Schadenfraud Anyone? Forbes Unveils its Latest Top 400; Can’t Stop Netflix; Venmo’s the New Way to Go. At Least According to Paypal

That’s a whole lotta money…

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Forbes has unveiled its latest list. This time it’s the top 400 richest Americans for 2017 and there are very few surprises in store. Bill Gates and his $89 billion net worth takes the top spot, followed by Amazon’s Jeff Bezos and everyone’s favorite Omaha Oracle, Warren Buffett.  Facebook’s Mark Zuckerberg sits pretty in fourth place. The first time we finally see a woman on the list is at spot number 13 and it’s occupied by Alice Walton of the illustrious Walmart clan. There are 22 newbies on the list and some of them are even self-made billionaires, including Netflix CEO Reed Hastings who comes in at number 359. He had a good year and his company had a great quarter. But we’ll get to that one in a bit. Former Uber CEO Travis Kalanick comes in at number 115, despite being out of his CEO job, while beloved Star Wars creator George Lucas gets spot 118. As for President Trump, he did make the list, coming in at a less than impressive (for him) ranking of 248.  He shares the spot with 15 other people including Snapchat founder Evan Spiegel. Their fortunes are valued at $3.1 billion, a figure the President will probably dispute. It’s a steep drop for the President, whose 2016 ranking had him at the 156th spot. But I guess that’s what happens when your portfolio loses $600 million. I wonder who he’s going to blame for that one?

Wall Street ❤️ Netflix…

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The best way to bring Wall Street to its finicky knees is to crush its expectations. And Netflix did just that. First, the video streaming company laughed in the face of analysts’ projections for subscriber growth. For Netflix that was a 5.3 million increase, far from the modest forecast of 4.5 million new subscribers. A large percentage of those new subscribers came from outside the U.S. Netflix now boasts 109 million subscribers and I’m guessing you must be one of them, right? As for the next quarter, the company expects to add 6.3 million subscribers. Revenue for the company was $2.99 billion, again beating projections of $2.97 billion.  However, at first glance, Netflix’s profit was not so impressive. But that’s only because the company is throwing down serious cash for producing its own shows. And if you’ve ever seen “Orange is the New Black” or “House of Cards” then you’d probably agree that it’s money well spent.  So what does this all mean for you, the Netflix connoisseur/viewer, who obsessively waits for new seasons of your beloved shows to be unleashed? Well, you can probably expect an increase in your subscription plans but hey, that’s the price you gotta pay if you want to keep watching new seasons of “Stranger Things,” right?

Going half-sies…

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If you haven’t signed up for Venmo yet, now might be a good time to start. The company just announced that users can now use the app to make mobile online purchases from over 2 million retailers including Forever 21 and Foot Locker.  But what’s so darn cute about Venmo is a feature that gives you the option to split a purchase with a friend. Or even an acquaintance, I suppose. Which is so great when you go out for lunch and can’t be bothered to do the math at the table or when you just want to pay the rent down the middle. And, you can even share status updates about the purchase. How nifty. Especially if you’re a millennial. Did I mention that Paypal is Venmo’s parent company? Well, it is. And pretty much anywhere you’re able to use PayPal, you can now use Venmo there as well. Just think of all the Lululemon merchandise you can purchase with all your besties.

 

 

 

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Snap to it! Snap Inc. Banks on IPO; Canada Goose Wants to Keep NYSE Warm and Cozy; How Much Is That Handbag Company In the Window? Kate Spade Puts Itself On the Market

Next big thing?

