An Apple a day…
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Dr. Dre must be in a very good mood now that Apple (AAPL) is forking over $3 billion to him and his fellow Beats Electronics co-founder Jimmy Iovine. After weeks of talk and rumor, the deal is official. Some feel that the deal might have happened sooner had Dre not bragged about becoming hip-hop’s first billionaire in a leaked video. Apparently Apple wasn’t down with that move. But hey, better late than never. Apple, however, was definitely down with the way Beats music subscribers paid for the service which they previously received for free. So next time you find yourself in an Apple store with a few hundred dollars lounging around in your pocket, take comfort in the knowledge that you just might be able to purchase some tricked out headphones that last year pulled in over a billion dollars in revenue.
Oh no you didn’t!
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The latest drama to play out in the corporate school yard is brought to you by Amazon and book publisher Hachette. So whose side are you going to take? Well let’s see now. How do you feel about Robert Galbraith aka JK Rowling? And just how eager are you to read that author’s new novel, The Silkworm? If you were thinking about buying the title from Amazon you might want to look elsewhere since it’s a Hachette book. Pre-ordering the title from Amazon isn’t an option (anymore). Amazon and Hachette were trying to negotiate how much to charge for Hachette’s books. Amazon wanted Hachette to reduce its prices. They couldn’t agree. Btw, Hachette pulled in $3 billion in revenue for 2013. Amazon pulled in $75 billion. Gee, I wonder who has the upper hand here?
Jetting off with Michael Kors…
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Michael Kors earnings flew way past Wall Street predictions by almost $100 million, which does little to explain why its stock was going all over the place today. Though investors would argue that they aren’t enthusiastic about its gross margins as the company goes forward. In a corporate conference call the term Jet Set was used. A lot. Apparently “Jet-Set” is way cooler and more cost-benefitting than saying “luxury” or “ultimate” or whatever…No doubt a marketing firm was paid handsomely to come up with this theory. Anyways, the self-proclaimed “jet-set” company pulled in over $900 million in revenue and overall had more than a 50% increase over last year. The company might want to send a thank you note to Europeans who are totally getting behind the Michael Kors label/brand and helped increase revenue there by a very jet-setting, luxurious, ultimate 125%. So I guess that gives it leeway to call itself whatever it wants.
Music to the core…
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In a deal not quite officially announced, Apple (AAPL) is plunking down $3.2 billion for Beats Electronics. Hip-hop mogul Dr. Dre, together with music mogul Jimmy Iovine began the company in 2008. The idea behind the (very)high-end headphones was to replicate the sound of the music you would hear as if you were in the studio while it was being recorded – a very thoughtful idea on oh so many industrious levels. If this deal does in fact go through, it is slated to be one Apple’s biggest acquisitions. Ever. A pair of Beats headphones will set you back anywhere from $170-$450. $10 a month gets you unlimited access to Beats music. Dr. Dre could barely contain his enthusiasm for the deal in a video shot by R&B artist Tyrese Gibson. “First billionaire in hip-hop, right here on the mother-f$%&*#$ west coast.” And while it certainly does put him in a whole new tax bracket, he’s still going have to do a bit better to crack that Forbes 400 list. Oh well. Maybe next year Dre.
Darn you Netflix…
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You were warned this was going to happen. It always does. Netflix is raising their subscription fee to $8.99. That is if you haven’t signed up yet and were planning to. As of today the fee goes up one whole dollar but that dollar is crucial in providing you with all the content you need…and deserve…and want. But if you are already one the prescient 48 million users signed up for the service, you get to sit pretty for a couple of more years. Oh, by the way, have you checked out their new logo? Shhh.Don’t say a word. Apparently Netflix is staying mum on the subject.
A treasure of Treasury stories…
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If you’re nothing like me and are already starting to think about what to get your dad for Father’s Day…well, I got nothing for you really, that is unless you have any interest in purchasing former Treasury Secretary’s Timothy Geithner’s new book, “Stress Test: Reflections on Financial Crises.” It’s a memoir from someone thoroughly familiar with navigating an enormous financial crisis. If you recall, he’s the dude who was at the helm of the worst recession and financial crisis since the Great Depression, bailing out AIG and not bailing out Lehman Brothers. Geithner spent four years at the Treasury before moving onto private equity firm Warburg Pincus LLC. In 2010, he wanted to step down from his post, even telling President Obama to consider Hillary Clinton for the job. Obama declined. Supporters say he helped to stabilize banks and avoid a complete epic financial meltdown. Those less than enthused with his fiscal prowess say he was way more concerned with bailing out big banks and less concerned with their customers who were staring down the black hole of foreclosure. The book comes out Monday.