Where Has All the Farfegnugen Gone?; Amazon’s Getting Crafty With It; Lumber Liquidators Liquidating to DOJ

Have you driven a Ford lately?

Image courtesy of emptyglass/FreeDigitalPhotos.net

Image courtesy of emptyglass/FreeDigitalPhotos.net

Execs at GM must be having a very good day as the recent auto industry-related scandal has nothing to do with them. The same can’t be said of Volkswagen and its U.S. CEO, Michael Horn, who had the dubious distinction of testifying before Congress in front of the House Energy and Commerce Committee’s Oversight and Investigations Subcommittee. His testimony was basically one big long apology over his company’s “emission’s scandal.” But he also said that he truly believes that American workers did not know a thing about it. Which seems kind of weird because would you now consider buying a car from a company whose workers didn’t know what was going on with the cars they presumably work on? Just wondering. But anyways, Horn said Volkwagen would fix the approximate 500,000 affected cars. So if you happen to have one of them, don’t expect a buyback. There’s no time-frame either so don’t hold your breath as the fix could take a couple of years. Horn did say that Volkswagen would take full responsibility and that responsibility could result in an $18 billion fine. And while that seems awfully steep, even for a car company, then consider that the affected cars were emitting pollutants at a rate that was 40 times more than the acceptable U.S. standards. So boo hoo for Volkwagen.

Craft cheese…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Because e-commerce dominance just isn’t enough, Amazon is even going after the little-er guys. This time the target is recent IPO’er, Etsy, who continues its rocky relationship with Wall Street. Today, Amazon unleashed Amazon Handmade a marketplace for artisans to peddle their wares. Translate: no factories allowed. And indeed, that is one of the reasons why it distinguishes itself from Etsy and might prove to be a big lure for those artisans irritated by fellow crafters who choose to outsource their manufacturing. Amazon thinks it has way more to offer the fiscally-driven yet crafty-inspired peddler than Etsy has. A much much bigger customer base, free phone and email support and a host of other tools are just some of the benefits of being an Amazon Handmade seller. But, first you have to qualify. Again: No factories! No major manufacturing. Check out Amazon’s site If you’re really curious to see if you’ve got what it takes (or what it doesn’t) to sell your crafty goods. But know this, fearless artisan, Amazon takes a 12% cut and, starting August 2016, a $40 monthly fee if you’re industrious enough to sell more than 40 items a month. If all that doesn’t scare you away, then come join the approximately 5,000 sellers, in 60 countries, who have already begun hawking their more than 80,000 items.

Unsettling…

Image courtesy of suphakit73/FreeDigitalPhotos.net

Image courtesy of suphakit73/FreeDigitalPhotos.net

Lumber Liquidators has finally reached a $10 million settlement with the Department of Justice. Except, this settlement has nothing to do with the still ongoing investigations into Lumber Liquidators’ formaldehyde-laced laminate flooring scandal. That’s a whole other fairly recent mess. This settlement is from allegations stemming from 2013 where Lumber Liquidators was accused of violating the Lacey Act. This U.S. conservation law basically protects plants, fish and wildlife and forbids companies, corporations etc. from hogging more than their share of mother nature’s not-so-abundant resources. Lumber Liquidators did just that when it was busted importing more than the permitted amount of timber from foreign countries. As part of the settlement, Lumber Liquidators is on probation for 5 years and must make generous donations to conservation charities. If the company violates the terms of its probation, then its toast. Heck, the company’s already is toast. However, shares of the company went up a smidge today on the news of the settlement. Of course that increase does nothing to mask the fact that the stock is down 75% over the last year

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Nothing to Chirp About at Twitter; Lumber Liquidators Earnings Nearly Hit the Floor; Ben Bernanke’s Impressive Resume

Chirp…

Image courtesy of Mr-Vector7/FreeDigitalPhotos.net

Image courtesy of Mr-Vector7/FreeDigitalPhotos.net

What’s worse? Having your earnings leaked prematurely or the fact that those earnings were so bad? Hmmm. This one’s a toss up. Either way, Twitter’s bummed on all ends. Earnings reports are released only after the closing bell or right before the opening bell giving traders/investors/wannabes a chance to study the numbers and figure out how to proceed. Twitter’s “inadvertently” pre-maturely released earnings, which occurred on its very own platform, sent the stock south 20% and even caused trading of the stock to be suspended for a period. But that was only Twitter’s second worst day ever.  As for the horrible numbers, sales are actually up 74% over the previous year but the problem – and it’s a big one – is that Twitter’s growth rate is not up. User growth grew 18% to 302 million active users. But last month it grew 20%. Those figures are only supposed to go up. Never down. And herein lies one of social media company’s many many problems. Another is that CEO Dick Costolo’s credibility has come under fire and here’s why: It seems he didn’t see the writing on the wall, namely that all signs were pointing to a major slowdown.

Floor-ed…

Image courtesy of Serge Bertasius Photography/FreeDigitalPotos.net

Image courtesy of Serge Bertasius Photography/FreeDigitalPotos.net

Things at Lumber Liquidators keep getting worse as the company reported its first quarter earnings and to the surprise of no one, the company took a loss of $7.9 million and 29 cents per share on $260 million in revenue. I have to wonder if analysts didn’t hear about the scathing “60 Minutes” report that accused the company of selling formaldehyde-laced flooring because they expected the company to at least gain 15 cents a share. To give you an idea of just how bad those earnings really are, last year at this time the company took in a profit of $13.7 million and 49 cents a share. In case you were wondering how the company even made any money this quarter, most of it comes from January and February, before the damning piece even ran on March 1. Much of those losses are because of all those legal and professional fees the company has been shelling out to defend itself. But it’s safe to assume that people also are probably not buying from a company that would allow toxins to make their way into the company’s products. And the trouble just keeps coming. Lumber Liquidators says it is aware of the over 100 pending class action lawsuits against it. Even the Department of Justice has entered the fray seeking criminal charges against the company under the Lacey Act. Oh and one more thing, its CFO, Daniel Terrell, needs to brush up his resume as he’s leaving the company.

Ben…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Ben Bernanke’s LinkedIn profile seems to be filling up nicely. First he took a position as a distinguished fellow in residence at the Brookings Institution. Then he picked up a consulting gig at hedge fund, Citadel. Now, the former Federal Reserve Chairman has some new West Coast digs, thanks to PIMCO, who just announced that Mr. Bernanke would be joining its ranks as a senior adviser. PIMCO could definitely use Mr. Bernanke’s guidance right about now as investors have pulled about $100 billion from the fund following the departures of Co-Chief-Investment Officers, Bill Gross and Mohamed El-Erians last year. The former fed chairman will still have plenty of cash to play with as PIMCO handles about $1.59 trillion and runs the world’s biggest mutual fund. He’ll even get to “engage” with clients, which should help win back some of that $100 billion and assuage the fears of those finicky investors.