Yahoo’s Got Major Un-security Issues; Big Pharma Slapped With Big Lawsuit; Super Bowl “Ads” Up to Big Bucks

Some heads are gonna roll…

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Today’s massive data breach is brought to us by Yahoo. Again. It’s estimated that a billion users had their personal data breached back in 2013, which is nearly twice as big as the last data breach Yahoo reported just a few months ago that happened in 2014. Now Yahoo has the dubious distinction of being the target of arguably the largest data breach. Ever. Incidentally, it wasn’t even Yahoo that discovered the breach but rather law enforcement officials. Law enforcement handed over files to the internet company that they received from a third party who said the info was stolen. Way to stay on top of things, Yahoo! Virginia Senator Mark Warner is now on a mission to investigate why Yahoo can’t seem to get its cyber-defense act together, while Yahoo is on its own mission to investigate who was responsible for the breach.  The Senator went to the SEC  back in September to ask them to investigate if Yahoo did what it was required to do by informing the public about the breach that occurred in 2014.  Warner would have preferred that Yahoo informed the public about the breach when it first happened – and NOT three years later. Sounds fair. In the meantime, there’s talk about whether Verizon still plans to acquire Yahoo’s core internet business for $4.83 billion. With Yahoo’s stock experiencing its biggest intraday drop in almost a year, that deal might go buh-bye as Verizon reviews “the impact of this new development.”  Or Verizon will just offer Yahoo a lower price to acquire it. Because, apparently it still makes strategic sense to purchase Yahoo even with two massive data breaches under its belt.

Suited up…

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Twenty states are going after big pharma via a massive lawsuit that probably wont be going away anytime soon. Mylan NV,Teva Pharmaceuticals and four other companies that manufacture generic medicines are now staring at the wrong end of a very big lawsuit. This lawsuit, by the way, is completely separate from the investigations being led by the Justice Department and other agencies. The companies are being sued for conspiring to fix drug pricing on two generic drugs: an antibiotic called doxycycline and a drug used to treat diabetes called glyburide. The suit charges that brass at the pharmaceutical companies jacked up the drug prices by setting them and also allocated markets, which they all knew was illegal. They made sure any incriminating correspondence was deleted or simply avoided written communication. When asked for a comment, one of the companies named in the suit, Heritage Pharmaceuticals Inc., conveniently blamed former executives who had since been fired.  Jeffrey Glazer, former CEO of Heritage Pharmaceuticals is actually expected to plead guilty next month. Mylan predictably denied the charges while Teva said it’s still reviewing the complaint. The others remained mum.

Ad-citing news…

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The Super Bowl is still a couple of months away but the advertisers are gearing up for their multi-million dollar thirty second spots come February 5. Rumor has it Fox is charging between $5 million – $5.5 million. GoDaddy, which skipped last year’s Super Bowl ad festivities, is coming back this year, along with Snickers, Skittles and – get this – Avocados from Mexico. Can’t wait to see how Donald Trump tweets about that one.  GoDaddy skipped last year’s festivities, apparently to focus on breaking into more international markets. That mission has presumably been accomplished as the domain services company is now available in 56 markets. Of course, it wouldn’t be the Super Bowl without beer ads and Anheuser Busch has got a whole bunch of spots lined up touting its refreshing assortment. In the meantime, regular advertisers, PepsiCo and FritoLay are sitting out this year. It’ll be the first time in ten years that viewers will not see a Doritos ad during the big game. But don’t get too choked up about Pepsico’s absence. The company will still figure prominently since its Pepsi Zero Sugar is the official sponsor of the half-time show starring Lady Gaga.

Sweet Beat for Mondelez; Coca Cola’s Earnings Still Have Some Fizz Left; Twitter Needs a Growth Spurt

Ore-oh well…

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Image courtesy of Mister GC/FreeDigitalPhotos.net

