Schadenfraud Anyone? Forbes Unveils its Latest Top 400; Can’t Stop Netflix; Venmo’s the New Way to Go. At Least According to Paypal

That’s a whole lotta money…

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Forbes has unveiled its latest list. This time it’s the top 400 richest Americans for 2017 and there are very few surprises in store. Bill Gates and his $89 billion net worth takes the top spot, followed by Amazon’s Jeff Bezos and everyone’s favorite Omaha Oracle, Warren Buffett.  Facebook’s Mark Zuckerberg sits pretty in fourth place. The first time we finally see a woman on the list is at spot number 13 and it’s occupied by Alice Walton of the illustrious Walmart clan. There are 22 newbies on the list and some of them are even self-made billionaires, including Netflix CEO Reed Hastings who comes in at number 359. He had a good year and his company had a great quarter. But we’ll get to that one in a bit. Former Uber CEO Travis Kalanick comes in at number 115, despite being out of his CEO job, while beloved Star Wars creator George Lucas gets spot 118. As for President Trump, he did make the list, coming in at a less than impressive (for him) ranking of 248.  He shares the spot with 15 other people including Snapchat founder Evan Spiegel. Their fortunes are valued at $3.1 billion, a figure the President will probably dispute. It’s a steep drop for the President, whose 2016 ranking had him at the 156th spot. But I guess that’s what happens when your portfolio loses $600 million. I wonder who he’s going to blame for that one?

Wall Street ❤️ Netflix…

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The best way to bring Wall Street to its finicky knees is to crush its expectations. And Netflix did just that. First, the video streaming company laughed in the face of analysts’ projections for subscriber growth. For Netflix that was a 5.3 million increase, far from the modest forecast of 4.5 million new subscribers. A large percentage of those new subscribers came from outside the U.S. Netflix now boasts 109 million subscribers and I’m guessing you must be one of them, right? As for the next quarter, the company expects to add 6.3 million subscribers. Revenue for the company was $2.99 billion, again beating projections of $2.97 billion.  However, at first glance, Netflix’s profit was not so impressive. But that’s only because the company is throwing down serious cash for producing its own shows. And if you’ve ever seen “Orange is the New Black” or “House of Cards” then you’d probably agree that it’s money well spent.  So what does this all mean for you, the Netflix connoisseur/viewer, who obsessively waits for new seasons of your beloved shows to be unleashed? Well, you can probably expect an increase in your subscription plans but hey, that’s the price you gotta pay if you want to keep watching new seasons of “Stranger Things,” right?

Going half-sies…

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If you haven’t signed up for Venmo yet, now might be a good time to start. The company just announced that users can now use the app to make mobile online purchases from over 2 million retailers including Forever 21 and Foot Locker.  But what’s so darn cute about Venmo is a feature that gives you the option to split a purchase with a friend. Or even an acquaintance, I suppose. Which is so great when you go out for lunch and can’t be bothered to do the math at the table or when you just want to pay the rent down the middle. And, you can even share status updates about the purchase. How nifty. Especially if you’re a millennial. Did I mention that Paypal is Venmo’s parent company? Well, it is. And pretty much anywhere you’re able to use PayPal, you can now use Venmo there as well. Just think of all the Lululemon merchandise you can purchase with all your besties.

 

 

 

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Billionaire Gets Booed Over Trump Support; Pes -Oh No! Clinton Investigation Hurts Chances and Currency; Lumber Liquidators Low on Liquid

Are you sure about that?

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Tech billionaire Peter Thiel s taking a lot of heat for his support of Republican presidential candidate Donald Trump. People are enraged that Thiel, who happens to be a PayPal co-founder, had nothing better to do with his money than throw $1.25 million into Trump’s campaign coffers. In fact, there are some who would like to see Thiel ousted from his board positions at Facebook and Y Combinator. However, Mark Zuckerberg has already said he wouldn’t do that and while Y Combinator CEO Sam Altman can’t stomach Donald Trump, he also has no plans to boost Thiel despite his political leanings. “What Donald Trump represents isn’t crazy, and it’s not going away,” Thiel said during his speech at the National Press Club in Washington where he griped about all the problems that America continues to face. From not benefitting from free trade, to watching taxpayer money go down the toilet to fund overseas conflicts, to raging about America’s over-priced healthcare system, Thiel’s speech had all the makings for a Trump rally. Well, except for assaulting women and imposing bans on Muslims entering the U.S. At least Thiel does not agree with all of Trump’s statements and sentiments and he even finds Trump’s comments about grabbing women “clearly offensive and inappropriate.” And that is oddly reassuring.

