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

Take a swing at this…

Image courtesy of vectorolie/FreeDigitalPhotos.net

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…

Image courtesy of iosphere/FreeDigitalPhotos.net

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…

Image courtesy of phanlop88/FreeDigitalPhotos.net

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.

 

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Standard & Poor’s Overrated Ratings Settlement; Spirited Numbers for Whiskey and Bourbon; Who Will Radio in on RadioShack?

Poor ratings system…

Image courtesy of suphakit73/FreeDigitalPhotos.net

Image courtesy of suphakit73/FreeDigitalPhotos.net

It’s shaping up to be an expensive week for Standard and Poor’s, the ratings company owned by McGraw Hill Financial Inc. After two years of legal wrangling, where the Department of Justice accused the S&P of defrauding investors, S&P agreed to pay for $1.5 billion in a settlement. According to the lawsuit, S&P made sub-prime mortgages sound way better than they actually were, generously over-rating them during the height of that hard-to-forget financial crisis of 2008. One of the juicy little highlights from the lawsuit, as taken from an excerpt from an instant-messaging exchange between two of its analysts, goes a little something like this: “It could be structured by cows and we would rate it.” So what were they trying to say about our friends in the bovine community? Hmm. While S&P gets to avoid admitting actual wrongdoing, as per the terms of the settlement, it will be shelling out $687.5 million to the DOJ and another $687.5 million to 19 states and the District of Columbia. S&P said the DOJ was only coming down on them because it downgraded the US sovereign debt from AAA all the way down to AA+, but the DOJ says NOT! In a separate lawsuit, S&P  reached a settlement with pension fund, Calpers (California Public Employees Retirement System), also a victim of S&P’s too-generous sub-prime mortgage ratings system.

I’ll drink to that…

Image courtesy of artur84/FreeDigitalPhotos.net

Image courtesy of artur84/FreeDigitalPhotos.net

It’s been a very good year for bourbon and whiskey as exports of these spirited spirits topped the $1 billion mark. Even here in the US, sales for Kentucky bourbon and Tennessee whiskey grew, with revenue for both rising 9.6% to $2.7 billion and 19.4 million cases of the stuff being scooped up. 19.4 million cases? Who are you people drinking all this? But it’s the premium selections that are really hitting it big with drinkers…er, consumers, as revenue in that category is up over 19%. All this while beer seems to be experiencing a decline on the whole by 4% in the last five years, with Budweiser losing 28% for that same time frame, despite those super Superbowl ads. Craft beer, however, tells a different story as that tasty category is experiencing an uptick. Some analysts are even thinking all these increasing numbers come courtesy of millennials, who seem to prefer high-quality spirit versus the stuff their parents enjoy. By the way, it should be duly  – and might I add, fondly – noted, that Kentucky produces 95% of the world’s bourbon supply. Go Kentucky!

Shacked out…

Image courtesy of cool design/FreeDigitalPhotos.net

Image courtesy of cool design/FreeDigitalPhotos.net

Rumors are swirling as to who will emerge and scoop up RadioShack as bankruptcy looms near for the company that was just never able to compete with the behemoth that is e-commerce. The New York Stock Exchange had suspended trading of the 94 year old company on Monday, with shares tanking down to $0.14 a share in after hours trading. So will it be Sprint who decides to take up some of RadioShack’s retail leases? The company has 4,300 stores in the US, alone. Or will Amazon add the chain to its arsenal and increase its brick-and-mortar presence in the world? Word on the street is that Jeff Bezos might do just that as a way to showcase some of the gazillions of products that Amazon has to offer, for the right price, of course.

Is the Banking Industry About to Get Turned on its Fiscal Head?; Lululemon Posts Some Zen Earnings; Noah’s Ark is in Park;

Want to join the “Club?”