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Looks like Snap Inc., the company that gave us Snapchat, is gearing up to be Wall Street’s next big IPO darling. Come March 1, the company is hoping to get an IPO valuation of between $19.5 – $22.2 billion, and is offering about 200 million shares on the New York Stock Exchange under the ticker symbol…wait for it…SNAP. You saw that one coming, didn’t you. It plans on pricing those shares between $14 to $16, which should bring in over $3 billion. The company already boasts 158 million active users and most of Snapchat’s money comes from advertisers. Revenues for the company came in this year at $404.4 million –  a far cry from 2015’s $58.6 million. However, one hurdle Snapchat might have to overcome is the perennial question of how it plans to make a profit. Sure it took in over $400 million in revenue last year, but it still also posted a $514 million loss.  In any case, before Snap Inc. makes its big Wall Street debut, top brass, including CEO Evan Spiegel, are set to hit the road, for a “road show,” – which is not as cool as it sounds – to visit investors in hopes of whetting their fiscal appetites on the potential of Snap Inc. stock. One hitch – and apparently there are more than a few – is that new shareholders won’t have any voting powers and instead will have to trust the board to know what they are doing in order to make tons of cash for the company.

What’s good for the goose…

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You don’t have to be Canadian to notice the swarms of people sporting the Canada Goose brand of winter gear. Chances are, if you’ve ever thought about buying one of those coats, you might have reconsidered after looking at the price tag.  But apparently more than enough people are buying the brand’s merchandise to warrant a $100 million IPO filing, and Canada Goose will list on the New York Stock Exchange under the ticker symbol…wait for it…GOOS. Didn’t see that one coming, did ya? Okay, you probably did. While that $100 million isn’t exactly screaming: “SNAPCHAT!” the fact is Canada Goose’s revenue grew close to 40% between 2014 and 216, with just its online sales hitting $33 million in 2016. By 2016, revenue for the company came in at over $290 million. You may not have bought one of their jackets, but chances are, with figures like, that you know someone who did. In fact, in the last three years in the United States, sales grew by 76%, and 33% in the last year, to total over $103 million. In Canada those numbers only grew by 15%. Go figure.  While Canada Goose still scored a $27 million profit on that $291 million revenue, it does still have a wee bit of debt to the tune of $278 million. So yeah, a few extra bucks from an IPO would do wonders.  Of course, you can’t file for an IPO just on the basis of a few jackets. With that in mind, Canada Goose has big plans to expand its product offerings from footwear to bedding and everything in between.

Up for grabs…

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It was just a matter of time, I suppose, before Kate Spade threw in the fiscal towel and decided to put itself up for sale. Except, at Kate Spade, they’re calling it “exploring strategic alternatives.” However the company wants to spin it, it still heartened Wall Street which sent shares of the company up more than 13% for a change. To be fair, Kate Spade’s recent quarterly earnings weren’t even horrible.  In fact, the company took in a 39% increase in profit of $86 million on $471 million in revenues, missing estimates by just one million measly dollars. The handbag company even added 41 cents per share when just 34 cents were expected.  Shares are up over 20% for the year and sales of its merchandise in its own stores increased by over 9% . Its rivals, including Michael Kors  and Coach would have loved to see similar results themselves. But alas, for Kate Spade, China just wasn’t feeling the love while a strong dollar kept plenty of tourist shoppers at bay. And in our neck of the woods, consumers just aren’t buying handbags as much as in the past, which is quite the problem when your core product is just that.

Love is…An IPO; Volkswagen’s “Goodwill”; Snapchat Vs. Facebook Video Smackdown

For the love of money…

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Image courtesy of atibodyphoto/FreeDigitalPhotos.net

While the odds of meeting “the one” via online dating are slim, that hasn’t stopped Match Group Inc from making a regulatory filing for an initial public offering on NASDAQ under the ticker symbol MTCH. The company, which also owns Tinder and OKCupid, is looking to raise close to $404 million in order to pay of some of its debt to billionaire Barry Diller’s IAC InterActiveCorp. The company’s, whose value is estimated to be around $3 billion, is looking to sell some 33.3 million shares for somewhere between $12 – $14 a pop. Indeed, online dating is very big business, despite the odds. In 2014, Match Group pulled down $148 million in profit on $88 million in sales. In the last twelve months, the company saw about $1 billion in revenue with sites getting 59 million monthly active users along with 4.7 million paid members. The sites run on 38 languages in close to 200 countries. A lot of the big bucks are coming from mobile users as evidenced by the fact the 68% of new registrations came from mobile devices in just the first six months of the year. So whether you find love, or not, is besides the point. The money comes from the quest to find it.

