Lyft and Waymo = Carpool; Bud Spending $2 billion to Up Its Game; AIG Bets Big on Latest CEO

Self-less…

ID-100350402

Image courtesy of fantasista/FreeDigitalPhotos.net

In case you were having trouble envisioning a world with driverless cars, you might want to check out Alphabet Inc.’s company Waymo. Waymo, a self-driving car company,  has just teamed up with Lyft, and that should be enough to make Uber more than a little nervous. You might be wondering why a company owned by Google even needs a much smaller company like Lyft for a partnership. But believe it or not, there’s a little quid pro quo going on because since Lyft has the dubious distinction of being the second largest ride service company, it will allow Waymo’s technology to reach even more people than without it. Isn’t that just beautiful? Uber, on the other hand, is looking to develop driverless technology on its own. If you recall, Waymo sued Uber back in February, alleging that Uber stole Waymo’s self-driving technology to build its own fleet.  But with the way things are going for Uber lately, it might be more prudent for the embattled ride-sharing company to focus on its current crop of legal and publicity challenges instead of driverless cars. For the time being anyway.  By the way, Lyft’s deal with Waymo is not exclusive. Which is super important considering that GM is a big Lyft investor and already has its own partnership in place to develop self-driving cars. It’s like legit double-dipping and everybody wins. In fact, come 2018, Lyft and GM will be set to deploy and test thousands of self-driving cars. Yikes!

Competitive beer…

ID-100434168

Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

It might be hard to believe but the King of Beers is not looked upon as the royalty it once was. And so, its parent company Anheuser-Busch InBev NV is plunking down $2 billion to try and fix that issue. The plan is to make a substantial, lucrative foray into new categories, while at the same time boosting its flagship brands which have been staring down the wrong end of increased competition.  The money will be spent over the next four years, using approximately $500 million per year. In case you were thinking that $2 billion seems like an awfully bloated  – no pun intended – number to spend on improving a beer brand, consider that beer is a more than $107 billion industry and no self-respecting beer company wants to lose ground in a market like that.  And make no mistake, beer has been losing ground lately with not as much of it being consumed like in years past. Hard to believe. I know, but various types of other alcoholic beverages have been flooding the market in recent years and consumers are digging them. Which leaves companies like Anheuser-Busch scrambling to reclaim its foamy territory.

No pressure or anything…

ID-100531843

Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Maybe the seventh time’s a charm for AIG, which just announced it’s coughing up $12 million – and then some – to pay its newest CEO, Brain Duperreault. By “then some” I refer to an additional 1.5 million stock options and a $16 million pay package all based on the hope that Duperreault will finally be the one to turn AIG around. Did you catch that? He’s getting all that and he hasn’t sat at his new desk yet. The last CEO, Peter Hancock, left in March because he wasn’t feeling the love, or rather investor support, including from the one and only Carl Icahn. But Brian Deperreault just might have what AIG’s been looking for all these years, well at least since 2005. He’s no stranger to AIG, having worked there as a deputy way back when. He’s coming over from Hamilton Insurance, and before that he was at Marsh & McClennan Cos. earning solid reputations at both firms. As for his first order of business: achieve stability in a company that has seen too many high-level departures, four straight quarters of losses and high claims costs. Good luck with that one, Mr. Duperreault. You’re gonna need it.

Yahoo’s Marissa Mayer’s Expensive Goodbye; Intel Revs it Up on Self-Driving Cars; Another Sporting Goods Chain Throws in the Towel

Yah-who?

ID-100120478

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Well the good news is that Marissa Mayer will get to add $23 million to her bank account. And who wouldn’t like to see their bank account get a deposit like that? The bad news is that the $23 million is part of her severance package from Yahoo. At least that’s what a regulatory filing indicated. And no one seems to know – and if they do, they are not talking – whether Ms. Mayer will be staying with the remaining entities of Yahoo that Verizon is buying. The parts of the company that Verizon is not buying will eventually be formed into a new company called Altaba, to be headed by Thomas J. McInerney. If you recall, Verizon got to cut $350 million from the final purchase price of $4.5 billion because of Yahoo’s fiscally disastrous data breach. Verizon’s feelings were that Yahoo execs didn’t quite “properly comprehend or investigate” those breaches that affected hundreds of millions of people. At this point, feel free to get a little more colorful in rephrasing that last bit with your own words and thoughts. Especially if you are a Yahoo account holder. The data breach also cost Ms. Mayer her own 2016 cash bonus of up to $2 million. However, to her credit, she did graciously gave up her bonus and equity grants for 2017.

