Hasbro’s Singing the Toys “R” Us Blues; It’s Good to Be Amazon; Target Goes on Holiday Offense With New Shopping Strategies

Don’t toy with me…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Hasbro’s getting burned and it’s blaming Toys “R” Us. The toy company gave some abysmal holiday forecasts which sent shares down about 8%. Toys “R” Us owes creditors some $5 billion.  Among them is Hasbro which was left with a $60 million hole now that all those toys from the company aren’t headed to the toy store’s shelves.  It’s worth noting, however, that Hasbro only sold about 9% of its total inventory through Toys “R” Us.  But it isn’t just Hasbro that’s feeling the heat. Shares of Mattel also took a 4% hit today since a Toys “R” Us bankruptcy affects the entire toy industry, in some instances worse than others.  Incidentally, Hasbro’s third quarter profit went up 3% to $267 million and $2.09 per share, while its quaterly revenue increased 7% to $1.79 billion over the same time last year. Expectations were for $1.78 billion in revenue with just $1.94 per share. Hasbro has “The Last Jedi” to thank for some of this quarter’s gains, along with perennial favorites Monoply and My Little Pony.

Carrot dangling…

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Image courtesy of KEKO64/FreeDigitalPhotos.net

Dignity be damned as 238 cities found themselves swooning and doing whatever they could to lure Amazon’s $5 billion HQ2 project to their part of the country. NYC Mayor Bill DeBlasio had major New York City landmarks lit up in “Amazon orange” while Newark, New Jersey shrewdly offered the e-commerce giant $7 billion in tax breaks. Because after all, who more so than Amazon should be entitled to receive a $7 billion tax break? But hey, who can blame any of these cities or their savvy leaders for trying to woo Amazon to their neck of the woods. Just ask Seattle, a city that experienced a $38 billion boost to its economy because each dollar that Amazon invested into the city between 2010 to 2016 resulted in an additional $1.40 for the city. Not sure who figured out that formula but its easy to see why everyone wants in on that action. And while Newark’s offer must be awfully enticing, word on the street is that the current front runners are Boston, Chicago, Atlanta and Detroit.

Target acquired…

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Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Target’s got some new tricks up its sleeve this holiday season and is going with the “less is more approach.” What there will be less of are promotions. At least the constant bombardment of them. Apparently that tactic didn’t work so well for the retailer last year and only resulted in a 1.3% decline for the company.  But there’s no need to freak out that Target wont be offering any special deals. It’s just going for a more streamlined approach. Instead of constant deals and promotions, it plans to offer special weekend deals while remaining focused on pricing its merchandise correctly and competitively from the start. The company’s 1,800 stores will also offer a much bigger variety of gifts priced under $15. Expect to see around 1,700 offerings in that category. Perennial favorite, “free shipping  with no minimum” will once again resurface from November 1 – December 23 because, hey,  who doesn’t like free shipping. But perhaps Target’s most exciting new feature is the one dubbed “Gift Now.” Shoppers buy gifts and their (un)lucky recipients open them virtually via email. If  the recipient likes the gift, they enter their shipping address in order to receive the item. If not, they get to pick out something else for the same value. If that’s not novel, I don’t know what is.

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GM Invests in US. Trump Takes All the Credit (Again); Tiffany & Co. Credits Trump for Quarterly Loss; No Trump-ing Mattel with New CEO

Pressure cooker…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

GM just announced that it is throwing a whopping $7 billion into several of its U.S. plants in order to bring back thousands of jobs, in addition to the 56,000 hourly workers it already employs here. Naturally, Trump is taking credit for these actions and it’s kind of weird that he would since GM said these plans were already in place for months. Who you choose to believe doesn’t matter because Trump already tweeted about it:”With all of the jobs I am bringing back into the U.S. (even before taking office), with all of the new auto plants coming back…I believe the people are seeing ‘big stuff.'” Nothing says POTUS quite like the term, “big stuff.” But just so you know, GM didn’t exactly deny that Trump didn’t have something to do with its newly announced plans either. Although, General Motors did mention something to the effect of “this was good timing.” Feel free to read into that however you want since it’s no secret that Trump was gunning for GM over its manufacturing of the Chevy Cruze south of the border, and then bringing it back into the country tax-free. Incidentally, GM CEO Mary Barra is part of a panel of CEOs who are advising Trump on economic policy. Also incidentally, Mary Barra is expected to attend the President-elect’s inauguration.

