Manny, Moe & Jack. And Bridgestone; Slumpy Times for New Home Sales; Xerox’d Out?

Feeling tire-d…

Image courtesy of Rawich/FreeDigitalPhotos.net

Image courtesy of Rawich/FreeDigitalPhotos.net

Tokyo-based Bridgestone Corp., purveyor of tires and other automobile services, is about to infiltrate the Manny, Moe and Jack trifecta by scooping up the Philadelphia-based auto parts and repair company for about $835 million. Bridgestone is looking to stake out some bigger territory in the auto-service industry and adding Pep Boys to its team will add an additional 800 locations to Bridgestone’s other 2,200 stores. Yeah, it’s that big.  Incidentally, Nashville-based Bridgestone America accounts for almost half of the company’s total global sales. I guess Americans love their Bridgestone.  In the meantime, while Pep Boys did manage to score a $4.8 million profit, Wall Street was most definitely not impressed, as it didn’t hit expectations nor has the company been as successful as rivals AutoZone and  Advance Auto Parts Inc. Pep Boys had been on the lookout for a way to beef up shareholder value and, lo and behold, Bridgestone’s offer of $15 in cash per share, a 23.5% premium over Pep Boys closing price on Friday, proved to be a winner (after previous attempts, mind you). Shares of Pep Boys got a little jump from the news, which usually means investors dig the sale too. The sale is expected to close by the beginning of 2016.

Housed…

Image courtesy of cuteimage/FreeDigitalPhotos.net

Image courtesy of cuteimage/FreeDigitalPhotos.net

What do you get when you combine rising real estate costs and a U.S. economic slowdown? A new home sales slump. That’s no joke as new home sales for September plummeted 11.5% to 468,000 homes, its slowest pace in 10 months, according to the U.S. Commerce Department. Analysts predicted that 555,000 new homes would sell. Ouch. But analysts are also telling us to stay calm, soldier forth and don’t bother reading too much into this month’s very disconcerting figures. Are we also not supposed to read too much into the fact that new home sales all but tanked – precipitously – in the northeast? I personally am finding it a bit of a challenge not to read too much into that 61.8% drop. But then again, I’m no analyst. In any case, new home sales account for a paltry 7.8% of the housing market while existing home sales account for 90% of the residential real setae market. And oddly enough, sales of existing homes actually rose 4.7% to their highest pace in eight years. By the way, sales positively soared in the first nine months of the of the year by 17.6%, not to mention that the median price of a home rose 13.5% from last year’s $261,000 to this year’s $296,900. We should also thank the mortgage gods whose low-ish rates have kept those sales figures from being that much more frightening. So perhaps it is alright to breathe a tiny sigh of relief. A teeny tiny one.

Don’t copy that…

Image courtesy of Serge Bertasius Photography/FreeDigitalPhotos.net

Image courtesy of Serge Bertasius Photography/FreeDigitalPhotos.net

Remember Xerox? Well, neither does Wall Street, it seems, as the 109 year old company (who knew?) took a $34 million loss at 4 cents a share and reported its first net loss since 2010’s first quarter. To be fair, Xerox still beat expectations. Barely. The company has lost a quarter of its value and had to cut close to 1,800 jobs so far this year. However, the company still says that it is not considering a sale. Yet. As companies have been slashing their printing costs, not to mention the rise of mobile devices doing their share to save the trees, Xerox is finding itself in a fiscal pickle and forcing itself to make some major changes to prove its relevance. And what better way to do that than to focus on making software and offering amped up services? That’s what I’m talking about. But in the meantime Xerox is “undertaking a comprehensive review of structural options for the company’s portfolio.” Which basically means they’re trying to figure out how to start making money instead of bleeding it.

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Marijuana Score With Venture Capital Firm; Global Economic Issues Make For Happier Borrowers; Is Yahoo CEO’s Head on the Chopping Block?

Gone to pot…

Image courtesy of Paul/FreeDigitalPhotos.net

Image courtesy of Paul/FreeDigitalPhotos.net

It just keeps getting better and better for Marijuana. Privateer Holdings, a private equity firm whose focus happens to be on the cannabis industry, just got a major cash infusion from a venture capital firm. But this is not just any venture capital firm, either. The one and only Peter Thiel, billionaire, and partner at venture capital firm, Founders Fund, just handed Brendan Kennedy, CEO and co-founder of Privateer Holdings millions upon millions of dollars to be a part of the cannabis magic.  Privateer Holdings, if you recall (and it’s okay if you don’t) scored a huge 30 year licensing deal with the family of Bob Marley to manufacture Jamaican cannabis strains and hemp-infused products for the Marley Natural brand. It’s an epic move by Founders Fund, and an even better one for Privateer Holdings because it marks the first time a major institutional investor invests in the marijuana industry. Recognizing that this is a relatively new industry with countless untapped resources and opportunities, and marijuana legalization occurring in 23 states and counting, Founders Funds figures its a great strategic move. I suspect Founders Fund knows what they’re doing seeing as how it invested in a few other companies you might have heard about including Facebook, Airbnb and SpaceX.

