Standard & Poor’s Overrated Ratings Settlement; Spirited Numbers for Whiskey and Bourbon; Who Will Radio in on RadioShack?

Poor ratings system…

Image courtesy of suphakit73/FreeDigitalPhotos.net

Image courtesy of suphakit73/FreeDigitalPhotos.net

It’s shaping up to be an expensive week for Standard and Poor’s, the ratings company owned by McGraw Hill Financial Inc. After two years of legal wrangling, where the Department of Justice accused the S&P of defrauding investors, S&P agreed to pay for $1.5 billion in a settlement. According to the lawsuit, S&P made sub-prime mortgages sound way better than they actually were, generously over-rating them during the height of that hard-to-forget financial crisis of 2008. One of the juicy little highlights from the lawsuit, as taken from an excerpt from an instant-messaging exchange between two of its analysts, goes a little something like this: “It could be structured by cows and we would rate it.” So what were they trying to say about our friends in the bovine community? Hmm. While S&P gets to avoid admitting actual wrongdoing, as per the terms of the settlement, it will be shelling out $687.5 million to the DOJ and another $687.5 million to 19 states and the District of Columbia. S&P said the DOJ was only coming down on them because it downgraded the US sovereign debt from AAA all the way down to AA+, but the DOJ says NOT! In a separate lawsuit, S&P ¬†reached a settlement with pension fund, Calpers (California Public Employees Retirement System), also a victim of S&P’s too-generous sub-prime mortgage ratings system.

I’ll drink to that…

Image courtesy of artur84/FreeDigitalPhotos.net

Image courtesy of artur84/FreeDigitalPhotos.net

It’s been a very good year for bourbon and whiskey as exports of these spirited spirits topped the $1 billion mark. Even here in the US, sales for Kentucky bourbon and Tennessee whiskey grew, with revenue for both rising 9.6% to $2.7 billion and 19.4 million cases of the stuff being scooped up. 19.4 million cases? Who are you people drinking all this? But it’s the premium selections that are really hitting it big with drinkers…er, consumers, as revenue in that category is up over 19%. All this while beer seems to be experiencing a decline on the whole by 4% in the last five years, with Budweiser losing 28% for that same time frame, despite those super Superbowl ads. Craft beer, however, tells a different story as that tasty category is experiencing an uptick. Some analysts are even thinking all these increasing numbers come courtesy of millennials, who seem to prefer high-quality spirit versus the stuff their parents enjoy. By the way, it should be duly ¬†– and might I add, fondly – noted, that Kentucky produces 95% of the world’s bourbon supply. Go Kentucky!

Shacked out…

Image courtesy of cool design/FreeDigitalPhotos.net

Image courtesy of cool design/FreeDigitalPhotos.net

Rumors are swirling as to who will emerge and scoop up RadioShack as bankruptcy looms near for the company that was just never able to compete with the behemoth that is e-commerce. The New York Stock Exchange had suspended trading of the 94 year old company on Monday, with shares tanking down to $0.14 a share in after hours trading. So will it be Sprint who decides to take up some of RadioShack’s retail leases? The company has 4,300 stores in the US, alone. Or will Amazon add the chain to its arsenal and increase its brick-and-mortar presence in the world? Word on the street is that Jeff Bezos might do just that as a way to showcase some of the gazillions of products that Amazon has to offer, for the right price, of course.

Advertisements

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.