Good fences?

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Image courtesy of jscreationzs/FreeDigitalPhotos.net

Guess who else is not happy with Trump? Okay, I guess that list is kind of long so I’ll just tell you: Tiffany & Co. The jeweler, which happens to own a flagship store that is adjoined to Trump Tower, reported a 14% drop in sales at that very store on Fifth Avenue. To be fair, the iconic jeweler was expecting a drop thanks to Trump. Only this one was worse than expected, citing “post-election disruptions.” Roughly translated, that means that in addition to the many many anti-Trump protesters, potential shoppers also had to contend with heightened security, courtesy of the secret service and NYPD, not to mention journalists and hoards of tourists eager to see if they could catch a glimpse of the President-elect. So just how bad were Tiffany & Co.’s sales? Well, in the US, those numbers only came in at $483 million, with comparable store sales down 4%.  And the luxury retailer isn’t very hopeful about those numbers going up in 2017.  But because Trump isn’t everywhere, global sales of Tiffany & Co. came in at $966 million, which was just a tad bit higher than last year at this time.

Don’t toy with her…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Barbie is getting a new boss as Mattel gears up for its second CEO since 2015. Enter Margaret “Margo” Georgiadis, whose last gig, for the past six years, was over at Google. She was President of Google Americas and oversaw commercial operations and ad sales for the U.S., Canada and Latin America. So, it’s safe to say she’s (over?) qualified for the job. She is among just 27 top ranking female executives at Fortune 500 companies. Georgiadis, who also worked at Groupon and Discover Financial Services, begins her role at Mattel on February 8, where she will also sit on the board of the company. She’ll be tasked with coming up with new, and hopefully ingenious ways to boost sales in a climate that has kids hypnotized by mobile devices. Unfortunately, these nefarious electronic gadgets have been putting a dent into the sales of not only Mattel, but Hasbro and Lego as well. However,  given that Georgiadis has a reputation for successfully building brands, boosting sales of Fisher-Price, Hot Wheels and the American Girl line should be easy as pie. Well, hopefully.

Trump Tweets Out Boeing’s Air Force One; Lego’s Brick-By-Brick Expansion Plans; SeaWorld Sees Layoffs

Boeing going gone…

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Image courtesy of vectorolie/FreeDigitalPhotos.net

President-elect Donald Trump was on Twitter. Again. This time he was telling Boeing to cancel the order for the new Air Force One that’s in the works.  In his usual eloquent manner he said that the cost to build the plane “is totally out of control.”  And just what exactly does “out of control” look like when you’re building a fleet of aircraft for the Commander-In-Chief? Well, it depends on who you ask but Trump has that figure pegged at $4 billion, though it’s not entirely clear where he got it. Another report has the Air Force budgeting the new planes at about $1.6 billion. However, it’s expected that the fleet of planes will cost $102 million this fiscal year, and another $3 billion over the next five years. So maybe Trump’s got his ducks in a row on this one. His tweets went on to say: “I think Boeing is doing a little bit of a number. We want Boeing to make a lot of money, but not that much money.” He probably would prefer if Boeing weren’t making that money off taxpayers’ backs. The Pentagon wants to replace the current fleet as it will have reached its 30 year service life in 2017. It has been around since 1990, has flown over one million miles and, in all fairness, could use  more than few upgrades – whether Trump’s on board or not. Which he won’t be because the aircraft is not scheduled to be ready for another ten years or so. Naturally, shares of Boeing fell on the news of Trump’s sentiments. In the meantime, 56% of Americans think Donald Trump uses Twitter way too much. Perhaps the time has come for his cabinet members and advisers to take away his phone.

