Add the Military to Wells Fargo’s List of Haters; Tesla’s Not Down With Discounts; Beverage CEO’s Earnings Lose Fizz

And the list of offenses just keeps growing…

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As Wells Fargo CEO John Stumpf continued to get a much-deserved beating by Congress today, the bank now finds itself staring down the wrong end of a Justice Department sanction. The reason? It seems Wells Fargo improperly repossessed cars owned by…wait for it…members of the military. That’s right. Wells Fargo was screwing over the very folks who defend this country.  Is your stomach done churning yet?  The bank apparently violated the Service-members Civil Relief Act and both Federal prosecutors and the Office of the Comptroller of the Currency have big plans for the bank that have nothing to do with stock options and hefty bonuses. It’s borderline-disturnbing that Wells Fargo proudly proclaims on its website that it has “a history of making banking easier for our servicemen and servicewomen.” If found guilty, Wells Fargo could end up forking over an estimated $20 million in penalties. That would be in addition to the $185 million that Wells Fargo was fined for opening up those two million fraudulent accounts.  Sadly, Wells Fargo isn’t even the first bank to repossess vehicles from service people who were delinquent on their loans. Banco Santander had to pony up $9 million last year for similar actions.

Blame it on Reddit…

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Looks like the discount days are over at Tesla where CEO Elon Musk sent out an email to his employees telling them to stop the practice. Apparently, Tesla has a “no negotiation no discount policy” that was in effect since day one, ten years ago when consumers could first start purchasing the battery-operated vehicles. Musk isn’t even into discounts for employees – which I think is a bit unfair. Just saying. No discounts even when the average vehicle discount in the U.S. is just under $4,000. Of course, discounts can still be applied to floor-model vehicles, test-drive vehicles and vehicles that were damaged during delivery. But for brand-spankin’ new Model S cars, which sell – or should anyway – for about $100,000, don’t even bother calculating their costs other than what the sticker price says. This whole hoopla came about because someone on Reddit posted a question about discounts for Tesla vehicles. The responses to the question did not sit well with Musk, or with analyst Brad Erickson of Pacific Crest Securities. In a research note, Erickson suggested that Tesla was getting loose with discounts in an effort to sell more cars for its third quarter – of which 22,000 were delivered. That figure, by the way, is a 90% increase over last year at this time.  But considering that Tesla has posted an operating loss for 14 consecutive quarters, I suppose there some logic at hand.

Fizzy logic…

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Nick Caporella, the CEO behind the fan favorite drink LaCroix, probably isn’t felling too bubbly right about now. Glaucus Research Group just released a very unflattering report about the Florida-based company, basically accusing it of cooking the books. The report also says Caporella used false invoices and other forms of creative accounting to inflate earnings when they weren’t quite where he wanted them to be. In all fairness, Glaucus has a short interest in the company, in the form of 2.26 million shares.  If National Beverage’s stock falls, Glaucus stands to gain a sizable chunk of cash. And that’s exactly what happened as National Beverage’s stock took an 8% hit today despite calling the report “false and defamatory.” It seems some of Glaucus’ research came from a failed 2012 lawsuit from a former associate.  In any case, shares of National Beverage were up 58% in the last twelve months  – that is, up until its recent drop. Interestingly, the soft drinks National beverages sells, including Faygo and Rip It energy drinks, sell for 40% less than Pepsico’s offerings, yet both companies have the same reported operating margin. Weird, right?  Another unusual tidbit is that despite National Beverages major increases in profit and revenue, its advertising and shipping costs remained flat, according to Glaucus’ report at least. Last month the company reported first quarter earnings where revenue was up 17% to $217 million and profit was up 69% to $29 million. Not bad for a company that basically sells fizzy flavored water and Shasta – remember that one? In the meantime the SEC is staying mum on the subject and the stock closed at $42.67.

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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?