Ford Looks to Boost Profits With Layoffs; Twitter Sequel: The Return of Biz; Avocados Will Not Make You Rich!

Slash and burn…

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Today’s job-slashing news is brought to us by Ford Motors. The automotive company, which employs about 200,000 people worldwide, plans to cut about 10% of its salaried workforce. Apparently, the job cutting efforts are simply part of a $3 billion cost cutting program. What Ford is really hoping to accomplish is to keep its stock from from getting too close to a five-year low and boost profits at the same time. Ford released an official statement today and made sure to talk a lot about priorities, profit and growth. Curiously enough, however, no mention was made about job cuts. Wonder what that’s all about. If it’s any consolation, rumor has it that Ford is offering generous early retirement incentives to some of the aforementioned salaried workers. However what generous and incentives actually mean remains to be seen. In any case, CEO Mark Fields, who came on board back in July, wants people to know that the folks over at Ford “are as frustrated as you are by the stock price.” Fields in particular must be awfully frustrated considering that the stock has dropped over 35% since he took the CEO reins.

Let’s get Biz-y with it…

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Image courtesy of zirconicusso/FreeDigitalPhotos.net

Amidst a throng of high-level departures comes a potential bright spot for Twitter – the return of co-founder Biz Stone, six years after he left. In a Medium post he wrote that he’s returning to the embattled social media company for the purpose of “filling the ‘Biz-shaped hole.'” Yup. He said that. He went on to say, “You might even say the job description includes being Biz Stone.” Yup. He said that too. Biz wants to guide company culture, feeling and energy, and Twitter could definitely use help in all three of those categories. Besides, it’s not like Biz had anything else going on these days since he just sold his latest start-up to Pinterest for an undisclosed sum. You got that? An undisclosed sum. (I have no definitive idea of what that means.) As for Jack Dorsey, another co-founder and current Twitter CEO, Biz counts him as “his closest friend.” At Twitter anyway. Wall Street seems to be thrilled about Biz Stone’s return as well, sending the stock up over 2%. Twitter’s stock will take any boost it can get these days. And according to Stone, and presumably President Trump, “The world needs Twitter, and it’s here to stay.”

It’s the pits…

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Today is not a good day for the avocado industry. It seems Australian millionaire Tim Gurner said during an interview on Australia’s “60 Minutes” to ditch the avocados if you want to buy a house. It’s not that Gurner has anything against the green-fleshed delicacy. Only that Millennials should focus on saving their money towards purchasing a home and accumulating wealth instead of spending $19 on pricey avocado sandwiches. See the connection? Neither did plenty of Twitter users.  On Twitter @kalebhorton wrote: “Alright, I did the math. If I stopped eating avocado toast every day, I would be able to afford a bad house in Los Angeles in 642 years.” Foghorn Greghorn tweeted: “Avocado Toast $6.50 Data $150 House $650,000 Utility $150 someone who is good at the economy please help me budget this my family is dying.” But maybe Gurner’s onto something. After all, he is a real estate tycoon with an estimated $460 million. And I bet he owns lots of homes.

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Coach Gets Quirky With Kate Spade; Warren Buffett’s Latest Thoughts; It’s Kumbaya for Comcast and Charter Communications

Luxury quirk…

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Image courtesy of Sicha Pongjivanich/FreeDigitalPhotos.net

Coach is about to get a whole lot more accessorized now that it announced it will be buying Kate Spade. The $2.4 billion price tag on the deal means Coach will be plunking down $18.50 per share, which ends up being a 9% premium over Kate Spade’s Friday closing price. Analysts are digging the merger, thinking it’s a good fit and news of the deal set Wall Street tongues wagging, subsequently sending shares of both companies up.  In fact, ever since Kate Spade brass decided on a sale back in December, the stock has been on the rise. Which is weird because before that the stock was flagging over increased competition and decreased traffic and sales. Much of the enthusiasm over the sale is because people think Coach will have an opportunity to up its street cred with millennials. After all, Kate Spade’s quirky merchandise tends to resonate with that finicky demographic. And when something actually resonates with millennials, companies want in and are quick to figure out how to make a lot of money in that arena.  In fact, 60% of Kate Spade sales come from millennials while only 15% come from outside the U.S. Go figure.

