Deutsche Bank CEO’s are Leaving Early and No One is Shedding Tears; McDonald’s Numbers Not Totally Horrible; Smack Talk at the G7 Summit

You’re Fitschen kidding me…

Image courtesy of biosphere/FreeDigitalPhotos.net

Image courtesy of biosphere/FreeDigitalPhotos.net

In case you were wondering how Wall Street feels about Deutsche Bank’s outgoing co-CEO’s Anshu Jain and Juergen Fitschen, then just look at the company’s stock price. Shares of Deustche Bank gleefully shot up over 8% at one point, on the news that the two men would be ditching their digs even earlier than planned. However, those gains weren’t just from the sheer joy of those early departures but also because investors totally dig their replacement, British banker John Cryan, who also happens to have a pretty decent track record. Cryan is what the cool kids call a “takeover specialist” which is something Deutsche Bank could use now more than ever seeing as how Jain and Fitschen couldn’t seem to stem the tide of legal issues that have been plaguing the bank, including a massive $2.5 settlement claim the bank had to fork over after some traders very rudely – and illegally, I might add – rigged some benchmark interest rates. In fact, most of Deutsche Bank’s troubles and scandals seemed to to come out of its investment bank, which coincidentally, was/is under Jain’s watch. The question remains as to whether or not Cryan can pull the largest German bank out of its funk. Except, first he’s got to come up with a plan. At least he speaks German. So score one for Cryan.

You deserve a break today…

Image courtesy of  atibodyphoto/FreeDigitalPhotos.net

Image courtesy of atibodyphoto/FreeDigitalPhotos.net

Things at McDonald’s weren’t nearly as bad as everyone thought they were going to be. They weren’t great but we’ll get to that. The Golden Arches saw same store sales drop .3% , which is definitely not good. However, at least those sales didn’t drop by .9%, the figure expected by all those super-educated analysts. To that I say booyah.  And then there was Europe. While everywhere else on the planet McDonald’s saw sales fall, McDonald’s needs to give much danke to Germany, France and the UK who showed the burger chain some major love in the form of a 2.3% gain. Analysts only expected Europe to bring in a tres  modest .6% gain. So you see, Chipotle, Panera and Shake Shack haven’t taken over the fast-food world. Yet. McDonald’s is in the midst of bringing about a “turnaround plan” which apparently includes offering breakfast all day. Except that’s only in – where else? – Southern California. Also, as part of the plan to reclaim its rightful place in the fast-food kingdom, CEO and President Steve Easterbrook has big lofty plans to rebrand McDonald’s as “a modern, progressive burger company.” Did you get all that?

Back at the G7 Summit…

Image courtesy of bplanet/Freedigitalphotos.net

Image courtesy of bplanet/Freedigitalphotos.net

There seems to be a bit of confusion coming from the G7 Summit. A French official told reporters that President Obama said the strong dollar is a “problem.” Then, the dollar slid against the euro. However, President Obama insists, “I did not say that.” But, still, the dollar still slipped, for the first time in three days, against the euro. In any case, other important stuff was presumably discussed at the conference where world leaders from the United States, Germany, France, Britain, Italy, Japan and even Canada talked about fiscal issues that are plaguing the world. But who doesn’t love a good “he said, he said,”  especially during a super important meeting between the world’s most powerful people. I could really see this one playing out on South Park.

Avon and Wall Street Get Punk’d But Ashton Kutcher’s Not Behind This One; Shake Shack Nails Some Juicy Earnings; Kohl’s is Just Not Good Enough

It’s not the Avon Lady…

Image courtesy of winnond/FreeDigitalPhotos.net

Image courtesy of winnond/FreeDigitalPhotos.net

So here’s a weird thing that happened on Wall Street today. Trading for the Avon company, based in the U.K. (no that’s not the weird thing) was halted three times all because of a prank filing. It’s like a prank call. Only incredibly stupider and much more serious. Like the kind of serious that is going to require legal representation once the moron who did it is caught. Some person/entity group, calling itself PTG Capital Partners, filed an $8 billion takeover bid with Federal regulators for the company, once famous for its now defunct door to door sales ladies. If you thought $8 billion seems like a lot for Avon, you aren’t the only one, because that comes out to more than triple its stock value. When the SEC posted this filing to its website, shares became volatile and trading stopped – more than a couple of times. Beside the fact that the filing was one big grammatical mess – a major red flag – calls made to the phone number listed went unanswered – another major red flag. A Texas address for the firm’s attorney, Michael Trose, was also listed and while the address is real, the building’s manager said there was never any tenant by that name – yes, red flag number three. Even though Avon has had three straight years of losses, the stock was a bit higher, presumably from all the drama surrounding it today.

