small number its actually huge on so many levels. For one, the 1.5% rise is the fastest pace in over a year. It also means that 5.26 million homes were sold. A big shout out goes to low interest rates. It also  wouldn’t be right if we didn’t mention the merits of a strengthening job market. Because, hey, if you want to buy a house, a job is good thing to have to help pay the mortgage, no? Foreclosures and short sales aka “distressed sales” even dropped to 9% of the total versus the 14% of the total a year ago. Good news for the economy. Not so much for you, that is, if you were in the market for a discounted home that went for 15% below market value. It’s a give and take, my friend. The median price for existing homes is $208,300 which is actually a 5.5% increase over last year’s median price at this time. And wouldn’t you know it, those supremely intelligent analysts predicted a decline instead. Ha. Thinking of something more upscale? Homes that sold for above the magical million dollar mark jumped 16% from a year ago.

GoPro Makes a Gnarly Debut, IKEA Makes a Gnarly Wage Hike and GM Might Have a Not So Gnarly Recall

Would you like some meatballs with that…

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Image courtesy of fotographic1980/FreeDigitalPhotos.net

In case you didn’t know, IKEA is a really industrious company and not just because you furnished your entire first apartment with it without ravaging your bank account. Today the Swedish company announced that it is raising its minimum wage by 17% from $9.17 to 10.76. “It’s driven from our vision of wanting to create a better everyday life for our co-worker.” Well amen to that, IKEA President Rob Olson! But the company also think it’s going to help keep turnover to a minimum and recruit more employees. IKEA is going by the MIT wage calculator that takes into account all sorts of factors and how much it would cost to afford life’s basic necessities. Gosh darn those smarties who did the math! The Gap and Old Navy also have plans to raise their minimum wage as well. The federal minimum wage is $7.25. However, the perennial buzz killers argue that raising the minimum wage is bad because it could lead to lay-offs and a decrease in hiring (cue the chirping crickets).

Wall Street is like totally stoked…

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Image courtesy of M – Pics/FreeDigitalPhotos.net

GoPro made its extreme Wall Street Debut today and it was not a disappointing ride. Founded in 2002 by Nicholas Woodman, the company pulled in close to a $1 billion in 2013. GoPro is all about documenting life’s awesome adventures with a special camera that would shame the one on your phone. No really, it would. Would you actually whip out your iPhone mid-skydive or mid-surfing? Didn’t think so. The camera and all its gnarly accessories make for some fun digital media, of which GoPro, naturally makes it easy to use on a variety of platforms. Valued at close to $3 billion, the company began its day at $24 a share but rose quickly to $30 a share making for a totally rad Wall Street ride.

Oops! It happened again…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

It would almost seem weird to go a week and not hear about another GM recall. Okay so this next one didn’t happen yet. But it’s coming because of a potential defect with airbags on Chevy Cruzes- a major problem and not just because it’s GM’s number two selling vehicle right after the Chevy Silverado.  So far, 120,000 of them have been sold this year. The defect, incidentally is not entirely the fault of GM who uses airbag supplier Takata – a supplier used by several car companies, in fact. Meanwhile, over at the Today Show, Matt Lauer has been taking heat over some questions he posed to GM CEO Mary Barra. He asked her if she got the position because she is a woman and that GM needed to present a softer image considering all its problems in the past year. Then Matt not-so-politely asked if she could even handle the job with all its challenges as well as being a super awesome mom with all the demands of that role. Would he have dared asked such questions to male CEO’s, many wonder? Back over at GM, Barra said the there would be no more firings over the recalls. Isn’t that a relief? Or isn’t it? Hmmm.