A little desperate?

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Image courtesy of Paul/FreeDigitalPhotos.net

You know its bad when they start handing out $500 Visa gift cards. And that’s exactly what Volkswagen decided to do in the wake of the company’s emissions software scandal that magically allows some cars to release up to 40 times the legal amount of nitrogen oxide into the air we breathe. The embattled auto company is also giving away $500 in dealership credit. Oh, and three years of free roadside assistance. Did I say free? Well, you basically relinquish your right to sue Volkswagen if you happen to own or lease one of their 11 million affected cars. Don’t worry, though. Only 482,000 of them are currently polluting the United States. So say goodbye to personal lawsuits or class-action participation. Like the one that’s suing Volkswagen to get it to buy back your vehicle for the exact amount you paid. Of course, that’s assuming the lawyers arguing that case actually win. Then there’s the potential $18 billion criminal lawsuit looming against Volkswagen for violating the United States Clean Air Act. Except, you can’t be a part of that one since it would be coming from the government. But you would lose out on any potential future compensation. Once you sign up for one of Volkwagen’s “goodwill package,” you are on your own.  Some Audi drivers will be eligible for the deal, as well. In order to get your $500 Visa gift, dealer credit and free roadside assistance, you have to go to VWDieselInfo.com and sign your life away. Sort of. Then wait four weeks to go shopping. You have until April 30, my emissions spewing friend.

Do I smell an IPO?

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Snapchat dissed Facebook once by rejecting the social networks’s $3 billion offer to buy it back in 2013. Now, the messaging app is nipping at Facebook’s heels as it just announced that its daily video views tripled to 6 billion…since May. Facebook’s video views, while doubling to 8 billion, are not considered nearly as impressive, since Facebook’s views are coming from desktop computers and mobile devices, while Snapchat’s views are exclusively done on mobile devices. Those video advertising’s numbers pull in way more cash than your plain old digital ads. One research firm predicts a 42% jump in digital video revenue to $7.5 billion and you can be sure Snapchat and Facebook are going to be fighting it out for as big a share as possible. Especially where apps are concerned, those digits are huge. But there seems to be some dispute as to what counts as a video view and it all depends on where you’re watching it. If you happen to be spending some quality time with your Facebook account, the social media counts a view as three seconds or more. Youtube counts 30 seconds as a bona fide view. But Snapchat charges for views that just less than a second. You be the viewing judge.

Bling it On: Tiffany’s Earnings Shine; Michael Kors Earnings Do Not Shine: Did Someone Say Snapchat IPO? Sort of.

You paid how much?!

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Image courtesy of MR LIGHTMAN/FreeDigitalPhotos.net

Shares of Tiffany & Co. shot up over 12% to $95.68 – the most in almost six years and, well, why not? After all the high-end bling company scored some epic digits in its latest earnings report, proving once again that people really do like expensive jewelry. I mean, was it ever even a question? Even though the declining euro against the dollar seems to be messing with everybody else’s earnings Tiffany & Co. seemed to emerge from the quarter virtually unscathed. Sadly, I was not the recipient of any high-end Tiffany & Co. pieces lately, but plenty of other lucky consumers were as it was the high-end collections that drove sales for the luxury retailer this past quarter. Those pricey accessories took in $962.4 million in revenue, with profits of $104.9 million and 81 cents per share. Analysts only predicted 69 cents per share. Sort of impressive, except that last year Tiffany & Co. pulled down $1 billion in revenue with $125.6 million in profits and 97 cents per share. Those shares, by the way, are down 20% for the year. But considering that the company just increased its forecast, those stock prices might be making a comeback.