Lego to stand on…

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Image courtesy of Idea go/FreeDigitalPhotos.net

Lego CEO Jorgen Vig Knudstorp is stepping down from his position and that’s actually good news. Knudstorp is leaving his post in order to move on to greener pastures as Chairman of  the Lego Brand Group. The toy company is on a mission to restructure itself to keep up with its growth momentum. By creating the Lego Brand Group, the company plans to explore new business ventures, opportunities and ideas that will help expand the brand in new, exciting and highly profitable ways. For the first half of the year the company posted an unwelcome surprise drop in profit of $499 million though its revenue still went up. The company blamed Americans, or rather, the fact that sales in the United States were flat. But, that’s probably the same thing. In any case, as part of his new gig, Knudstorp will be overseeing the family’s 75% stake in the company which is currently run by fourth generation Lego owner Thomas Kirk Kristiansen. Chief Operations Officer Bali Padda will take over for Knudstorp, officially becoming the first non-Dane to hold the post. The privately held company is headquartered in Denmark and employs over 18,000 people. Knudstorp, who said he plans to stay at Lego for the rest of his career, joined the company back in 2001, when the company was losing about $1 million a day. Lego just couldn’t compete with an exponentially-increasing digital toy industry. But it turns out it didn’t need to when it made Knudstorp CEO in 2004. Under his leadership, he made changes, booted people, brought in new folks and saw Lego’s revenue jump fivefold. Last year the company fiscally surpassed both Mattel and Hasbro, even with all their Barbie/ My Little Pony/Hot Wheels/electronic toys, to become the number one toy company in the world. No small feat considering that unlike Mattel and Hasbro, Lego pretty much makes just one product with assorted variations: a plastic brick.

Under water?

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Image courtesy of TAW4/FreeDigitalPhotos.net

With shrinking attendance, decreasing revenue and dwindling profits, SeaWorld announced plans to say a not so warm goodbye to 320 of its employees, both salaried and hourly. It was only back in 2014 that SeaWorld said goodbye to another unlucky 300 employees. The  soon-to-be-former employees will be receiving “enhanced severance benefits” which is fancy talk for some cash and maybe health insurance to tide them over for a little while. SeaWorld has even offered to help them find work elsewhere. How moving. The entertainment company is on a mission to restructure itself in any way possible to keep it from losing any more money than it already has. Of course, cost-cutting always factors in, along with examining how best to improve and streamline the rest of the business. Back in March SeaWorld made the decision to stop breeding Orca whales and also scrapped the shows in which the whales starred. SeaWorld is also blaming Disney and Universal for their disappointing digits, unable to woo away visitors from their PETA-friendlier attractions. Also, there seemed to be a drop in Brazilian visitors, presumably because they remained in Brazil for the Olympics, one might suspect, which apparently affected SeaWorld’s earnings.  Who knew SeaWorld relies on a Brazilian contingent to patronize its parks to help churn out a buck or two?

Oprah’s Next Favorite Thing; The Force Does Not Awaken Hasbro’s “Girl” Toys; Amazon/New York Times Smackdown

Everything she touches turns to green…

Image courtesy of Mister GC/FreeDigitalPhotos.net

Image courtesy of Mister GC/FreeDigitalPhotos.net

Media titan-ess and Forbes’ 211th richest American, Oprah Winfrey, just added to her portfolio by scooping up a 10% stake in Weight Watchers. At $6.79 a pop, Winfrey snagged 6.4 million shares for a $43.2 million purchase.”I believe in the program so much I decided to invest in the company and partner in its evolution.” Awww. Apparently, her own personal experience with the company’s program led her to some very desirable results and now investors are hoping to see if the “Oprah Effect” can help turn around the struggling diet company, which has been in a perpetual slump for the last few years. So far it seems to be working as the stock soared 92% on the news of Oprah Winfrey’s involvement with a seat on the board as well as becoming an adviser to the company. Maybe that surge will help offset the 92% loss the shares have suffered since 2011, when the stock hit its peak of $85.76. The company had been losing ground to the tech age as dieting has been steadily going digital. Now Weight Watchers has begun to shift its program to focus on living a healthier lifestyle as opposed to just dieting and is jumping on the digital bandwagon by offering tech services to attract new customers and keep existing ones, Oprah and all.

