Amazon’s Kindness Almost Knows No Bounds; Uber Cleans House; Crew-Cut: CEO Drexel Waves a Preppy Goodbye

Yep, they went there…

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It’s the American Dream. Well, for Amazon anyway. Rather than worry about disenfranchising an entire portion of the population that can’t comfortably afford Amazon’s Prime subscription service, the e-commerce giant is now offering this highly esteemed membership privilege for a 50% discount to those on government assistance. All it takes is a valid Electronic Benefits Transfer card. Because why should the fact that someone is receiving government assistance stand in the way of their Amazon shopping experience, right? It is incredibly thoughtful of Amazon to think of those less fortunate by reducing the cost of subscription for them. However, if it were not to Amazon’s fiscal advantage, then this latest initiative might not have been unveiled. That fiscal advantage comes in the form of a competitive edge over Walmart, whose low prices have attracted the very countless customers that Amazon is trying to woo with this new incentive. After all, studies have shown that once customers sign up for Prime status, they tend to beef up their orders. So, we’re talking a win-win for Amazon. And a lose for Walmart.

Job openings…

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Looks like karma may finally be catching up with some folks over at Uber, as the ride-sharing company just fired 20 employees over sexual harassment claims. Apparently 215 claims were leveled against these 20 individuals, which sort of begs the question: Was there anybody left at Uber who didn’t get sexually harassed? The investigation was conducted by law firm Perkins Coie and disturbingly enough, it found that no action was even taken in 100 of those claims. Oh, and there are still even more claims being investigated.  In addition to the 20 terminated fiends, seven other employees received written warnings, while 31 more employees need to get “special training” to teach them how not to harass people and behave like stupid, thoughtless destructive pieces of trash. CEO Travis Kalanick launched the investigation back in February after a former Uber employee named Susan Fowler wrote in a blog post about her personal experiences of sexual harassment and gender bias at the company. However, when asked about the issue back in May, Uber’s head of HR, Liane Hornsey, said it wasn’t an issue that had come up. Especially if you had your head firmly entrenched in the sand, of course.

And that’s a wrap…

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After 14 years, J. Crew’s Mickey Drexler is calling it quits and handing over the reins to West Elm CEO James Brett. While Drexler may be out as CEO, he’ll still stay on as Chairman. And why not? After all, he owns 10% of the preppy apparel company. Drexel decided to step down from his role after declining sales – 6% in just the last year – led to a whole bunch of other problems including restructuring, layoffs and the departure of its pseudo-celebrity, high-profile creative director, Jenna Lyons. Not that any of that was entirely Drexel’s fault. Only a bit of it, some might argue. Because apparently the problems and challenges he faced were industry wide for apparel companies in general, as so many of them continue to struggle to get a leg up on fast-fashion, affordable competitors like Zara and H&M.

 

Trump Must Say Buh-bye to DC Namesake Hotel; Amazon’s Latest Tricks Up its Sleeve; The Urge to Merge: Alaska Airlines and Virgin America

Give it up…

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The official word out of Washington DC and, more importantly, the General Services Administration (GSA), is that Donald Trump has to give up his beloved hotel that is housed in the Old Post Office, just a few blocks from the White House. It’s the one that he opened back in September and has been the site for so very many Trump protests. That particular building is especially off limits to the President-elect because it is leased from the Federal government. The GSA, in case you were wondering, manages property owned by the Federal government. So it stands to reason that it has a say in what Donald Trump can and can’t do in this particular situation. Incidentally, Federal law does not exactly prohibit a president’s involvement in private business. However, members of Congress and lower ranked executive branch officials cannot. So weird, huh? As for a president’s assets, those have been typically put into blind trusts in an effort to avoid any appearance of impropriety – which seems logical. The owners of these blind trusts have no knowledge of how the assets are being managed and are typically managed by independent third parties. Donald Trump’s daughter, Ivanka, has apparently been dealing with the GSA to resolve this particular issue. However, her involvement is sort of iffy, according to some, since she is an official member of Trump’s transition team.