Trump-ed Up Currency…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Speaking of the election…The peso, while maybe not the preferred currency for many, is actually a fairly reliable gauge of how the markets feel about our Presidential candidates. Today, the Mexican currency was down as the FBI investigation of Hillary Clinton’s emails on Anthony Weiner’s computer continues to rear its ugly inconvenient head. The Peso favors Hillary and when she does well, it goes up. Following the debates, the peso experienced a nice boost, as it was not keen on Trump’s plans to build a wall along the Mexican border and renegotiate NAFTA with terms more favorable to the United States. Back in September, the peso hit a record low when Trump began making considerable gains in the election. But alas, it was news of this latest FBI investigations that sent the peso tumbling to its worst fall in seven weeks. On the bright side, if you can call it that, today the dollar rebounded signaling that the investigation isn’t affecting the U.S. currency. It also presumably means that the dollar would like to see Clinton installed in the White House.

No kidding…

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Speaking of things that make you sick, we now shift our attentions to Lumber Liquidators and its ongoing saga over its formaldehyde-laced flooring.  Investors had hoped the stock would rebound right about now. But those hopes were dashed when the company reported its third quarter earnings with the stock taking a 14% hit. The company posted an $18.4 million net loss, losing 68 cents per share, which was way over the expected 21 cents per share loss. The worst part of that figure was that the loss was larger than expected as legal fees continue to plague the company and no timeline has been established for when the company will finally settle its litany of lawsuits.  Interestingly enough, sales were actually up and hit $244 million, beating expectations of $232 million. Who would have thunk it? In the meantime, the company saw half its value go down the proverbial toilet since the scandal broke out in March, courtesy of “60 Minutes” and its relentless investigative journalism.  At least the U.S. Consumer Product Safety Commission ended their investigation back in June, issuing no recall. Shares closed at $15.51.

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.

 

IBuMmer; Icahn/Andreesen Billionaire Smackdown; Valeant/Allergan Smackdown

 Big Blue-boo…

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Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Perhaps you recall IBM?  Perhaps you don’t. The once powerful company that sat at the forefront of technology is now at the forefront of…nothing as the company just released its very disappointing earnings. The once mighty maker of chips – and I don’t mean potato (though we might be seeing better earnings if the chips were indeed of the potato variety), has sold that portion of its business. Revenue was down 4% to $22.4 billion which might seem like a nice beefy number except that analysts were expecting $1 billion more than that. And the company’s revenue has been going down for a few years now.  Analysts expected  the company to at least pull in $4.32 per share. It didn’t. Instead, profits for IBM took a 10% dive earning $3.68 per share.  Oh well. There’s always next quarter.

Love doesn’t live here anymore…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

It’s official. Marc Andreesen and Carl Icahn are not friends. And I don’t think they ever can be. At least not anymore after Mr. Icahn said in an interview that Andreessen is “what’s wrong with corporate America” and Andreesen telling CNBC that Carl Icahn lies and “makes stuff up.” Where is the love gentlemen? In any case, the latest episode in the Icahn/Andreessen saga is that Marc Andreesen has bid a not-so-fond farewell to the board over at EBay. It seems the extremely prescient Silicon Valley billionaire, Andreesen, and activist investor, Icahn,  got themselves tangled in yet another kerfuffle which has probably something to do with the kerfuffle they had earlier where Mr. Icahn accused Mr. Andreesen and fellow board member, Scott Cook, of having conflicts of interests where PayPal and EBay are concerned. I shall spare you the lurid details. Mr. Andreesen and Mr. Cook vehemently disagreed with Mr. Icahn’s accusation. But alas, it matters not as PayPal is no longer one with EBay. As for hopes of Mr. Andreesen and Mr. Icahn burying the corporate hatchet (or whatever it is that insanely wealthy executives do), don’t hold your breath.