 Mortgage sweet mortgage…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Not that it’s polite to rejoice at the expense of our overseas friends and their fiscal shortcomings  – a veritable global schadenfraude – but their fickle unreliable little Euro and falling oil prices are doing wonders for our mortgage rates over here. Indeed, mortgage rates are dropping because other parts of the world are experiencing economic issues, and those issues are making investors eager to cozy up to the relative warmth and fuzziness of US government bonds. When investors start cozying up to these bonds, mortgage rates keep falling and falling and…In any case, if you’re looking to take out a mortgage, this week you can get one at a rate of 3.73% on a 30 year fixed. That’s not only down from 3.87% the week before but it’s the lowest rate it’s been in over a year and a half. Looking for a 15 year instead? How does 3.05% sound. That figure is also down from last week’s 3.15%. Clearly a lot of potential homebuyer’s are getting the memo on these falling mortgage rates as loan applications were up by 11% last week.

Can’t you take a hint?

Image courtesy of digital art/FreeDigitalPhotos.net

Image courtesy of digital art/FreeDigitalPhotos.net

In a not so subtle hint, Starboard Value Chief Jeff Smith told Yahoo CEO Marissa Mayer in a letter that, “Should you instead choose to proceed down a different path … such actions would be a clear indication to us that significant leadership change is required at Yahoo.” The path to which Mr. Smith is referring is if Ms. Mayer decides to pick up CNN or another cable outlet instead of taking his suggestion of merging with AOL for the benefit of the “cost synergies” this merger would bring. By the way, Starboard owns 7.7 million shares of Yahoo. Also, by the way, Starboard owns shares of AOL, as well. Lastly, by the way, Starboard famously (notoriously?) chucked the board of Darden Restaurents, of Olive Garden fame, last year.

Labor Pains and Gains; Microsoft is Nook’d Out; Merry Mortgage Rates

We can work it out…

Image courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

Image courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

Thanksgiving might be over, but there is yet more for which to be thankful: The number of people filing for unemployment benefits dropped once again to under 300,000. The week prior,  the Labor Department reported, much to our collective chagrin, that 314,000 people applied for jobless claims. So you see now, employers really are graciously hanging onto their workforce and the job market is not “cooling” as last week’s numbers rudely suggested. But time for the downer: 2.36 million people are getting jobless benefits. However, unemployment is expected to stay at its annoying 5.8% perch – which is not totally awful since its the lowest since July of 2008.  In fact, the 4 week average for claims being filed even plunked down 9% during the year. If that doesn’t make you merry, well then, that’s your problem. Then there’s that cheery little fact that 229,000 jobs were added, on average, per month over the last year. Still not jumping out of your seat? Well you should because last year that number was a ghastly 194,000. ADP even graciously reported that 208,000 jobs were added just this past November.

Thanks for the virtual memories…

Image courtesy of cuteimage/FreeDigitalPhotos.net

Image courtesy of cuteimage/FreeDigitalPhotos.net

Barnes & Noble and Microsoft can officially change their Facebook status to “no longer in a relationship” ending a two and a half year partnership that saw mostly loss. Microsoft initially plunked $300 million into the relationship involving the once highly-touted Nook, and oh the hopes – such high hopes that with Microsoft’s tech prowess, the Nook would emerge as a formidable force in the tablet wars. But it was not to be as Microsoft did not do what others had hoped for and even went on to introduce its own tablet – The Surface. Combined with the sensation we call the “iPad” and, of course,  the Kindle Fire, the forlorn Nook was left in the digital dust.  This quarter saw revenues drop to $64 million, a staggering 41% decrease over last year, with sales down 60% for the year. Now it is up to Samsung, to help repair those shattered hopes and dreams for Barnes & Noble, as the bookseller writes out a $62 million check to buy back its stake from Microsoft.

Rated: Awesome

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

If you’re thinking now would be a good time to buy a new house, my virtual friend, you just might be right as 15 and 30 year mortgage rates have fallen yet again. In fact,  those rates are at their lowest in a year and a half. This week you could get yourself a sweet deal on a 30 year at a rate of 3.89%. Last week that rate was hovering at 3.97%.  Looking to score a 15 year? How does 3.1% sound? I’ll tell you how it sounds – better than last week’s 3.17%. These rates, by the way, are coming just in time as home values are creeping up on us. October saw a 6% rise in values. Good news for sellers, anyways. Not so much for buyers.