It’s all about the tapeworm…

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It was that time of year again where one of the wealthiest men in the world imparted his financial wisdom onto his shareholders, and also regular people. Sort of. At the annual Berkshire Hathaway meeting held in Omaha this past weekend, Warren Buffett and his partner, Charlie Munger, shared their isights on several topics including Wells Fargo, Amazon and even the Republican healthcare bill.  On Wells Fargo, Buffett said there were three huge mistakes, but the biggest one was not acting on the problem when they first heard about it. On the Republican healthcare bill, he shared this pearl: “Medical costs are the tapeworm of economic competitiveness.” Got it? Tapeworm. Also,  he messed up royally by not ever owning shares of Amazon.  He admits he never anticipated Jeff Bezos going as far as he did. Apparently Buffett’s oracle skills failed him on that one. On a different note, he said that if he dies tonight, he’s convinced shares of Berkshire Hathaway would go up tomorrow. Warms the heart now, doesn’t it.

Well isn’t this precious…

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Image courtesy of Witthaya Phonsawat/FreeDigitalPhotos.net

Comcast and Charter Communications are joining hands in the spirit of fighting against the dreaded and unflagging power of wireless carriers. Apparently when it comes to fighting wireless carriers, there is an inherent safety in numbers. So together the two companies will join hands and tackle such things as customer billing and device ordering systems. Also, they made a deal with each other that neither one would attempt to buy any other wireless companies and to consult one another before either one would make related deals,. They want to avoid increasing competition between the two companies. A move like this allows them to develop wireless services for their own companies without worrying over competition from each other. So its’s a little kumbaya and a little self-preservation.  And bonus: The two companies have said the plan could have the potential of lowering costs for its customers. However, that remains to be seen so don’t hold your breath.

 

Chip Cards Get Moving; Netflix Growing Pains; Harley-Davidson Earnings Not Cruising

Feeling chipper…

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There are around 265 million Visa credit and debit chip cards floating around that have been providing some much needed security. Big merchants who upgraded their terminals for chip-enabled cards have noted an 18% decrease in fraudulent activity.  Five of the 25 biggest merchants who were not chip-enabled actually saw an 11% uptick in fraudulent activity. And while everyone is happy about the added security, both merchants and customers don’t care for the much longer transaction times. But now Visa finally finally made some improvements to its software with a “Quick Chip” upgrade. The new upgrade is expected to reduce wait times and shave off about 18 seconds from transactions times. Instead of dipping your card in the terminal and waiting a number of endless seconds until the terminal angrily beeps that you need to remove your card, you’ll dip it in and take it right out in two seconds. Wal-Mart also took cues from disgruntled customers and figured out a way to shave 11 seconds of their transaction times: by skipping the prompt that asks shoppers to confirm the transaction amount. Not sure how I feel about that one.  If you recall, merchants had to meet a deadline last October to upgrade their terminals. If fraudulent activity occurs, the merchant now has to pony up and banks are now OFF the hook.

Growing pains…

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Image courtesy of digitalart/FreeDigitalPhotos.net

Netflix is in 190 countries and can be accessed from just about everywhere. The company gleefully announced that it picked up 6.74 million new subscribers in its latest earnings report and its total subscriber-ship is hovering at 81.5 million paying viewers. The streaming video service has even managed to produce more original content than HBO  and figures that by the end of the year, it will have 600 hours of original programming under its belt. But that’s where the fun ends because today the stock fell 11%, experiencing its biggest same day drop in eight months, falling to $95.84. Investors are super-curious and worried about Netflix’s growth plans after giving the disappointing news about the amount of new subscribers it expects to gain…and lose. That’s right. Netflix expect some people to drop out and dare I say it…not lay their eyes on another episode of Orange is the New Black once subscription prices go up. Oh well. You win some, you lose some. The company is thinking it’ll add only about 2.5 million subscribers next quarter, and expects just 500,000 of them to be in the U.S. Then of course there’s all that competition from Hulu and Amazon. Because, after all, its not enough for Amazon to dominate e-commerce. More than eight brokerages decided that maybe now is a good time to announce that their target price for Netflix stock is going to get somewhat smaller, with the average price target coming in at $123. However, with all that bad news, Netflix still has big plans to surpass 100 million subscribers…by next year.