May the force be with your profits…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The force is apparently with Hasbro as the toy company’s earnings are up 15% mostly thanks to licensing deals with Jurassic World and Star Wars. The toymaker was able to strike down analysts forecasts with profits coming in at $207.6 million and a $1.64 per share when predictions were for $1.52 per share. Hasbro easily beat last year’s same-period digits of $180.5 million and $1.40 per share. But the dark force still looms large for the toymaker and not just from the $132 million that was affected because of the strong U.S. dollar. Shares from its girl division fell 28% for the fourth straight quarter. Is it even P.C. for Hasbro to have a boys and girls category? Just wondering.  But the young consumers, to whom these girl toys are presumably marketed, have been shifting their preferences towards gadgets and tablets instead of blond hair and magic ponies. Which is too bad since that female-focused category accounts for 50% of Hasbro’s total revenues and remained at a very flat $.147 billion.

Right back at ya!

Image courtesy of digital art/FreeDigitalPhotos.net

Image courtesy of digital art/FreeDigitalPhotos.net

I’m guessing there will be no Amazon swag for the New York Times in the near (and distant) future. Still reeling from a scathing New York Times story from August, Amazon has finally fired back at the newspaper by calling into question its reporting capabilities.  Not that Amazon is the first entity to have to do this with the New York Times, but I digress. The story, published back in August, painted a very unattractive picture of the employee atmosphere at the e-commerce giant. Former White House Spokesman Jay Carney, who now serves as Amazon’s Senior Vice President for Global Corporate Affairs, strongly responded to the “newspaper of record” for blog Medium. Carney said it took two months to formulate its response to the New York Times because the tech giant was “hoping they might take action to correct the record. They haven’t, which is why we decided to write about it ourselves.” Among some of the pearls was the bit about former Amazon employee Bo Olsen who, when interviewed by the NYT, told reporters Jodi Kantor and David Streitfeld, that he saw many many employees crying at their desks.  Apparently he was making these observations while defrauding vendors and falsifying business records and subsequently resigned following an investigation. So much for the Pulitzer on that story.

Greek Banks Open for Business Again. Sort of.; Avengers: Age of Ultron Beats the Street; Morgan Stanley Profit Beat

Bank on it…

Image courtesy of patpitchaya/FreeDigitalPhotos.net

Image courtesy of patpitchaya/FreeDigitalPhotos.net

After one long, fiscally painful week where Greek Prime Minister Alexis Tsipras begrudgingly agreed to terms for a bailout with Greece’s creditors, the country’s banks are finally back up and running. It only took three weeks to get to this point. But at least now both the IMF and ECB can look forward to getting some of their money back and Greece gets to stay in the euro. It’s a win-win. Sort of. And while here in the states, running to the bank can be nothing short of a tedious errand, in Greece, that one act is now reason enough to celebrate. Of course with the sales taxes in Greece increasing so dramatically  – from 13% to 23% –  celebrating such an event might become prohibitively expensive. But like I said, at least Greece gets to stay in the euro. As these austerity measures take effect, Greeks will now be able to make deposits, access their safety deposit boxes and above all else, make withdrawals. Only now, they aren’t limited to daily withdrawals of $65 per day anymore. Instead, Greeks can actually withdraw a whopping max of 420 euros ($455 bucks)  a week. As for transfers abroad…those are gonna have to wait.

Dinosaurs, Avengers and Star Wars – oh my!

Image courtesy of  Dr Joseph Valks/FreeDigitalPhotos.net

Image courtesy of Dr Joseph Valks/FreeDigitalPhotos.net

It’s been a super-hero kind of a quarter for Hasbro whose earnings had a major boost from Avengers: Age of Ultron, Jurassic World and perennial classic, Star Wars. The toy company actually posted a smaller than expected decline. Yes, you read that right. But what’s really weird – in a good way – is that the toys typically favored by boys were the big winners/earners this quarter. Usually, its the female driven categories that hog the earnings glory. Only this time, that category that includes Nerf Rebelle and My Little Pony took a 22% hit in net revenue. But, the company’s revenue didn’t go down as much as analysts thought it would. And that’s why everyone seems to be so stoked about the $779 million in revenue Hasbro did bank. That’s a welcome difference from the estimated $773 million Hasbro was expected to take in. And because it’s the cool fiscal thing to do these days, the strong dollar/foreign exchange rates took some flack for the drop in the toy company’s revenue. Otherwise, profit was a cool $41 million adding 33 cents per share when Wall Street only expected a paltry 29 cents per share.