Last time Mondelez came up on this blog, it was because it made a $26 billion offer to buy Hershey Co. That deal would have created the biggest confection company. Ever. Except that Hershey Co. rejected the offer. In any case, the company still managed to beat estimates, cranking out earnings with a few ups and downs. Ultimately, Mondelez pulled down a profit of $464 million with 29 cents added per share. Unfortunately, the company also reported that sales fell a whopping 18% to just $6.3 billion. Some of those falling sales are being blamed on the strong U.S. dollar and that’s especially troublesome for Mondelez since most of its revenue is generated outside of the U.S. If you recall, Mondelez makes some of our country’s most beloved snacks including Oreos, Ritz Crackers and Trident gum. But Mondelez really would have liked to add Hershey Co. to its collection since 90% of Hershey’s revenue comes from the U.S. and the deal would have significantly increased Mondelez’s much-needed U.S. exposure. Instead, Mondelez CEO Irene Rosenfeld is going to attempt to trim $3 billion in expenses. The company also plans to bring its Milka brand of chocolate to China, a market where Hershey has struggled to make a dent and, in fact, lost money on the endeavor.

Fizzle out…

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Image courtesy of Mister GC/FreeDigitalPhotos.net

Speaking of things sweet and highly caloric, Coca Cola also reported earnings with lower than expected quarterly revenue. This time China and Latin America are the culprits. Well, partly anyway. Apparently, consumer tastes in China are switching gears from soda to more healthful choices, especially premium water. And who doesn’t like their water premium, right? Latin America is making problems for Coca Cola all because of high levels of inflation in some regions there. On the bright side, revenue in North America picked up by 2%. Too bad that’s about the only place it picked up. And it’s not just Coca Cola that’s feeling the health burn. PepsiCo is also struggling to get consumers to re-embrace it’s fizzier offerings. Coca Cola’s net income came in at $3.45 billion, up 11% from last year’s $3.12 billion.  The beverage company took in $11.5 billion in revenue with 60 cents added per share. Analysts expected $11.6 billion in revenue but 58 cents per share. However, last year at this time, Coca Cola raked in $12.16 billion, a bummer no matter how you slice it. But Coca Cola’s CEO Muhtar Kent isn’t worried and feels that his beloved soda drinkers are still out there. They’re just not drinking as much as he would like them too. The fact is, the total volume of soda consumption in the U.S. declined by 1.5% in 2015, and by .9% in 2014. Which means Mr. Kent better figure out a way to get more soda drinkers or get his current ones to kick back some more.

Grow-tesque…

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On the heels of yet another celeb controversy on its site, this time over the cyber-abuse of Ghostbusters actress, Leslie Jones, Twitter announced its latest earnings.  And no, the results did not help lift the waning spirits of investors. Apparently CEO and Co-Founder Jack Dorsey has yet to pull the rabbit out of the hat as growth was so slow it was practically backwards at a paltry 1%. Revenue came in at $602 million, which was just 20% higher than last year at this time. At least shares picked 13 cents a pop, even though analysts predicted shares would only gain a dime. Expectations, however, were for $608 million in revenue, so nobody was particularly impressed by the three cent beat. Not shockingly, the stock took a nasty fall on the news, diving as much as 14% at one point during the day, and losing as much as $1.7 billion of its market value. That leaves its current market value at $11 billion, despite its $18 billion valuation. But we’re supposed to get excited for Twitter because its got some big plans for video that its hoping will actually reverse its negative fiscal tide. Videos are Twitter’s number one ad format and so it made deals with the NFL, NBA, NHL and MLB. Of course deals with the DNC and RNC are also in place since U.S. politics has turned into a veritable sporting event. But even with all that entertainment on the platform, it’s not crazy to hope for a miracle for the one-time Wall Street darling.

French Company Goes Organic for U.S. Acquisition; U.S. Airlines Gear Up for Cuba; U.S. Banks Bond Over Brexit

Let them eat organic cake!

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Dannon Yogurt’s parent company, Danone (said with a French accent) is looking to pick up  a major U.S company that will effectively double its size. That’s assuming all goes according to plan. Danone wants to offer organic food provider, WhiteWave, purveyor of favorites like Silk Almond and Soy Milk, Horizon Milk and Earthbound Farms, $10.4 billion in cash for the fiscal pleasure of its company. That’s a 24% premium over WhiteWave’s thirty day average closing price and comes out to about to $56.25 per share. But for Danone, whose looking to make itself a bigger presence in the United States, it’s well worth it, since WhiteWave’s offerings tend to attract wealthier consumers. WhiteWave generates annual sales of about $4 billion and with this acquisition, Danone expects to see a $300 million boost in operating profit. Danone has also been struggling in other parts of the world and this acquisition would ease the burden of some of those lesser-performing markets. FYI, when companies offer to buy other companies, their offers tend be at least at a 30% premium. Because this offer was not, it theoretically means that the bidding door is still open to other offers from companies like Coca Cola, PepsiCo and Kellogg Co, to name but a few. In a regulatory filing, though, WhiteWave did graciously say that it wouldn’t solicit other offers. However, there are exceptions. Should WhiteWave go with another offer, Danone still wins because it will get a $310 million break-up fee.