Image courtesy of nuchylee/FreeDigitalPhotos.net

Image courtesy of nuchylee/FreeDigitalPhotos.net

It’s time to welcome New York Stock Exchange’s latest IPO darling, Lending Club, trading under the ticker symbol LC (catchy, huh?). The banking industry, however, might not be giving it the warm reception that the rest of Wall Street will be showing it. The Lending Club, whose stock price had been set at $15 per share (and is trading at $23.79 as I write this), sets people up, but not quite like Tinder or match.com. The Lending Club matches borrowers with lenders of money. Founded in 2006 by Renaud Laplanche, Lending Club set out to make borrowing cheaper…and easier, than traditional banks and lending institutions. How very considerate.  Lending Club gets a fee per loan transaction and a  loan transaction can be for as little as $25.00. But with $6 billion in loans, thus far, the loan transactions probably tend to be a bit higher. The company is being watched by the alternative lending industry – and banks, no doubt – because if Lending Club does well – or not, it could indicate success – or failure – for other companies with similar models.

Assume warrior position…

Image courtesy of jesadaphorn/FreeDigitalPhotos.net

Image courtesy of jesadaphorn/FreeDigitalPhotos.net

See-through yoga pants be damned. It seems design flaws and a fallout with Lulelemon Athletica Inc. founder Chip Wilson could not stop the yoga wear maker from kicking some analyst estimate bootie. Profits for the company came in at close to $60.5 million and $0.42 per share. Online sales were up 27%, as well. Analysts had the company pegged for $0.38 per share. Still, it’s hard to overlook the fact that those numbers were down 8.5% from a year ago when the retailer posted $66 million in profits and $0.45 per share. So it must be a good thing then that the company has big plans to outfit men all over the world in its athletic gear. In fact, Lulelemon hears a $1 billion opportunity knocking with that idea. That’s probably why it opened its first men’s store in New York City last month.  Namaste.

Get your raincoats…

Image courtesy of njaj/FreeDigitalPhotos.net

Image courtesy of njaj/FreeDigitalPhotos.net

It seems  state funds have dried up for the Kentuck-based Noah’s Ark Encounter, as the $18 million in tax breaks and government funding was just yanked from the folks who are attempting to bring that famous biblical episode to life. The museum, which will be located  conveniently next to the “Creation Museum,” will boast a 500 foot recreation of the famous wooden ark, taking into account the measurements specified in the book of Genesis. However, the reason for the fund-yanking is the company behind the museum, a non-profit subsidiary of Answers in Genesis, plans on hiring based on religion. Meaning if you’re not religious enough, you need not apply – a veritable problem if you are looking to get state funds for a tourist attraction. Naturally, like any money-centered deal that goes south, legal options are being explored by the Creation Museum group with a billboard campaign in Kentucky and…New York (go figure) to counter criticism. In the meantime you can check out the 700,000 square foot Creation Museum, which has attracted some one million visitors since it opened its pearly gates back in 2007.

Ballmer a Baller? The British Are Coming…To Make Bourbon! Costco Goes Hip But Still Misses a Couple of Cents

Clipped…

Image courtesy of sippakorn/FreeDigitalPhotos.net

Image courtesy of sippakorn/FreeDigitalPhotos.net

Steve Ballmer wants to become an official baller. Well sort of. The former Microsoft CEO just inked a deal to take over the LA Clippers to the tune of $2 billion. He outbid a few groups to earn the position of the team’s newest owner, wresting it from the hands of embattled owner/alleged racist Donald Sterling and his estranged wife, Shelly. It’s a record price paid for an NBA team which was originally purchased by Sterling back in 1981 for a little over $12.5 million. Oprah Winfrey and David Geffen were at one point also considering buying the Clippers but dropped out of the bidding. The league still needs to approve the sale. However, Sterling, who swears he’s not a racist despite the numerous racist comments he made during an audio recording, has plans to make the sale difficult.

Bourbon State….