They got the beat…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Morgan Stanley’s profit fell by 8.5% over last year’s results. But no one’s too upset. I mean, don’t get me wrong. Nobody’s whipping out the champagne (that I know of) but the bank still managed to score some impressive gains in all three of its main businesses so hope isn’t exactly lost. With a little help from brokerage fees and increased trading, Morgan Stanley banked a $1.8 billion profit adding 79 cents per share – after a tax benefit. Analysts only expected the bank to earn 74 cents per share. However, not be a downer but last year at this time the company scored a profit of $1.9 billion with 92 cents per share. However,  Morgan Stanley does get bragging rights – for this quarter anyway – as it had the biggest revenue increase out of all six major U.S. banks,  pulling down a whopping $9.7 billion. Last year at this time that figure was closer to $8.6 billion.The question is, can they keep pulling that trick off?

GM Earnings Not So Revved Up; Wall Street Goes Dunkin’ DoNUTS ; Its Girl Scout Cookie Time – All the Time

Unstoppable?

Image courtesy of olovedog/FreeDigitalPhotos.net

Image courtesy of olovedog/FreeDigitalPhotos.net

General Motors came out with its quarterly earnings and you’d hardly know all the fiscal trouble it was dealing with just a year ago. Except for the fact that it reported a glaring $1.7 billion drop in revenue, not to mention all those charges to compensate victims of the recall debacle. The auto company earned $945 million and 86 cents a share this quarter when a year ago GM was staring down the wrong end of a $1.2 billion recall and a paltry profit of just $125 million. GM, incidentally, missed expectations by 11 cents. Try not to get too worked up over that. The automaker did pretty well in the U.S. as fuel prices continued their downward trend sending subliminal messages to consumers that it’s okay to buy all those hunky trucks and SUV’s. But those numbers would have been much higher were it not for a pesky higher tax rate and a strong U.S. dollar. Of course, it wouldn’t be right not to mention Russia and all the fiscal problems it has been causing GM in that part of the world. So there, I mentioned it.

Sweet tooth…

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

Dunkin’ Donuts also released earnings which were positively scrumptious. Well, duh. Have you been in one of their stores lately. I have. This morning, as a matter of fact. And, as usual, I had to wait on a long line. So there. Anybody who patronizes their donuts shops could have told you those donuts were gonna pull off some impressive earnings. So what were those magical numbers, you might be wondering. Dunkin’ Donuts pulled in 40 cents per share, easily topping analysts’ estimates of 35 cents per share. Not bad for a company that sells donuts for a little over a dollar each. As for revenues, well those sugary confections pulled down close to $186 million, once again beating predictions of $180.65 million. Apparently, much of that success was attributed to the wildly caloric and ridiculously tasty croissant donuts.  Dunkin’ Donuts Chief Nigel Travis said the chain managed to pull off these impressive digits despite a nasty winter. But I suspect, in my most humble, unprofessional opinion, that perhaps, those numbers were because of it. Think about it: a hot beverage and a sweet treat. What better way to spend a wintery morning? Well, flying to Hawaii is one way, but I digress. If its earnings weren’t sweet enough for you, then how about the fact that the donut chain also raised its outlook on revenue growth from a previously estimated 5% – 7% to a revised 6% – 8%. Can we say sprinkles on top?