Bienvenido…

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Believe it or not, Hillary Clinton wasn’t the only topic of conversation today coming out of Washington DC. President Obama announced a proposal to allow eight U.S. airlines to provide nonstop service between Cuba and ten U.S. cities, beginning this fall. This will mark the first time in 50 years that travel of this kind will be available. And all this just one year after diplomatic relations were re-established. The city and airline selections were made by the Department of Transportation and the lucky airline winners are: Alaska Airlines, American Airlines, Delta Airlines, Frontier Airlines, JetBlue Airways, Southwest Airlines, Spirit Airlines and United Airlines. American Airlines is actually no stranger to the island nation, as it has been offering charter services there since 1991. Just last year the airline made over one thousand chartered flights to Cuba, while JetBlue made over 200 chartered trips. That’s awfully welcome news for an industry that took a fiscal beating lately. The cities that can look forward to the new service had to have have substantial Cuban-American populations already in place. Hence, Florida finds itself the recipient of 14 out of the 20 daily nonstop flights, since it boasts the largest Cuban-American population. The cities include: Atlanta, Charlotte, Fort Lauderdale, Houston, Los Angeles, Miami,  Newark, New York City, Orlando and Tampa. According to Cuban officials, the number of American travelers to Cuba is up 84%, compared to last year, in just the first half of the year.  But there is still a trade embargo in place, which does include a travel ban. However, there are twelve convenient categories of reasons to fly to Cuba that you can check off should you decide to make your way to Havana any time soon.

Come together…

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It’s a fiscal kumbaya as four U.S. banks offered up their sincerest support for London following the Brexit vote. The gracious supporters include, JPMorgan, Goldman Sachs, Bank of America Merrill Lynch and Morgan Stanley. The banks agreed to help British Finance Minister George Osborne find ways to ensure that the U.K. remains the prominent financial player that it always was, pre-Brexit. And of course they all will try and find new and exciting ways to lure and retain big banking to London so that the consequences of the Brexit don’t do the country in completely. While that sentiment no doubt warmed the hearts of investors all over the world, the investment banks could not offer up as much optimism as far as the jobs situation is concerned. After all, “no one in their right mind would currently invest in Britain.” Keeping those jobs there might might be the biggest challenge of all and no one wants to make any promises on that. Especially Jamie Dimon, who had previously mentioned that around 4,000 jobs could make their way out of London. In the meantime, the French wasted no time – I mean NONE! – in announcing to the world that it would make its tax regime as enticing as possible, in a not at all subtle attempt to grab some pricey banking business from London.

Apple’s iPhone Sales Bursting at the Screens; Social Media Bets on Real-Time Ads for Superbowl; Shake Shack IPO Just Keeps Getting Tastier

And the magic number is…

Image courtesy of SOMMAI/FreeDigitalPhotos.net

Image courtesy of SOMMAI/FreeDigitalPhotos.net

Apple’s first quarter earnings shocked everybody…that is, except for Apple. It was shocking because analysts didn’t come even remotely close to the numbers Apple posted. Besides its other products, including iPads, iPods, Macs, etc, Apple sold a whopping 74.5 million iPhones taking in about $74.6 billion with earnings of $3.06 per share. Analysts estimated that, Apple, the world’s most valuable company (valued at $178 billion, by the way) would only pull in a paltry $67.7 billion and $2.60 per share. Consumers are clearly digging the bigger screens of the iPhone 6 and 6 Plus. Apple graciously waited until after the market closed yesterday to announce its earnings, following a fiscally dismal day that saw the Dow drop close to 300 points. Now keep an eye on Apple’s second quarter when it begins gracing the universe with its Apple Watch, which is rumored to be going for about $350.