Going down down down…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Unfortunately for Michael Kors, his fashion company took a nasty beating over the declining euro. But it wouldn’t be right to blame all the company’s bad earnings on the strong dollar as other factors also caused the company’s stock to plunge. While it may be hard to believe, it was just a few months ago that the stock hit an all time high of $97.60. Today, however, the stock is teetering at just under $46, its lowest point since December 2012 when it first made its IPO. Besides the strong dollar, same store sales were down a very uncool 6%. That may not seem like such a big deal but for Michael Kors it’s huge, especially when you take into consideration that the retailer also reduced its earrings outlook. Coach and Kate Spade are definitely giving Michael Kors an unwelcome run for its money, as well. When the dismal earnings for Michael Kors were announced, though, those two companies also saw their shares take a beating, as investors wondered whether bad earnings for fashion companies would be trending. Another culprit behind Kors’ earnings was Apple. No joke. While accessories tend to be hot sellers and profit drivers for companies like Michael Kors, the Apple watch is putting a major chink in those sales. After all, if you’re already spending that kind of cash on your wrist, why not have an Apple watch perched there?

Bubble burster…

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Image courtesy of arztsamui/FreeDigitalPhotos.net

Is there an IPO on the horizon for messaging app Snapchat? Maybe. Except CEO Evan Spiegel declined to elaborate on some key details during an interview with Re/code’s Kara Swisher and Walt Mossberg. For instance, the 24 year old founder wouldn’t even drop an itty bitty hint as to when Snapchat might make its big ticker debut. Speigel also dished out his thoughts on several other topics including his feelings that our current tech bubble is going to burst. Which is informative and all but really, when’s this Snapchat IPO coming at us? With 100 million users sending out around 700 million pics a day, the company has picked up funding and is valued at around $10 billion to $15 billion – depending on whom you ask, of course. But about that Snapchat IPO…

Are You There Shareholders? It’s Me, Warren (2015); Forbes’ Magazine Names the A-Listers; Costco: AmEx Out, Visa and Citi In

Best Regards, Warren…

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Image courtesy of Boians Cho Joo Young/FreeDigitalPhotos.net

Warren Buffet’s annual letter to Berkshire Hathaway shareholders arrived over the weekend, regaling us –  I meant them – with so many insights and wisdom about the economy and the ways of the investment Samurai. Among the many pearls, Mr. Buffet wanted to let folks know that “America’s best days lie ahead.” Things might have been a bit shaky the last few years, but darn be the naysayers  and things can and will only get better. Mr. Buffet also wished to remind people that “Market forecasters will fill your ear but will never fill your wallet.” Aw, Warren. There’s something very moving about the way the Oracle of Omaha advises people that all these financial experts surrounding us are good for nothing. He also offered some poetic words regarding his failed investment in British supermarket chain, Tesco: “In the world of business, bad news often surfaces serially: You see a cockroach in your kitchen; as the days go by, you meet his relatives.” The venture ultimately cost him a whopping $400 million and the Oracle attributes the loss, to among other things, not being decisive and fast enough about pulling out of the investment. Meanwhile, during an interview on CNBC, Warren Buffet said Sen. Elizabeth Warren (D-Massachusetts) should be “less angry and demonizing” and should be more open to compromise. Ouch. I guess those two won’t be hanging out together anytime soon.

Speaking of Warren…

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Image courtesy of iosphere/FreeDigitalPhotos.net

Omaha’s most famous resident made it to the number 3 spot on Forbes’ list of billionaires. Microsoft’s Bill Gates claims the top spot – again –  with a net worth of $79.2 billion while Mexico’s Carlos Helu Slim comes in for second. There are 1,826 billionaires on the list who have a combined total net worth of $7.05 trillion. However, the average net worth of the billionaires is actually down by $60 million this year to $3.86 billion. I know, how sad.  Seventy-one of those billionaires are breaking onto the list of the very first time. Among those first-timers is basketball great Michael Jordan who makes his big billionaire list debut this year with a little help from having increased his ownership stake in the Charlotte Hornets. But his restaurants, deals with Nike, Gatorade, Hanes, etc…allow him to claim the 1,741st spot with a net worth of about $1 billion. Forty-six of the billionaires are under the age of 40 with Snapchat’s Evan Spiegel having the distinction of being the youngest billionaire on the list.

