Branson’s Bexit Woes; IKEA is the Latest Company to Issue Recall; Airbnb Takes on San Francisco

Pound it out…

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Add Sir Richard Branson to the ever-growing list of Brexit haters. And he’s right to be hating on it. Besides the fact that global stocks took a $3 trillion hit on Friday and Monday,  Branson estimates that his own company, the Virgin Group, already lost a third of its value. Branson went on to say that, “We are heading towards a disaster. I don’t believe the public realized what a mess their vote would cost.” And considering he’s worth close to $5 billion, he probably knows a thing or two about the downsides of the Brexit. He’s convinced Britain is on the fast lane to recession territory and thinks a second vote is in order as 4 million people have already signed a petition urging a new referendum. Ironically, the billionaire has no voting rights in Britain since he doesn’t actually live there but rather in the British Virgin Islands. However, his company employs 50,000 people in the United Kingdom, most of whom do have voting rights, presumably. I hope none of them were foolish enough to vote in favor of the Brexit. I’d hate to be “that guy.” In any case, Branson feels that the British public was not adequately informed about the potentially disastrous consequences. He warned that thousands of jobs would be lost and even had to put the kibosh on one of his own deals that was in the works.

 

No words…

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There’s yet another recall in effect and this time it doesn’t even have to do with Volkswagen. Sadly, this recall comes courtesy of IKEA, which had to recall some 29 million dressers that caused the deaths of six children, all under the age of four.  Another 36 have been injured. The most recent tragedy occurred as recently as this past February. These dressers included six styles from the company’s MALM line, that cost between $70 and $200, and were manufactured between January 2002 and January 2016. The company will issue full refunds for the furniture in question but is also offering wall-anchoring repair kits and even free one-time installations upon request should consumers wish to keep their dressers. Just 30,000 repair kits have been issued which represents but 1% of the total amount of dressers that were sold and still require anchoring. Regulators had called the dressers unsafe. The recall affects about half of the dressers that IKEA sells in the US.

Home bitter home…

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It’s Airbnb v. the city of San Francisco, with the home-sharing site charging that the city is violating the “Communications Decency Act, a federal law that prevents the government from holding websites accountable for the content that is published by their users.” It all started when San Francisco lawmakers decided to impose tougher rules for Airbnb and friends, which stipulated that the site could only post listings from renters registered with the city. The problem is, according to Airbnb, home-sharers were often confused by the process, which continues to be mired in the usual mess we call bureaucracy, and takes months to complete – months that could be used earning additional incomes from their homes. San Francisco wants Airbnb to enforce its rules, that listers be removed from the site unless they are registered. If Airbnb does not comply, the company could face fines of up to $1000 per day and even jail time for some employees. Mind you, only 20% of listers who rent out their homes for less than thirty days are registered with the city. Lawmakers want Airbnb to do its dirty work for them and remove the remaining 80% of listers from the site. Airbnb operates in more than 200 countries and has a valuation of $25 billion, at least as of today.

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Banking Scandal or Ben Affleck Movie?; Airline Ranks and Tanks; Drones to the Rescue

Who gets the movie rights?

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The latest scandal to come out of the banking world has its very own name – “The Panama Papers.” It seems a Panamanian law firm called Mossack Fonseca helped a slew of politicians, celebrities, businessman etc. to create offshore accounts and shell companies for the last forty years. It’s estimated that 500 banks all over the world enlisted the help and resources of Mossack Fonseca to help them set up these shell companies since 1977. Fast forward to a year ago when an anonymous source leaked some 11 million documents to Germany’s biggest newspaper, Suddeutsche Zeitung, which then enlisted the help of the International Consortium of Investigative Journalists. The ICIJ shared information and hunted down leads for over a year in an effort to publicize “The Panama Papers” that contain information on some 214,000 offshore companies. The documents also have plenty of unflattering details about Russian President Vladimir Putin, FIFA officials and over 30 other people and companies that are blacklisted by the U.S. government. These include people indicted for corruption and have ties to drug trafficking and terrorism. Strangely enough, Mossack Fonseco only seems to know the true identities of just over 200 companies out of the over 14,000 that the firm managed to incorporate just in the Seychelles. Now banks across Europe find themselves under the microscope as regulators try to establish if and how those banks found ways to hide assets. The Kremlin, ironically, is calling the allegations “a series of fibs” and thinks its just an attempt to thwart Putins chances in upcoming elections, which are said to be rigged anyway. FIFA, another group that could use a lesson or two on business ethics, called the allegations “ridiculous.” To be fair, it’s not clear to certain people that any actual illegal activity occurred. Of course the banks denied any wrongdoing while Mossack Fonseca calls itself the victim of a data breach.

Bumpy landing…

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Results are in for the Airline Quality Rating and you might just be surprised. Or not. Virgin America took the top spot, even earning the best score in the baggage handling rate category. While Virgin America no doubt takes pride in getting the best ranking, Sir Richard Branson is not exactly celebrating considering Alaska Airlines is buying him out for $2.6 billion. Alaska Airlines, by the way, is paying $57 in cash per share, – a 47% premium over Virgin America’s closing price on Friday. Incidentally, Alaska Airlines came in fifth, though it was ranked highest when it came to fewest customer complaints. But it is anyone’s guess how this buyout will impact Virgin America’s rating next year. In any case, JetBlue came in at number two with Delta, shockingly enough, earning a very respectable third place ranking. Overall industry performance improved slightly. Really slightly. Six carriers actually improved, while another six did not. Spirit came in dead last, but in all fairness, Spirit is new to the list. Also in all fairness, Spirit ranked the highest in customer complaints, which makes sense considering that its culture is best described as “take it or leave it.” Amerian Airlines plunged three spots from last year to number 10. Which sounds about right. American, by the way, is the largest carrier in the world, just not on the United States. United is and yet it doesn’t exactly boast an enthusiastic following. Hawaiian Airlines ranked number one for on-time performance. And that’s really great. Especially if you’re going to Hawaii. Which unfortunately, I am not.

Start-up STAT…

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Bay Area start-up Zipline just scored $18 million in funding  – but not from just any investors.  Microsoft co-founder Paul Allen and Yahoo Founder Jerry Yang saw fit to plunk down tons of cash for the drone company but the question is: what makes this drone company different from all the other drone companies? At least for Paul Allen and Jerry Yang. I suppose it has something to do with the fact that Zipline founder Keller Rinaudo is using his drone technology not for delivering books and groceries, but rather to save lives in third-world countries. Zipline’s drones will be delivering blood and much-needed medical supplies to remote, hard-to-reach areas in Rwanda. Rinaudo, a Harvard-trained scientist said that there is “nothing more precious than blood and medicine” and plans on making those items much more accesible than they have ever been. He also wisely pointed out: “Getting medicine to remote places is both a huge market and a global challenge.” As of now places in Rwanada get resupplied a few times a year. But Rinaudo is planning for his drones to make up to 150 drops a day come July. The government of Rwanda is footing the bill to make that happen. And unlike many other types of drones that can’t operate properly in inclement weather, Zipline’s drones can, are able to carry up to 3.5 lbs. and fly within a 75 mile range. Considering that Rwanda is one of the poorest nations in the world, it will become the first country to employ commercial drone delivery, all while Amazon and other companies continue fighting regulatory battles and FAA hurdles.