Sweeter tooth…

Image courtesy of  pupunkkop/FreeDigitalPhotos.net

Image courtesy of pupunkkop/FreeDigitalPhotos.net

No need to wait anymore for one of your co-workers to hit you up to buy Girl Scout cookies from their daughters on the same day you start your diet. Now you can sabotage your diet goals all year round as the Girl Scout Organization has announced it will be offering a Do-It-Yourself version, easily accessible from your local Wal-Mart, Target or Toys R Us stores beginning this summer.  In fact, it’s so easy, 8 year olds can do it. By themselves. Literally. The Easy-Bake Oven it is not, as Hasbro has the licensing deal for that one. But this new toy is sure to give Hasbro a run for its money as the Girl Scouts of America teamed up with Wicked Cool Toys to offer the latest way for small children to learn the fine art of capitalism. And baking And just eating cookies. The oven toy will sell for about $60 a pop and and comes with one pack of cookies. But just how this new enterprise will affect the 200 million boxes of cookies sold each year remains to be seen.

Target-ing Pay;

You raise me up…

Image courtesy of nongpimmy/FreeDigitalPhotos.net

Image courtesy of nongpimmy/FreeDigitalPhotos.net

Target’s being a follower and that means only good things for some 350,000 of its employees. The retailer is raising its minimum wage from $8.83 to a whopping $9.00 an hour. Don’t laugh. The federal minimum wage is still only $7.25. Walmart already made that move several weeks back and TJX, which owns TJ Maxx, Marshall’s and Home Goods, is also set to follow suit. So what exactly is the downside of raising the minimum wage and why doesn’t everybody just do it already? Critics of raising the minimum wage feel that sometimes doing so might deter employers from hiring more people if they feel they have to shell out more money to do so. So yeah, it’s great if employers are paying more, just as long as you are able to get a job with them, to begin with.  Speaking of not having jobs, this minimum wage announcement comes on the heels of Target’s earlier announcement that it’s cutting about 3,000 jobs. Target’s going to need a few bucks to pay off that $10 million settlement over its 2013 security breach where 40 million cards were compromised and the personal financial information of well over a 110 million people was accessed. Victims could get up to $10,000 in damages but Target doesn’t plan on making it easy for them to collect. Alleged victims will have to bear the burden of proof and submit adequate documentation on losses they incurred.

Monopolize!

Image courtesy of James Barker/FreeDigitalPhotos.net

Image courtesy of James Barker/FreeDigitalPhotos.net

A big happy birthday shout out goes to Monopoly, the iconic board game who turns 80 today.  The game, owned by Hasbro, comes in 47 languages and is available in 114 countries. You could pick up the game for a whole $2, back in 1935, when Parker Brothers originally bought it up from Charles Darrow. But its roots go even deeper, back to 1903, when a woman named Elizabeth Magie came up with the original incarnation of the game, which was meant to highlight the unfairness of property ownership. Ironically, Monopoly has become the world’s best-selling board game. 275 million copies of the game have sold, with more than $30 billion worth of Monopoly money printed each year, and each game coming with $20,580. Rumor has it that Mr. Monopoly, himself, a.k.a Rich Uncle Pennybags is based on none other than J.P. Morgan.  To mark the momentous occasion, Monopoly has come out with its latest version dubbed “Here and Now.” Cities all over the world voted for their picks to make it onto newest board. In case you were wondering, Illinois Avenue, B&O Railroad and the “GO” space are the three most frequently “landed-on” spaces.  Now if only Atlantic City, whose street names can be found on Monopoly board games, can channel some of Monopoly’s success for itself, it might be able to pull itself up from all its recent economic struggles.

GDY mate…

Image courtesy of cooldesign/FreeDigitalPhotos.net

Image courtesy of cooldesign/FreeDigitalPhotos.net

Chances are, if you have a domain name, you went through GoDaddy.com to buy it. The company, which also does web-hosting, wants to make its Wall Street IPO and is looking to raise $418 million with a valuation around $2.87 billion. Just three years ago GoDaddy.com was picked up by KKR and Silver Lake Management and now, here they are looking to offer up 22 million shares for about $17 – $19 a pop.  The company, which currently handles about 20% of the world’s domain names, has approximately 12.7 million customers and took in $1.39 billion for 2014. That was a hefty a 23% increase over 2013. Look for its ticker symbol one day: “GDY.” Catchy, huh?