A wrinkle in plans…

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Image courtesy of patpitchaya/FreeDigitalPhotos.net

Perhaps you may recall pharmaceutical giant Valeant? Perhaps you recall how this pharmaceutical giant wanted to take over another pharmaceutical giant by the name of Allergan, notable for perennial fan fave Botox? And perhaps you recall that Allergan would prefer if Valeant would just go away? Well, it looks like that’s not going to happen anytime soon as Valeant just released some very impressive earnings, easily trumping analysts’ expectations. Except that Valeant also had good earnings. But no matter because Valeant really wants very badly to scoop up Allergan even though Allergan very badly does not want that to happen. Activist investor Bill Ackman, and his Pershing Square Capital Management LP, who is gunning for an Allergan takeover, just might make that even likelier and hostile-r because of Valeant’s newly announced, financially robust numbers, since numbers like those will allow him, together with Valeant, to up the ante to buy out the fabulous Botox maker.

 

Luck O’ the Apple’s Alleged Transfer Pricing; eBay and PayPal Headed for Splitsville; Confidence Bruiser

An Apple away…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

 

There are some very complicated things going on with Apple on the other side of the Atlantic. Except Apple probably won’t get in too much trouble for any of it. Well, maybe a little. It depends on whom you ask. As for Ireland? Well, the Emerald Isle just might be in a whole vat of hot water. At issue is whether or not Apple did something called transfer pricing, the details of which I will gladly spare you. Though some would argue all the trouble has to do with whether or not Apple was getting illegal tax breaks from Ireland – a very major no-no, in the eyes of the EU anyways. In any case, there is a report coming out from an EU commission and, in keeping with the spirit of all things that involve government, it’s all very convoluted.  If anyone or any entity, for that matter, gets fined, it will likely be Ireland, that very corporate-hospitable country, who some people argue was a little too friendly to Apple and whose allegedly generous tax-breaks amounted to, I kid you not, nothing short of “state aid,” according to the Commission. And if you were wondering how any of this affects you, then rest assured – it doesn’t, really.

Breaking up is not so hard to do…

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Image courtesy of sdmania/FreeDigitalPhotos.net

What Carl Icahn wants, Carl Icahn gets. Eventually, anyways. For instance, activist investor Carl Icahn wanted eBay and PayPal to march head first into splitsville hoping for a “tax-free” spin-off. And wouldn’t you know it, the two companies did just that. How convenient. It helps that Icahn owns about 30 million shares of eBay and scored about $100 million today from the move. EBay, by the way, pulled in revenues of almost $10 billion this year, while PayPal pulled in $7.2 billion. Before you scoff at PayPal, know that PayPal grew at a 20% rate compared to eBay’s 10% rate. So now who’re you gonna scoff at? Huh? This move frees up PayPal to pursue a whole bunch of opportunities that might have held it back if it was still tied to eBay. Staying together would have proved “less advantageous” for both. Ah! What a break-up story. I wonder which studio is going buy the rights to this corporate tearjerker.

Speaking of self-esteem…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Looks like consumers aka you, me, us aren’t feeling very fiscally confident these days, that is, according to an informative index that actually gauges our collective confidence level. Which, by the way, weighs in at at disconcerting 86. It’s disconcerting in that last month our collective confidence level was over a 93 – a seven year high, mind you. Quite the tumble, I’ll say. So what exactly is shaking our confidence lately? Not so minor things like job growth that hasn’t been growing quite as quickly as we’d like. And if that isn’t enough of a confidence deflater then how about the fact that Americans also don’t much care for the slow-ish economic growth. But some really intelligent economists out there find that this months “86” index reading is but a minor hiccup in an otherwise positive, albeit, slow economic recovery. So fear not, oh faithful consumer, as falling gas prices and job growth (even though slow, at times) are all within reach.

Tweeting Bad, CEO Is No Longer On Target and Are Banks Headed for the Slammer?