Well hello, pardner…

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Image courtesy of stock images/FreeDigitalPhotos.net

Club goers rejoice! Costco has officially entered into agreements with Citigroup and Visa to become the wholesaler’s partner in credit. In the meantime, the retailer is bidding a not-so-fond farewell to American Express, who for the last 16 years had an exclusive deal with the chain. Citigroup will be putting out a Costco/Citi credit card with perks and generous rewards aplenty, in keeping with the Costco spirit, of course. Unfortunately, Costco shoppers must wait until April of 2016 to whip out the new plastic. However, debit cards know no bounds – or labels – and those will continue to be warmly accepted regardless of the issuer, at Costco’s 674 warehouses worldwide. And while AmEx is expecting to take some type of beating on Wall Street for the next two years, shares of Visa hit an all-time high today over this very exciting fiscal news.

Snapchat-ting all the Way to the Bank; HSBC Is In Big Trouble, Yet Again; Virgin America’s Soarin Good Earnings

And just like that it disappears…

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Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Hindsight is 20/20 but in Snapachat’s case it’s more like 19 – as in billions of dollars. The social media and messaging app, which very presciently declined Facebook’s offer to buy them for a paltry $3 billion back in 2013, is rumored to be adding an additional $500 million to its coffers. This will now peg the company at between $16-$19 billion and could make it the second most valuable privately held company behind Über technologies and Chinese smartphone maker Xiaomi. Started in 2011 and helmed by CEO Evan Spiegel, the app allows users to post pictures and messages that disappear within a few seconds after being opened. Snapchat boasts 100 million users and it should come as no surprise that 57% of its users are under the age of 25. Of course, its disappearing act is not the app’s only trick as it now has deals with, among others, Yahoo, CNN, ESPN…the list goes on, tailoring content just for you. Even movie studios are getting in on the Snapchat action and before long you’ll see Snapchat’s very own superhero series. If that doesn’t scream street cred, then I don’t know what does.

Don’t bank on it…

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Image courtesy of scottchan/FreeDigitalPhotos.net

There’s nothing like a little money laundering investigation to put a downer on your week. Well in HSBC’s case it’s “aggravated money laundering” which sounds so much more sinister than just plain old “money laundering.” This latest criminal investigation comes a week after the revelation that it helped some of its super wealthy clients and their 1,100 bank accounts, evade taxes. HSBC is on a roll, I tell you. Investigators suspected that if HSBC was helping its clients avoid paying taxes, then what else might it be helping their clients do? Hence, we have the money-laundering investigation.  A Swiss public prosecutor launched a criminal probe into the matter and has since raided the picturesque offices of HSBC. Good thing that former HSBC IT employee, Herve Falciani, very thoughtfully collected all those files pointing investigators into launching an investigation. Too bad he tried to sell the information first, though. That kind of looked bad for him. But probably not as bas as how it’s looking for HSBC right now. Of course, HSBC is said to be cooperating. Whatever that means. Do banks ever not cooperate?  HSBC did, however, sort of acknowledge it messed up on the tax evasion end blaming the fact that stringent standards weren’t in place as they should have been. You don’t say.

Flyin’ high…

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Image courtesy of hywards/FreeDigitalPhotos.net

If you’ve ever flown Virgin America, then it might come as no surprise (or maybe it will) that the airline just whipped Wall Street expectations with a little help from cheaper oil prices and fully booked planes. The airline only made its Wall Street IPO debut back in November but so far it has not disappointed as the airline took in $1.16 per share – a far cry from the 80 cents Wall Street expected it would earn. Revenue for the fourth quarter was $372.2 – a 3.4% increase over last year at this time, impressively taking down analyst estimates of $370.8 million. Started by billionaire Sir Richard Branson, the airline just announced big plans to give Southwest Airlines a very unwelcome run for its money by offering non-stop flights to Austin. Let’s just hope this little battle pays off for the passengers too.