Not-so-easy rider…

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Harley-Davidson (HD) bikes might carry major street creed but its earnings tell a whole different story. The legendary motorcycle company just posted its earnings and well…they just weren’t as impressive as the product themselves. HD took in a $250.5 million profit, picking up $1.36 per share, but this time last year the company earned way more, topping out closer to $270 million and adding $1.27 per share. Analysts, by the way, only expected $1.29 per share to be added. That 7.2% year-over-year decrease had Wall Street scratching its head. At least revenue was up 4.8% to $1.75 billion from last year’s $1.67 billion. But while increased revenue is a good thing, HD’s .5% sales decrease in the United States is most definitely not. The company sold only 35,326 bikes in the United States and lost some market share to competitors, especially Polaris’ Indian Motorcycles. Apparently, Harleys have failed to attract younger consumers (read: milllenials). However, globally, Harley Davidson fared much better, selling 57,458 bikes, and expects to sell a total of between 269,000 and 274,000 bikes for the year – which is more than what was initially expected. Harley-Davidson graciously explained that “retail sales trends have significantly improved.” Which seems to be true, at least for Polaris, who has taken a big bite out of Harley-Davidson’s market share.

The List of Best Companies is Here; Sports Authority Calls it a Game, Files for Bankruptcy; Angie’s List Free as a Bird Now

In good company…

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Because there’s nothing like a list to grab your attention these days, Fortune Magazine just published its latest list of the “100 Best Companies to Work For.”  For the seventh year in a row, Google tops the list. And how could it not? After all, Vince Vaughn and Owen Wilson did make a movie about being interns there, so how could it not be the best company to work for? The Container Store takes the 14 spot. As a customer, I already spend inordinate amounts of time in their stores fantasizing about how organized I could become. Hmm. Maybe I should check the company’s job board. Recreational sporting goods company REI snags the 26th spot. If you recall, they made Glassdoor’s list of companies with the best perks.  Good perks make for happy employees who vote for their own companies to win big on these lists. Publix Supermarket came in at 67. As the largest employee-owned company, Publix has extremely low-turnover and plenty of perks that keep employees satisfied for decades. You might want to check if your company is on the list. If not, then consider tidying up your LinkedIn profile as there are currently over 100,000 job openings at these companies that are just waiting to be filled.

Disregard for authority…

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Image courtesy of biosphere/FreeDigitalPhotos.net

Sports Authority has gone bust and is set to start closing its doors at about 140 locations as early as tomorrow, including 25 stores in Texas and 19 in California. Sports Authority managed to rack up $1.1 billion debt as it failed to keep up with current consumer trends. There’s a chance that another company will pick up Sports Authority’s debt-riddled pieces and give the sporting goods company a second profitable chance. But if April comes along and Sports Authority has no buyer, it will throw in the proverbial fiscal towel and close down its remaining locations. If you have any gift cards for Sports Authority, you might want to use ‘em up NOW while Sports Authority still honors them. Need to return or exchange merchandise? Good news! You still can…as long as you’re near one that didn’t close. Warranty related issues keeping you awake at night. No worries. Sports Authority can still service those items. Sports Authority is even carrying on with its customer loyalty program (there’s a joke in there somewhere) – at the locations that are still open anyway.

Free ‘em up…

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Image courtesy of biosphere/FreeDigitalPhotos.net

Angie’s List will now be free for the masses. Sort of. The review site will now allow visitors to read reviews and ratings…without having to fork over the security codes on their credit cards. However, tiered subscription services will be offered to those looking for a few extra benefits not included in freemium subscriptions. There’s going to be a $24.99 silver subscription and a $99.99 gold subscription. While those offers might seem a little pricey, they come with big benefits like an emergency service hotline and fair price guarantees. A small price to pay for some big peace of mind. Even though the company went public way back in 2011, it didn’t churn out its first annual profit until 2015. But today, shares went up almost 4% on the news, especially because this freebie subscription idea was all part of a bigger plan to help the company grow and make it more profitable. It’s also a major reason why the site dissed IAC’s HomeAdvisor’s bid last year. Angie’s List found the $512 million, $8.75 per share bid a lowball offer and said it undervalued the site. According to CEO Scott Durchslag, who has held his post for just six months, the current model made it harder for the company to grow. Besides, the company felt that millennials aren’t going to bother paying for reviews and it does seem to be all about those pesky millennials lately, doesn’t it? Angie’s List did have to revise its full year guidance and now expects to take in between $345 million and $355 million when analysts were expecting numbers closer to $362 million. The reason being is that 20% of the company’s revenue comes from those subscriptions. However, the company now figures that, going forward, it will be able to hit $750 million by by 2020. Angie’s List brass are expecting to “see traffic explode” under this new model.” The site currently has approximately 3.3 million subscribers but expect that number to catapult real soon.