When tweeting goes bad…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

It’s bad enough cursing out your colleagues. But cursing them out on twitter takes an extra special dose of messed up. Just ask former Paypal Director of Strategy Rakesh (Rocky) Agrawal. That is, if you can find him. On Friday night the then Paypal executive released a number of expletive laden tweets presumably directed at his fellow executives. In one, he called a VP of Global Communications a useless middle manager. Much of what he tweeted was incoherent and made absolutely no sense – for which he conveniently blamed a “new keyboard.” In fact the only coherent parts of the tweets were the expletives. Agrawal says he had already resigned from the company before the tweets escaped his fingertips yet shortly after they started circulating and gaining attention @Paypal tweeted: Rakesh Agrawal is no longer with the company. Treat everyone with respect. No excuses. PayPal has zero tolerance.

Way off target…

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Image courtesy of adamr/FreeDigitalPhotos.net

The fact that Target (TGT) CEO Gregg Steinhafel’s resignation was announced today isn’t quite as shocking as the fact that he waited this long to do it. After a colossally expensive and embarrassing data breach that compromised the credit card and personal information of millions – no wait – make that tens of millions of people during the past holiday season, the now former CEO said in a statement that he holds himself personally responsible. Oh well. Maybe if he had had the good sense to try and mitigate the circumstances when the breach was first detected – before any data was even taken – instead of waiting as long as he did, then perhaps Steinhafel’s thirty-five year career at the $40 billion corporation might not have come to such a screeching halt. But he’s probably not too stressed about job hunting. The $55 million he’s rumored to be getting in severance should tide him over for a couple of years.

Don’t bank on it…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Just when you though banks could no wrong…Actually, they do plenty of wrong. And now Attorney General Eric Holder wants everyone to know that although some financial institutions are Too Big To Fail, “There is no such thing as too big to jail” either.  Banks like Credit Suisse and BNP Paribas are staring down the wrong end of recent efforts by the US government for violating all kinds of rules. Credit Suisse was ticking off the US with their illegal tax shelters. The US has become less than fond of BNP Paribas for violating US sanctions against countries like Sudan and Iran. Some might find it shocking that a bank would want to assist countries whose gross human rights violations have come to be a part of the fiber of their existence. But to banks – big and small – money is money.  And to AG Holder, the law’s the law. And if it gets broken, he’s got some not-so-inviting cells waiting to house the offenders.

 

Board Members Smackdown, Darn That Weather and Netflix Has Its Own Drama

Image courtesy of jesadaphorn/freedigitalphotos.net

Image courtesy of jesadaphorn/freedigitalphotos.net

If you’re looking for a good fight today then look no further than Carl Icahn vs. eBay.  The activist investor who owns about 2% in eBay stock said that CEO John Donahoe “was completely asleep, or even worse, either naïve or willfully blind…” Yikes.  Icahn is peeved because he feels that some eBay board members have commitment issues and wants eBay to spin off its PayPal unit.  So what does this mean for you, o’ faithful consumer of online goods and services? Well probably not much.  At least for now…

Maybe it wasn’t that awful tie after all…

The money guys say, chillax.  It’s not your lousy interview skills or your beer-stained tie that (probably) cost you the job.  Blame it on the totally annoying Polar Vortex instead.  Though economic data proved to be much worse than what was originally predicted in both housing and hiring,  the investors are blaming it on Mother Nature and the nasty weather she’s been dumping on us.

Image Courtesy of Michelle Meiklejohn/freedigitalphotos.net

Image Courtesy of Michelle Meiklejohn/freedigitalphotos.net

If that is in fact the case, does this mean we can expect to see some growth in those sectors as the weather warms up (if it ever does)? Hmmm.

Big Netflix fan, are ya?

Well let’s see just how big a fan you really are?  Are you willing to pay even more for the service.  If you answered yes then guess what…it’s entirely possible that you might MIGHT in fact get the opportunity to prove your customer loyalty and fandom now that Netflix has agreed to pay Comcast to stream its content way smoother than in recent months.

Image courtesy of Stuart Miles/freedigitalphotos.net

Image courtesy of Stuart Miles/freedigitalphotos.net

It’ll all be worth it, wont it?  After all, that means that those pesky little pauses and other snags reported by subscribers are soon to be a thing of the past…it is hoped…