Would you like fries with that?

Image courtesy of rakvatchada torsap/FreeDigitalPhotos.net

Image courtesy of rakvatchada torsap/FreeDigitalPhotos.net

After brutally beating its earnings, Shake Shack shares (alliteration, anyone?) are up today and at one point took a 10% leap. The burger un-joint pulled down revenues of $37.8 million, a 56% increase with a 4 cent per share profit, when analysts only expected the company to pull in 3 cents per share and $34 million in revenue. Maybe those “analysts” should start taking their lunches at Shake Shack and see for themselves. If you recall, the Shake Shack IPO was priced at $21 and as of today, the stock is more than triple that, coming in close to $70. While the naysayers scoff at the high value of the stock, its earnings seem to justify the price of the shares. So there. Even diners outside of New York City are digging the grub at the eatery as evidenced by a 12% increase in same store sales. But it wouldn’t be right if we didn’t mention how some of those impressive earnings were helped by the fact that Shake Shack raised its prices on a few “select” items. Expect to see more “Shacks” as the company has plans to open up 15 more locations, with five of those outside of the U.S. So I guess you could say Shake Shack nailed it. This quarter anyway.

On the other hand…

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Image courtesy of jscreationzs/FreeDigitalPhotos.net

Kohl’s took a Wall Street beating today on the news of its earnings miss. Shares of the retailer tumbled all the way down 10% at one point.  The company, which has over 1,100 stores, actually made a lot of money this quarter. Way more money than Shake Shack, in fact. The company pulled down $4.12 billion in sales and took home a $127 million profit at 63 cents per share when analysts only called for a 55 cent profit. Sounds impressive, right. But for those finicky analysts, those numbers, like my grades in high school, were just not good enough. You see, all those billions and millions that Kohl’s raked in were not enough to offset the fact that its sales were up only 1.3%. The harsh reality is that those very same finicky analysts expected the company to earn sales of $4.19 billion. Hence, the drop in price of shares.

Shake-y Shares for Shake Shack; Alibaba’s Snapchat-ty Investment; Lumber Liquidators Has Something to Prove

Shake Shack it off…

Image courtesy of joephotostudio/FreeDigitalPhotos.net

Image courtesy of joephotostudio/FreeDigitalPhotos.net

It was the food IPO to watch with 63 locations all over the world and growing. But just a few months later the enthusiasm for Shake Shack has lost some of its flavor. Fourth quarter revenue for the “fast casual” burger joint was up 51% to $34.8 million when analysts only expected $33 million – definitely nothing to balk at. Even same store sales went up 7.2% when analysts forecasted a much more modest 4% increase. So what exactly caused shares of the company to take an 8% dive in after hours trading yesterday? Hmmm. Could it be that bigger than expected net loss of $1.4 million and 5 cents per share? Analysts expected the company to take a loss for the big tax charge related to its auspicious IPO. Problem is, those same analysts figured the burger chain would only lose 2 -3 cents per share. But nobody on Wall Street or elsewhere seems too worried as Shake Shack has big expansion plans and anticipates it’ll pull in revenues for the year between $159 – $163 million.

Things that make you go hmmm…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The big news coming out of Alibaba is all about the big investment it just plunked down on Snapchat.  As in $200 million big.  The Chinese e-commerce giant, which generates more revenue than Amazon and eBay combined, just upped Snapchat’s valuation to $15 billion, all because of this latest cash infusion for the magically vanishing messaging app. This particular move has got everybody wondering exactly why Alibaba chose to do this, especially because Snapchat is banned in China. Yeah you read that right. Might it be a way for the Chinese company, who had the biggest-ever US IPO, tap into overseas markets? Some experts think that might be the case. Or perhaps it has something to do with Alibaba’s lack of success with a messaging app? After all, Snapchat boasts 100 million users that send out 700 million vanishing messages…a day. Incidentally, Tencent, Alibaba’s biggest rival in China, also invested in Snapchat back in 2013. But after all, what’s $200 million to Alibaba, a company that already sees annual revenues of $11 billion.

Who? Me?