Waffle House: For All Your Shipping Needs; Home Deport Improves Earnings; Fed Chairwoman Ponders Millenials

Can you expedite that waffle?  

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

What do you get when you cross a restaurant chain known for its waffles with a delivery app? Roadie, of course. Haven’t heard of it yet? That’s probably because it’s only been up and running for a few weeks. However, it’s already got $10 million worth of funding with some of that cash coming from Google’s Eric Schmidt. The app is also being touted as the “Über of shipping.” The idea, created by founder Marc Gorlin is so simple yet so genius. It matches up people who need to ship something with other people who are already driving to that location, often for much less than what the usual shipping companies charge. And just where do the waffles come in? Enter Waffle House and its 1,750 locations which will serve as the meeting points for shippers and insured drivers. The cost to ship an item  – and yes it has to be legal! – with a “Roadie” could range from $12 – $200. First time “Roadie” downloaders are eligible for a free waffle. Get a free beverage to take along with you every time you make a delivery.  While it’s only available in 25 states , primarily in the southeast, there’s no need to fret. With 7,500 downloads and counting all signs point to some major expansion plans sooner rather than later.

Where can I find nails?

Image courtesy of zole4/FreeDigitalPhotos.net

Image courtesy of zole4/FreeDigitalPhotos.net

Home Depot had a particularly fabulous fourth quarter pulling in a 36% profit. Net income came in at $1.38 billion at about a buck per share Analysts only predicted Home Depot would gain 89 cents per share. A year earlier the company gained 73 cents per share. So what gives?  It seems the retailer earned some major cash from its website and its big push to improve customer service has paid off quite nicely for the world’s largest home improvement retailer. If you are lucky enough to be one of Home Depot’s esteemed shareholders , then congrats to you as you just earned 12 cents per dividend, which is now up to 59 cents per share. The company even has big plans to buy back $18 billion in shares. In the market for some gainful employment?  You might want to check out Home Depot’s job board. The company is looking to fill 80,000 jobs for the spring, the store’s busiest season. Unfortunately, the retailer’s forecasts for the year are tinged with a bit of disappointment as it is convinced that the exchange rate and that especially robust dollar of ours is going to put a 6% ding in the stock this year.

Everyone likes a good mystery…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Fed Chairwoman Janet Yellen is taking fiscal center stage today before the Senate Banking Committee.  The Fed Chairwoman gets to enjoy two days of back to back congressional testimony where she will be grilled on a loooong list of complaints, courtesy of the Republican controlled House and Senate. Among the questions with which she will be peppered is when exactly does the Fed plan on hiking those interest rates, an answer that has been eluding the American people and its elected officials for quite some time.  Not exactly the stuff that Oscar nominated movies are made of. But on Capitol Hill that testimony could give Game of Thrones a run for its money. Ms. Yellen also wondered aloud about that mysterious lot born in the eighties and nineties, a.k.a. Millenials. The Fed Chairwoman finds them to be a bit of a mystery and is unsure how the economy is going to affect them. If that’s what she’s wondering about them then I’m guessing she doesn’t get to Chipotle very often.

Clydesdales No Longer On Tap at Budweiser; Citigroup’s Lack of Discipline Cost $15M; Saks Fifth Avenue Gets a Luxe New Mortgage

Put out to pasture…

Image courtesy of dan/FreeDigitalPhotos.net

Image courtesy of dan/FreeDigitalPhotos.net

The unemployment numbers may be going down lately but you can add the Budweiser Clydesdales to the list  of people – or in this case, animals – who need to brush up on their LinkedIn skills. The iconic horses, who have graced Budweiser holiday commercials since 1987 apparently haven’t been puling their weight to attract a hipper, younger beer-guzzling demographic. In fact, 44% of 21-27 year old beer drinkers/guzzlers have never even (gasp!) tried Budwesier. Can you even stand it? So the beer company will now trek out to college towns for food festivals and host parties to increase in order to woo that elusive younger, hipper crowd. As for any new ad campaigns, Budwesier will substitute Cydesdales for millenials who will stare back into the camera as they poignantly utter: “If you could grab a Bud with any of your friends these holidays, who would it be?” I’d say a Clydesdale.

