Uber of a Mess in California; Starbucks Bids Adieu to La Boulange; Botox Plumps Up With Kythera

This could pose a problem…

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

Things could get very ugly for ride-hailing app Uber, now that the California Labor Commission decided that Uber drivers are actual employees, like taxi drivers and pizza deliverers, and not independent contractors, as Uber sees them. The trouble for Uber began when a woman named Barbara Ann Berwick filed suit for additional compensation and the company denied her request. She took her case to the California courts where she was awarded $4,152. However, that $4,152 could actually end up feeling like billions. The company, which is privately held and has a $40 billion valuation, is appealing the ruling, as it has the potential to set a big bad precedent not just for Uber, but for other ride-sharing apps as well. Because, if Uber is forced to call its one million drivers employees, it will have to start accounting for all the expenses that go with it, like social security, workers comp, etc. and that will likely mean that  not only will Uber’s operating costs go up, but the costs for the riders go up too. By a lot.

Gone gourmet…

Image courtesy of Witthaya Phonsawat/FreeDigitalPhotos.net

Image courtesy of Witthaya Phonsawat/FreeDigitalPhotos.net

It seemed like a good idea at the time, but alas, no dice as Starbucks gets set to shutter all 23 of its La Boulange bakery cafes. Even though Starbucks saw 16% growth in food with a 35% increase from just its breakfast sandwich offerings this past quarter, the gourmet goods apparently just don’t fit in with Starbucks’ long term growth plans. Translation: La Boulange may be bringing in cash now, but Starbucks isn’t convinced that it’s fiscally prudent to keep it around for the long haul. Starbucks bought La Boulange for $100 million back in 2012 because the coffee chain wanted to offer expensive fancy food that you could purchase with your extra fancy mocha drinks. While the cafes are closing, you can still get your La Boulange fancy food fix at regular Starbucks cafes. As for all those La Boulange employees who are about to be sans paycheck? Puhlease, you didn’t think a socially conscious company like Starbucks  would leave them high and dry, did you? (Insert jokes about Starbucks flopped campaign to talk about race here.) Starbucks will be helping those folks find new gainful employment, hopefully at establishments that Starbucks is not looking to unload.

Freeze…

Image courtesy of patpitchaya/FreeDigitalPhotos.net

Image courtesy of patpitchaya/FreeDigitalPhotos.net

Allergan, maker of everybody’s favorite wrinkle freezer, Botox, is buying itself some new plastic surgery fun, picking up biopharmaceutical firm Kythera for $2.1 billion. Allergan is paying 80% of that $2.1 billion in cold hard cash, with the rest paid out in shares of Allergan. And who doesn’t want a few shares of a biopharmaceutical company whose main focus is facial aesthetics? At that price, Kythera is getting about $75 per share, which seems like a lot… because it is – it’s about a 24% premium on Tuesday’s closing stock price. But hey, it’s totally worth it since Kythera also has its own beloved cosmetic treatments, including one for double chins called Kybella. Don’t laugh. Kythera’s double chin fix is currently the only non-surgical treatment for that pesky double chin issue. Of course, it entails a needle that needs to be inserted. But what’s a little needle if it gets rid of a double chin, right? Kythera’s also got something in the works for male pattern baldness. This company has GQ written all over it. In any case, Allergan, which also has Latisse and Juvederm in its cosmetic collection, is currently the fifth biggest pharmaceutical company. Which is great. Except, what to do about the fact that insurance companies don’t usually cover any of its treatments?

Advertisements

Brazil Companies Bananas for Chiquita: Another Valeant Effort for Allergan?; Cruisin for an iBruisin’

Top banana…

Image courtesy of Aduldej/FreeDigitalPhotos.net

Image courtesy of Aduldej/FreeDigitalPhotos.net

As you were sitting at the edge of your seat waiting for weeks now to find out who would be victorious in the corporate battle to acquire Chiquita (yes – the banana people), you can now relax as a winner has emerged. Actually two of them. Brazilian companies, The Safra Group and Cutrale Group, both of which happened to be owned by two of the wealthiest men in Brazil, scooped up the fresh fruit seller to the ripe number of $681 million. But, alas, what became of Irish company Fyffes, who was also bidding on Chiquita, and which many thought would get the fresh fruit company? Well, it wasn’t the luck of the Irish but rather the votes of the shareholders who preferred the Brazilians’ offer. You see Fyffes was offering up stock in exchange for Chiquita. But with Safra/Cutrale’s offer, shareholders get to see more cash up front. And who doesn’t like a little cash up front? Besides, the inversion appeal of Fyffes wasn’t going to net Chiquita all that much to make the transaction worthwhile for Chiquita. But don’t feel too bad for Fyffes. The Irish firm stands to gain a break up fee worth as much as $23 million.

Ironing out the wrinkles…

Image courtesy of artemisphoto/FreeDigitalPhotos.net

Image courtesy of artemisphoto/FreeDigitalPhotos.net

Canadian company Valeant Pharmaceuticals still so very badly wants to takeover Irvine, California-based Allergan. And why not? Allergan makes everybody’s favorite wrinkle-smasher Botox. Allergan also happens to make Latisse, another invaluable, behind the counter, yet highly-essential beauty cosmetic, in my opinion. It also helps that Allergan reported net income of $312.5 million on $1.8 billion in revenue. The stock nearly doubled over the past year. In fact, Valeant wants Allergan so so so badly, that it is once again upping its offer from $179 per share to around $200 per share. And if it has to happen hostilely, then so be it. Which it probably will, mind you. A  “special” shareholder’s meeting is taking place on December 18 where replacing board members will be the theme of the day (in particular, the ones opposing Valeant’s offer). Besides Valeant, Bill Ackman, of Pershing Square Capital Management LP would also like to see a “few” changes made to Allergan’s board as he has a hefty stake in the Botox-making company and would be tickled pink to see Allergan gobbled up by Valeant.

Maybe it’s not you after all…

Image courtesy of sattva/FreeDigitalPhotos.net

Image courtesy of sattva/FreeDigitalPhotos.net

Technology is grand. But maybe not so much in your new car. At least according to Consumer Reports 2014 Annual Auto Reliability Survey. Turns out all those really cool super awesome electronic features that you absolutely have to have are putting a damper on the overall quality of your ride. There are 23 million of us out there who have internet “savvy” cars. By 2020, that number will hit 152 million users. But the problem now, in 2014, is that in-car electronics defects logged the most complaints in 17 categories of the survey. In fact, the problem was called, ahem, “a growing first year reliability plague.” Ouch. Drivers start to question the overall quality of their vehicles when electronic issues begin to arise. Want the most reliable car? Lexus took the number one spot. The Infiniti Q50 sedan, however, took a big hit plunking down to the number 20 spot.