It’s getting real-ly ad-dicting…

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Image courtesy of sumetho/FreeDigitalPhotos.net

Facebook is looking to pull a “Twitter” during this year’s Superbowl with “real-time ads.” For real. Just know that whatever gets posted or discussed on feeds during the “big game,” Facebook will be picking up on keywords and start sending out ads according to those posts and discussions. With 155 million daily users in the US and Canada alone, companies are hoping that this tactic will bring in some major revenue from the sheer force of this advertising tactic. Twitter, which is already a pro when it comes to “real-time ads” is even setting up a “war room” (Twitter’s term, not mine) for 13 advertisers, among them the ever-reliable PepsiCo and Anheuser Busch, in an effort to crank out on-the-spot/fly tweets, ads and other assorted means of subtle yet highly effective and entertaining advertising. Considering that NBC is raking in $4.5 million for a thirty second spot during the Superbowl, all this effort going towards digital advertising is a relative bargain.

Shake Shack-ing things up…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

As burger joint (with “joint” being a major understatement) Shake Shack gears up for its much anticipated IPO, the company just raised its IPO range to $17 – $19 per share, versus last week’s rage of $14 – $16 per share. Yes, the food is that good. The company’s valuation has now been raised to a staggering $675 million, with 63 stores worldwide and 31 in New York City alone. It’s incredibly hard to believe that restaurateur Danny Meyer started his shake and burger phenomenon out of a modest little hot dog cart in 2001, graduating to just a kiosk in 2004. But now, Shake Shack is grilling up burgers and serving up shakes in 9 countries and 34 cities. Its New York City restaurants, valued at over $10 million, are estimated to pull in over $7 million in annual sales. The other Shake Shack establishments scattered over the globe pull in closer to the $3 million range. 5.75 million shares of Shake Shack will be offered  – under the aptly named ticker SHAK, and are expected to pull in an additional $95 million.

GM Says Nyet to Russia Deliveries; Start Spreading the News: Gov Cuomo Bans Fracking; Kraft-y New CEO

Rubles the wrong way…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Russian President Vladimir Putin gave his annual hours long press conference where he discussed the plunging ruble. He said the economic recovery could take up to two years and, of course, he made sure to point his country’s finger (presumably the middle one) at the US and the EU because he says plunging oil prices and economic sanctions are to blame. Oh and also the central banks messed up too because they apparently didn’t respond fast enough to economic issues as they arose. Darn central banks! Then GM went ahead and suspended deliveries to Russia, becoming one of the latest western companies to do so. And who can blame them. After all, when currencies drop, the companies lose big bucks.  But considering GM only sold 170,000 vehicles in Russia so far this year  – it sells more than that in a single month over here – its sure not to put any major crimp in their business. Apple also shut down operations while other companies, like BMW, took the route of raising their prices to make up for the drop in the ruble rate. Why his love life came up during the press conference is a mystery, but at least now we know that Vladimir Putin is in love –  and somebody even loves him back –  according to him anyway.

Frack off…

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Image courtesy of xedos4/FreeDigitalPhotos.net

Governor Andrew Cuomo (D) has made it official: New York has become the first state to ban the ever-controversial fracking process, a decision that puts a major chink in the oil and gas industry. The process, which involves tapping into natural gas by using high-pressure water blasts and, of course, chemicals, has been under a moratorium in New York State since 2008 after it was felt that more research was needed to see just how bad the process is for the environment and our health. At a press conference, Governor Cuomo handed the reins over to health and environmental officials who said the issues are too great to allow it to happen and conveniently had several studies on hand to back up their claims. Now if they could just do something about those traffic jams…

Nothing cheesy about it…

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Image courtesy of digitalart/FreeDigitalPhotos.net

In a move that shocked analysts, who generally make it a habit of predicting things, Kraft CEO Tony Vernon, who is but 58 years young, announced that his retirement from the company will officially take place on December 27. Vernon has been at the post since October of 2012 and will stay on as an adviser until March. His replacement will be John Cahill, who already has Pepsico  gracing his resume. Kraft, the intrepid force behind Velveeta cheese and the ever-malleable Jell-O, said that it needs to make big changes quickly if it wants to keep up with the constantly changing needs of the food industry. Sounds fair, considering Kraft saw an 11% drop in its third quarter profits.

 

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…

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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?