Sears Dives Into “Dump Trump” Fray; Allergan Goes From Face to Body-Contouring; Teva Beats Despite Turmoil

To dump Trump or not to dump Trump?

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Sears is the latest company caught up in the great retail debate over its decision to discontinue carrying Trump branded merchandise. It would seem that the merchandise of both President Donald Trump and his daughter, Ivanka, have been dropped from Sears and Kmart stores – which Sears owns. However, while Sears and Kmart have put the kibosh on 31 Trump Home items, there’s still plenty more Trump merchandise available online for sale via third-party vendors. Believe it or not, Sears goes by the numbers, at least the ones attached with a dollar sign, and has been putting great efforts into kicking up its online presence. So if items are profitable, they get to stay. If they are not? Well, you get it. This is in the wake of Nordstrom’s decision last week to ditch Ivanka’s line completely. Rumor has it that sales of her merchandise tanked more than 70% for most of October, compared with the same time period last year, when the would-be president still hadn’t yet managed to offend an almost an entire gender of the electorate. Since the Trump brand has been unpopular these days, plenty of customers have little desire to purchase many of its products.  But make no mistake, if the items in question had been selling, either at Sears or Nordstrom, don’t think for a second that the stores wouldn’t have kept the merchandise on its shelves, no matter what the President said – or tweeted.

Yoga, it ain’t…

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Allergan, the maker of everyone’s favorite wrinkle-fighter, Botox, is going to scoop up Zeltiq Aesthetics Inc. for about $2.5 billion, or about $56.40 per share. That’s more than a 14% premium from Friday’s closing price. Naturally shares of Zeltiq went up, because, hey, who would’t want to join the Botox family, right? But here’s the fun part, in case you have never heard of Zeltiq. The company makes a body-contouring product, called the CoolSculpting system, that will fit in nicely at Allergan. Your face and your butt get contoured and primed all from one company. If there’s a regulatory issue with that, then I don’t care. Zeltiq has already been approved by the U.S. Food and Drug Administration and yes indeed, that kind of makes it more legit. CoolSculpting apparently reduces the appearance of fat by freezing it, however, I’m not sure that it actually gets rid of the junk in the trunk. Instead, it just shapes it into your body, like play-doh. Or something like that. Laugh all you want but there’s nothing funny about the 37% worth of revenue brought in by CoolSculpting systems products, which helped Zeltiq take in a net revenue of $374 million for 2016. Allergan CEO Brent Sanders must be onto something, since the body-contouring market is a whopping $4 billion industry and, according to him, is the fastest growing field in medical aesthetics.

Not the usual generic stuff…

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Not all pharmaceutical companies are having as much fun as Allergan. Last week, shares of Teva pharmaceuticals seemed to be in an ugly state of free fall, and matters didn’t help when its CEO Erez Vigodman suddenly left the company. The official word is that Erez Vigodman’s decision to leave Teva was part of a mutual agreement. At least that’s the story they’re sticking to. But even before that, the company was having fiscal issues in the way of delayed drug launches and major acquisitions that wreaked all sorts of ugly fiscal havoc on the company’s stock price. Then, lo and behold, the company reported an earnings beat this morning and all seems right in the world once again for the company.  Teva took in revenues of $6.5 billion, adding $1.38 per share when estimates were for $6.24 billion and $1.35 per share.  Also from the good news front, the company didn’t even see the need to adjust its forecast for the year, and still expects to score between $23.8 billion to $24.5 billion in revenues and adding between $4.90 to $5.30 to shares.  Interim CEO and President Yitzchak Peterburg took the call and said it was “a critical time for Teva, and we are here to fix what is not working.” Which basically means they are desperately trying to figure out how they can get the company to start pulling down some major cash, ditch  a lot of debt and improve its prospects.  Rumors are swirling that the company will split into two: one to focus on its generic offerings and the other for its branded products. According to some experts, a move like this could solve a ton of problems. Just maybe not all of them. Another possibility is to sell off its branded generic drugs biz in an effort to unload some its major debt. Time will tell.  Because I certainly can’t.

Trump Must Say Buh-bye to DC Namesake Hotel; Amazon’s Latest Tricks Up its Sleeve; The Urge to Merge: Alaska Airlines and Virgin America

Give it up…

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The official word out of Washington DC and, more importantly, the General Services Administration (GSA), is that Donald Trump has to give up his beloved hotel that is housed in the Old Post Office, just a few blocks from the White House. It’s the one that he opened back in September and has been the site for so very many Trump protests. That particular building is especially off limits to the President-elect because it is leased from the Federal government. The GSA, in case you were wondering, manages property owned by the Federal government. So it stands to reason that it has a say in what Donald Trump can and can’t do in this particular situation. Incidentally, Federal law does not exactly prohibit a president’s involvement in private business. However, members of Congress and lower ranked executive branch officials cannot. So weird, huh? As for a president’s assets, those have been typically put into blind trusts in an effort to avoid any appearance of impropriety – which seems logical. The owners of these blind trusts have no knowledge of how the assets are being managed and are typically managed by independent third parties. Donald Trump’s daughter, Ivanka, has apparently been dealing with the GSA to resolve this particular issue. However, her involvement is sort of iffy, according to some, since she is an official member of Trump’s transition team.

Droning on and on…

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Amazon’s unleashing plenty of big news today while Jeff Bezos is kicking up his heels at Trump Tower, trying to make nice with the President-elect. First, the online retailer giant announced its first drone delivery, called Prime Air, which took place December 7 in the U.K. A Fire TV device, along with a bag of popcorn found its way to its buyer just thirteen minutes after the order was made. The drop was made in an area in Cambridge that has been authorized for drone testing. So far, two customers have access to this new delivery method. But in the coming months that number is expected to grow by leaps and bounds. The drones fly no higher than 400 feet, are guided by GPS and can carry up to five pounds of merchandise. But best of all, for Amazon anyway, is that drone delivery of small packages are an excellent way to keep delivery costs really low. How does a dollar a drop sound?  Then, Amazon also announced the launch of its very own live streaming video service available just about everywhere. Except China. That must warm Donald Trump’s heart a little.  In any case, the new service is giving Netflix   – which also has yet to conquer China – some very unwanted competition. By the way, Amazon’s launch was eerily reminiscent of Netflix’s global launch almost a year ago. Just saying. The new service, aptly called Prime Video, would get bundled with your average Amazon Prime subscription. The idea is to get people to sign up for Amazon Prime service and from watching all of Amazon’s amazing (it really is) programming, viewers will then have an insatiable urge to buy even more stuff on Amazon. It’s meant to be a win-win. Just not necessarily for your bank account. In Amazon’s defense, however, the company wants to make sure that you’re getting a lot of value from your annual Prime subscription. I can live with that.

Take wing…

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The Alaska Airlines/Virgin America merger is in effect with the official blessing from the U.S. Justice Department. But to be clear, Alaska Airlines is actually buying Virgin America – which has only been around since 2007 –  for about $2.6 billion. The total cost, after all is said and done, is expected to hit closer to $4 billion.  Alaska Airlines is currently the sixth biggest airline operator in the United States, while Virgin America holds steady at number eight. But once these two babies unite, they’ll become the fifth largest airline in the industry. The top four airlines, however, still control 80% of the country’s domestic market. At least the merger will allow for the new entity to become a major player in the highly competitive West Coast region. Combined, the two airlines have around 40 million customers and have so far this year generated $2.4 billion in revenue.