Start me up…

ID-100212699

Image courtesy of suphakit73/FreeDigitalPhotos.net

Intel just threw down over $15 billion to buy Israeli tech company, Mobileye NV.  What,  might you be wondering, is so special about this particular tech company that had a chip-maker eager to plunk down a 30% premium of $63.54 per share? Self-driving cars, which you may or may not realize, are all the rage these days. And since Mobileye already commands 70% of the global market for driver-assistance and anti-collision  technology, this acquisition seemed like an awfully prudent way for Intel to break into that industry in a very big way. So I think we can all agree that even though this was Intel’s most expensive purchase of any single company, it was totally worth it. I suppose Mobileye would have to agree as well, since its own stock went up a very substantial 30% on this latest news.

Another one bites the dust…

ID-100423884

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Just when you thought you’d seen the last of the sporting goods chains bankruptcies, along comes Gander Mountain to remind us that, alas, those days are far from their bitter end. The Minnesota-based company will follow the unfortunate fiscal footsteps of Sports Authority, Golfsmith and about ten other retailers from the last year or so, and shutter over 30 of its 162 stores. Fierce online competition led to less traffic in stores and too much merchandise on the shelves. Around 1,300 employees will be affected by the closures, but will apparently have an opportunity to be relocated to locations that aren’t floundering. Yet, anyway.

 

GM’s Big Lyft-off; Blame it on China; Smoking Gun Stocks

Baby you can drive my car…

ID-100212699

Image courtesy of suphakit73/FreeDigitalPhotos.net

GM’s gone and plunked down a whopping $500 million to get in on some ride-sharing action. The lucky recipient of this half billion dollar prize was none other than Über’s biggest competition: Lyft. Besides this being one GM’s biggest moves ever, this latest development also marks the biggest move by an automaker in the ride-sahring industry. Plus the car company gets a nice comfy seat on the Lyft board. President and co-founder John Zimmer says Lyft plans to use the $500 million to help build brand awareness, lest you find yourself unaware of Lyft and its lofty endeavors. Lyft’s valuation is now priced at a cool $5.5 billion. Nothing to scoff at, yet it still pales in comparison to Über’s mammoth $62.5 billion valuation. Lyft plans on developing a line of self-driving cars, the perfect addition, it would seem, for a ride-hailing/sharing company. The idea is to be able to call upon these driverless vehicles on demand. And apparently, the race to develop self-driving cars is all the rage right now in Silicon Valley.

Drop it like it’s hot…

ID-100181521

Image courtesy of suphakit73/FreeDigitalPhotos.net

It’s all China’s fault that 2016 got off to a rocky start on Wall Street today. Lousy economic data, which included weak demand for Chinese manufacturing, set a downer of a tone for 2016’s very first day of trading.  Shares of companies all over the  world plunged, including here, where the Dow dropped taking the S&P and Nasdaq with it. U.S. listed shares of Chinese companies also took a hit, even investor darling and “It” stock Alibaba Group Holdings Ltd. But it was Chinese markets that dropped a staggering 7% with Shanghai’s Composite Index hitting its lowest levels in three months. Chinese authorities whipped out the country’s “circuit breaker” mechanism, an idea that must have sounded at good some point, but maybe not so much anymore. Basically, if the the CSI300 (a Chinese index) drops or rises 5% during the course of the trading day, then trading stops automatically for fifteen minutes. But after that fifteen minute period, if the CSI300 continues to drop or fall 7%, then trading gets suspended for the whole rest of the day. Some people think this “circuit breaker” deal is overkill and only making China’s fiscal issues worse.  Since June, Chinese authorities have been trying to figure out ways to restore investor confidence in the nation’s stocks. Analysts, however, say part of the big sell today off had more to do with a 6 month lock-up that just ended. Authorities made it so that institutional investors couldn’t sell off certain stocks for the last six months. The idea was to give a “boost” to Chinese indexes. But did it work? Hmmm.

 

And in other news…

ID-100155928

Image courtesy of suphakit73/FreeDigitalPhotos.net

While plenty of stocks on U.S. indexes took a hit (because of China, as you may recall from a few sentences ago), one industry that actually surged today was guns. Whatever your position on firearms, the fact is that when tragedy strikes and calls for tougher gun laws are sounded, plenty of Americans scramble to get their hands on even more guns. It’s debatable whether the trend is because people feel safer for possessing one or because of the fear that the government attempt to limit constitutional rights. Sure, calls for stricter gun control came crashing down following attacks in Paris and San Bernardino. And sure, Barack Obama has big executive plans to curb some constitutional rights in the near future, but oddly enough, that only sends consumers out to stock up on their firearms supply. According to the  National Instant Criminal Background Check System, there were 38% more background checks this December than December 2014. Want some more numbers? Smith and Wesson Holding Corp. saw particularly strong sales towards the end of the year with its shares getting a nice boost, while Sturm, Ruger & Co. pulled down a 52 week high last week.