Droning on and on…

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Amazon’s unleashing plenty of big news today while Jeff Bezos is kicking up his heels at Trump Tower, trying to make nice with the President-elect. First, the online retailer giant announced its first drone delivery, called Prime Air, which took place December 7 in the U.K. A Fire TV device, along with a bag of popcorn found its way to its buyer just thirteen minutes after the order was made. The drop was made in an area in Cambridge that has been authorized for drone testing. So far, two customers have access to this new delivery method. But in the coming months that number is expected to grow by leaps and bounds. The drones fly no higher than 400 feet, are guided by GPS and can carry up to five pounds of merchandise. But best of all, for Amazon anyway, is that drone delivery of small packages are an excellent way to keep delivery costs really low. How does a dollar a drop sound?  Then, Amazon also announced the launch of its very own live streaming video service available just about everywhere. Except China. That must warm Donald Trump’s heart a little.  In any case, the new service is giving Netflix   – which also has yet to conquer China – some very unwanted competition. By the way, Amazon’s launch was eerily reminiscent of Netflix’s global launch almost a year ago. Just saying. The new service, aptly called Prime Video, would get bundled with your average Amazon Prime subscription. The idea is to get people to sign up for Amazon Prime service and from watching all of Amazon’s amazing (it really is) programming, viewers will then have an insatiable urge to buy even more stuff on Amazon. It’s meant to be a win-win. Just not necessarily for your bank account. In Amazon’s defense, however, the company wants to make sure that you’re getting a lot of value from your annual Prime subscription. I can live with that.

Take wing…

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The Alaska Airlines/Virgin America merger is in effect with the official blessing from the U.S. Justice Department. But to be clear, Alaska Airlines is actually buying Virgin America – which has only been around since 2007 –  for about $2.6 billion. The total cost, after all is said and done, is expected to hit closer to $4 billion.  Alaska Airlines is currently the sixth biggest airline operator in the United States, while Virgin America holds steady at number eight. But once these two babies unite, they’ll become the fifth largest airline in the industry. The top four airlines, however, still control 80% of the country’s domestic market. At least the merger will allow for the new entity to become a major player in the highly competitive West Coast region. Combined, the two airlines have around 40 million customers and have so far this year generated $2.4 billion in revenue.

GM and Ford Release Their Very Different Earnings, Morgan Stanley Feeling “Settled” and Amazon’s Confusing Earnings

Compare and contrast…

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Image courtesy of arztsamui/FreeDigitalPhotos.net

 

Ford and GM announced their second quarter earnings. Guess who fared better? Here’s a hint: Recalls. GM’s profits got massacred by its massive recall issues in its second quarter pulling in only $190 million. While that seems like nothing to scoff at, it is when it’s an 85% drop from the same period a year ago. Ford pulled in a profit of $1.31 billion –  a 6.3% increase. GM on the other hand had a $1.2 billion charge over its recalls – about 22 million of them. In the meantime, the company has set aside a fund with $400 million in it (so far) for victims of the faulty vehicles while it undergoes both Federal and Congressional investigations. But not Ford, whose numbers were lifted with a little help from Europe – which saw a profit for the first time in three years.

Case closed?

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Image courtesy of phasinphoto/FreeDigitalPhotos.net

Nothing like a $275 million settlement with the SEC to put a damper on the day – well for Morgan Stanley, anyway. But after all, the settlement was over fraud allegations, never a flattering thing for a company, especially when it’s the second largest investment bank in the country. Apparently Morgan Stanley committed these fraudulent acts over some mortgage-backed securities when it misled investors about the delinquency status of loans. It gets a bit more convoluted than that but basically it’s a big Federal no-no when banks don’t bother to disclose delinquency information. The SEC said Morgan Stanley did it on purpose so that it could get out those sub-prime loans to borrowers with, shall we say, sub-prime credit. The $275 million will be paid back to those investors who lost money over Morgan Stanley’s allegedly fraudulent actions.

Prime miss. Or prime diss? Hmmm.

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Image courtesy of franky242/FreeDigitalPhotos.net

Amazon is not having a good day, we assume, as it came out with earnings which were a colossal Wall Street miss. What does a colossal miss look like? Well, when a giant online company like Amazon posts $0.15 earnings per share when Wall Street expected a $0.27 per share gain then you’ve got yourself a colossal miss. However, many experts (me not being one of them – an expert, that is) attribute that loss to the launch of its new “Fire” smartphone which makes its auspicious and apparently very expensive debut on Friday. Also, it should be duly noted that the company also pulled in $19.34 billion in sales – a 23% growth, so investors and those “experts” aren’t too worked up over that earnings per share miss. If you do find yourself jonseing for one of those new Amazon “Fire” phones it’ll only set you back $649, that is, if you don’t want a contract. If you don’t mind the whole strings attached/contract concept, you’ll only need to shell out $199 for AT&T to provide you with the phone. Either way, Amazon’s going to throw in a one-year “Prime” membership.