Image courtesy of  Sira Anamwong/FreeDigitalPhotos.net

Image courtesy of Sira Anamwong/FreeDigitalPhotos.net

Lumber Liquidators stands by its products and adamantly rejects a recent “60 Minutes” report that its flooring contains high level of formaldehyde. To prove it, they’ll even pay to have questionable floors tested. Apparently the test kits are the same ones used by the Federal government, though what significance that has is something I cannot answer. Even though Lumber Liquidators calls the report “sensationalized” with  “little context,” when its products were tested by “60 Minutes,” some of the flooring did, in fact, not meet California’s standards of acceptable levels of formaldehyde. However, once again, Lumber Liquidators rejects that claim. Same store sales, by the way, plunged 13% in the nine days after the report aired. If a consumer purchased flooring that, when tested, indicates the presence of high levels of formaldehyde, Lumber Liquidators has allegedly offered to pay…for more testing. And if that further testing indicates, once again, high levels of formaldehyde, Lumber Liquidators has allegedly agreed to eat the cost for new flooring. Imagine that. Lumber Liquidators, interestingly enough, has plans in place to open about 30 new stores. These new stores will presumably not be stocked with formaldehyde-laced flooring. And while shares of the company are still down from what they were before the piece aired, they actually did rebound a bit in light of all its efforts to counter the report.

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…

Image courtesy of sumetho/FreeDigitalPhotos.net

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.

Is Xiaomi the Next Big Thing to Hit the Smartphone Scene?; Russia’s Ruble in the Rubble; Shake Shack Shaking Up Wall Street

Third’s the word…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Here’s a riddle for you: If Samsung is the number one smartphone maker in the world, with Apple perched at the number two spot, then who has taken third? Hint: It’s not LG. Or Nokia. Or Motorola. Or… In fact, the number three smartphone maker in the world has yet to reach our shores, even though the company’s got a $45 billion valuation and is slated to become the most valuable IPO. Ever. In case you haven’t figured it out – and it’s okay if you didn’t –  I am talking about Chinese smartphone maker Xiaomi. The company which, just pulled in another $1.1 billion in funding, is number one in the mammoth Chinese market. It also happens to be the fastest growing smartphone maker and the most valuable start-up in the world right now (yes, even more so than Über and Pinterest, if you can believe it). And by fast I mean the company’s sales are up 211% in the third quarter, having taken a 5% bite out of the market share. Xiaomi, whose Mi4 smartphone coincidentally, bears a striking – make that very striking – resemblance to the iPhone, actually makes most of its money from apps and add-ons, and not from the phone itself. It also apparently has some nifty marketing strategies, though I can’t weigh in on that one. Xiaomi is currently focusing on branching out into places like Indonesia, Russia and Mexico with no immediate plans to come to the US, which clearly hasn’t been a problem for it.

Is that a recession I smell…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Russia’s not having a very good week. News is out now that the economy there shrank for the first time in five years. The GDP fell by .5% with the Russian government saying that next year the GDP could go down by as much as 4%. How do you say “yikes” in Russian? The ruble is continuing its slide,  falling the most in two weeks, and is about 40% weaker than the dollar. It’s down by about 70% since the beginning of the year. Of course the international sanctions imposed on Russia by other countries who were not cool with its incursions into the Ukraine are being blamed. And, of course, Russia then decided to block imported food – a move that has not been good for anyone on either side of the issue. Then there’s the price of oil which keeps dropping and dropping and…well, it’s no fun to see oil numbers drop if you happen to be the largest energy exporter and well, that’s exactly what Russia is.

Yeah, it’s that good…

Image courtesy of KEKO64/FreeDigitalPhotos.net

Image courtesy of KEKO64/FreeDigitalPhotos.net

Apparently the Shake Shack is so good that Wall Street will get to partake of its delicacies in the form of a $100 million IPO that the company just filed today. Conceived by restaurateur Danny Meyer, the chain will be listed on the New York Stock Exchange under the aptly named ticker symbol SHAK. The company began as a single “shack” in New York City’s Madison Square Park and quickly grew to 63 locations…worldwide, with half of those operated by licensees. Shake Shack reported sales of $140 million in 2013, a scrumptious $81 million gain from the year before. Investors are awfully curious to see how Shake Shack will fare considering the mixed results the market has seen from food companies like perennial fave Chipotle to less than stellar performer Noodles & Co. If that’s not enough to whet your IPO appetite, then how about the fact that they pay an average hourly wage of $10.70 with health benefits and paid time off?