Fined and fine…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Citigroup has to pay even more fines. Again. Except this time those fines have nothing to do with its dubious role in the housing collapse and fiscal nightmare of 2008. The Financial Industry Regulatory Authority, or as the cool kids say, FINRA, has fined Citigroup $15 million because the bank didn’t do enough to prevent and deter its analysts from engaging in all kinds of questionable activities. Which all sounds way more provocative than it is. From January 2005 to February 2014 Citigroup issued about 100 warnings to analysts for doing things they were’t supposed to do. Issuing those warnings was clearly the responsible thing to do. Except that there was way too much between the warning until disciplinary action took place. But then, it seems, Citi was wee bit too soft in punishing the offenders, which is perhaps why the analysts kept repeating their dubious actions. In one instance, equity research analysts hosted a dinner for employees and clients (mind you, I was not invited) where the hosts/analysts discussed their stock picks. I’m sure the topic made for fabulous dinner conversation, however the discussed stock picks did not jive with all the research conducted by the hosts/analysts. That was, of course, just one of the many (many) examples of breaches for which Citi was fined. Naturally, the bank preferred not to offer any comments on the matter except to say ,”We are pleased to have resolved and put this matter behind us.” I’ll bet. And rest assured that $15 million will do nothing to thwart Citigroup’s holiday shopping.

Is a luxury refi an oxymoron?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Many people today refinance their mortgages and Saks Fifth Avenue is no different. Okay, it’s a lot different but I digress. Hudson Bay, the company that owns the luxury retailer, took out a 20 year mortgage for its flagship store conveniently located right on New York City’s Fifth Avenue to the whopping tune of $1.25 billion. Next year the store is getting a $250 million renovation.The building, however is valued at $3.7 billion. If that doesn’t scream prime real estate I don’t know what does. Did I mention that Hudson Bay paid $2.9 billion for the entire chain? How very lucky for them.

Snoop Dogg and Jared Leto Join the Reddit Fray; Jobs They are Aplenty; Soda Delivery Right to Your Door

Reddit already?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Reddit, the website billed as “The Front Page of the Internet” is itself making headlines for having raised $50 million in funding. Of course, the usual Silicon Valley suspects whipped out their wallets to get a piece of the Reddit action but they weren’t the only ones. Hip-hop icon Snoop Dogg and oh-so-pretty-Oscar-winning-actor Jared Leto wanted in on the Reddit pie too. Reddit, whose content leaves some tongues wagging and other tongues gagging, plans on using that $50 million for all sorts of neat things like hiring more staff, improving its mobile offerings and, of course, ads. Reddit CEO Yishan Wong also has big convoluted plans to give back 10% –  in money, that is –  to the users who so valiantly scourge the internet to find the right stories that drive the traffic which entertains and sometimes horrifies its visitors. However Wong fully admits “that this plan could tally fail.” Totally. We mustn’t forget to mention that unfortunate incident when nude celebrity photos were leaked onto the site. Many thought the leak was extremely uncool. The site was launched back in 2004 and boasts 133 million users.

Sweet September…

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Just in case you were feeling bummed about the economy, because I know that was your first thought when you woke up this morning, then here’s some good news. According to Automatic Data Processing aka ADP, aka those three letters that help decorate your paycheck, just released new data telling us that 213,000 jobs were added in the month of September. That marks the sixth month in a row that job gains are up. It’s especially good news since job gains over the 200,000 mark have a special little way of making the unemployment rate head a wee bit south. And these numbers are just from the private sector which, by the way, gained in all industries. Just wait till you see what numbers the public sector posts. Ooh. I can hardly stand the excitement. Now if the Bureau of Labor Statistics would graciously back up those numbers then all would be right with the world. Almost. Because less people are filing for jobless claims, which happen to be at a seven year low, more and more spending occurs, which leads to more and more economic growth, which leads to…well, you can figure it out from here.

Amazon quench…

Image courtesy of kraifreedom/FreeDigitaPhotos.net

Image courtesy of kraifreedom/FreeDigitaPhotos.net

Thirsty? Then you better log onto Amazon. Quick. That is if you are jonesing for PepsiCo’s latest beverage offering, PepsiTrue. What’s true is that this drink can only be purchased, for now anyways, via the e-commerce website – in 24 packs. What is also true is that it still has calories in it, except 30% less of them. As for the hotly contested high-fructose corn syrup and artificial sweeteners? Those ingredients have been scrapped as a way to win back Millenials who seem to prefer beverages sans those items and have been shifting away from soda for the last several years. And, by initially selling the product on Amazon, PepsiCo, apparently, will be able to gauge the response for the new cola. Now can someone tell me what PepsiCo would have done if this were 1984? Anyone?