Image courtesy of artur84/FreeDigitalPhotos.net

Ŷ Image courtesy of artur84/FreeDigitalPhotos.net

The British are coming to Kentucky but I suspect the state will welcome this latest invasion. Diageo, the London-based liquor company whose brands include perennial favorites Johnnie Walker, Smirnoff and Ciroc has plans to build a 300 acre, 1.8 million proof gallon (yeah, I know you like the sound of that) distillery in Shelby County. The $115 million project will create thirty new jobs and lots and lots of bourbon. Fun fact: Bourbon is the fastest growing beverage in the spirits category. How very spirited! Kentucky is a very gracious home to the growing Bourbon industry. Naturally, local government officials will need to provide approval.  I’ll bet a bottle of bourbon that permission will be spiritedly granted.

A cooler, hipper Costco?

Image courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

Image courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

Costco (COST), unfortunately, is not having as good a day as Kentucky. Or Steve Ballmer. Net income for the company was $473 million and revenue climbed over 7% to about $28 billion with a special thanks to higher sales and more membership fees. The warehouse wholesaler to the masses posted earnings of $1.07 per share but that just wasn’t enough for those fancy Wall Street analysts who were hoping for $1.09 per share. Those two cents really put a downer on things. The chain, which currently operates 655 warehouses worldwide, is trying to attract a younger demographic. It’s hoping a partnership with Google (GOOG) offering same day delivery and adding more hipper categories and products will achieve the desired effect. I just hope they crank out some more of their tiramisu cakes, which always seem to be in short supply at my local Costco.

 

KY: Dude Where’s My Hemp? Hailing Uber

Seed project…

Image courtesy of Paul/FreeDigitalPhotos.net

Image courtesy of Paul/FreeDigitalPhotos.net

Kentucky’s state agricultural department has a 250 pound stash of hemp seed that they’re itching to plant for some pilot projects they’ve got planned. The problem is the DEA is keeping it at a UPS facility and is being very uncool about releasing it. A group of Veterans who would like to take up farming would like to utilize these seeds, which makes the fact that the DEA is holding them that much more rude  – and uncool. So state officials are doing what any red-blooded American would do in a situation like this: They are suing. US Attorney General Eric Holder, Customs, the DEA and the Justice Department are the defendants. A hearing is scheduled for today because those seeds really need to be planted by June 1 in time for the hemp growing season. I’d like to see the DEA try this in Colorado.

Pin this…

Image courtesy of MR LIGHTMAN/FreeDigitalPhotos.net

Image courtesy of MR LIGHTMAN/FreeDigitalPhotos.net

Pinterest. You know it. You love it. You must be among its 30,000,000 active monthly users. The social media company just infused with some major cash –  $200 million, in case you were wondering – raising its valuation to $5 billion. If you haven’t noticed (though I’m sure you did) it now has “promoted pins” which means ads in Pinterest speak. And this next one is quite the biggie: Pinterest has apparently overtaken Twitter as the social destination for women. Which might partly explain a bit why Twitter hasn’t been living up to its hype. Some of that new money is going abroad, that is to help spread the Pinterest love all over the world, though it is already in 31 countries.

Headed in new directions….

Image courtesy of Stuart Miles/FreeDigital Photos.net

Image courtesy of Stuart Miles/FreeDigital Photos.net

The Uber app, a ride sharing service that is ticking off the taxi industry, wants to raise several hundred million dollars and get a $10 billion valuation (just like Pinterest – only not). Even though Uber began just five years ago, the company has proven to be a massive success – doubling their reach in just six months – even as it deals with major regulatory problems courtesy of miffed taxi drivers. In fact, some Uber drives are even getting ticketed by police. But it’s going to take a lot more to thwart the app’s efforts as it is used in over 100 cities  – worldwide.  The Financial Times said the app could likely pull in a billion dollars just for 2014. Among Uber’s very prescient backers is Amazon’s very own Jeff Bezos (who seems to have sizable stakes in all the right tech companies). Right now India is their largest market now outside of the US. But as with so many other tech companies lately, people wonder if they are really worth all those billions.