Wanna Be a Billionaire? Then Move to China; Rainbows and Unicorns!: Twitter Might Finally Churn Out a Profit; Nike’s Game Plan Leaves No Room for the “Undifferentiated​”

Something tells me we’re doing it wrong…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

There’s a new report out published by UBS and PwC, called the Billionaires Insights report that tracked 1,542 billionaires all over the world and their combined $6 trillion. And while some might quickly assume that the United States might hold the top spot for the billionaires club, they would be wrong. As it turns out, Asia has the most billionaires, topping out at 637, whereas the United States can only boast 563 billionaire residents. In fact, every two days a new billionaire is minted in Asia, with China having the most.  But, to be fair, the wealth of the U.S. billionaires is much higher, coming in at $2.8 trillion, compared to Asia’s $2 trillion. So six in one, half dozen of the other, I suppose. Except not for long. The report also mentioned that the wealth of Asia and its billionaires will far surpass the U.S. in four years. One of the biggest “problems” listed for these poor billionaires face is how they intend to pass on their wealth. Rich people problems. But somehow they manage, whether they choose to pass it on to their heirs or leave it to charitable organizations. Decisions decisions. Of course, the more people the billionaires leave behind, the more complicated things get. But such is life when one is saddled with so much friggin’ cash.

Fairytales do come true…

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There’s a lovely rumor going around that maybe, possibly Twitter just might crank out its first-ever profit. We just need to wait until next quarter to see if that’s actually going to happen. But it’s not outside the realm of possibility since the social media company did make a major push to cut expenses while engaging in deals with other companies that don’t have them relying so heavily on advertising. Wall Street, at least is super stoked, causing shares of Twitter to soar 16% to over $20 per share.  And that company definitely needs all the share-soaring it can get. Twitter’s revenue was $590 million, a 4% dip from last year at this time but still decent since expectations were for $587 million. The other big news on the Twitter front is that the company made a very big mistake and is apparently trying to make amends for it. It seems that somehow an error was made in how user base was calculated for the last few years. But the company did revise the previous estimates, that had those numbers coming in a bit smaller than what was previously reported. Twitter insists that the difference amounted to less than one percent and that’s the story they’re sticking to. Their monthly active users, by the way, are up to 330 million and that number is supposed to be accurate, just disappointing since analysts expected that number to be 330.4 million. Oh well, Can’t win ’em all.

You’re out!

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Nike’s annoyed at under-performing retailers and has put them on notice. Which is definitely one way to make enemies. But hey, Nike is all about competing and if a struggling retailer is unable to “just do it,” then they’re out. Because Nike has a plan – a big one – that’s got them trying to hit $50 billion in sales by 2020. Nike wants to just do it, naturally. However, Wall Street is not so sure it can. I have yet to decide who my money’s on at this point in time. Apparently, 40% of Nike’s wholesale business comes from “differentiated” retailers and they want to up that to 80%.  Those retailers have a way of presenting the merchandise that gets customers wanting to spend their money at those establishments. According to Nike brass, “undifferentiated mediocre retail” just won’t cut the mustard and can expect a nasty goodbye within five years. Ouch. Nordstrom and Foot Locker apparently have nothing to worry about. For now. There were some obvious omissions, though, including Macy’s and JC Penney. Just saying. Whatever Nike has in store for those “undifferentiated” retailers doesn’t seem to bother Wall Street. Investors sent the stock up 3.5% today.

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Is Twitter Finally Getting Something Right? Ford’s Got a Truckin’ Big Problem; Wall Street’s Got Beef with Chipotle’s Labor

I’ll tweet to that…

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Rumor has it that Twitter is finally, actually, seriously going to do something about sexual harassment and other hideous actions and behaviors that take place on the micro-blogging platform. The new policy changes are aimed at bullies and other highly offensive, odious excuses for human beings. But just what kind of consequences can offenders expect and how quickly can they expect them? Glad you asked. Accounts owned by the offenders will get shut down. Immediately. And forever. Posters of non-consensual nudity, including, “upskirt imagery, creep shots and hidden camera content” are out too.  Posters of “hate symbols, violent groups, and tweets that glorifies violence” can also expect some new rules that they will definitely not like.  What’s also new and necessary is that Twitter wants to figure out how bystanders get to report abuses. Just don’t expect these changes to happen overnight. In fact, it could be weeks before those policy changes take effect. Besides, Twitter’s still busy being investigated by Congress and testifying about Russia’s Twitter role in the 2016 presidential election. It seems that the 201 profile names Twitter provided to the Senate last week just weren’t enough to convince Senator Warner that Twitter was being sincere in its efforts to cooperate. But perhaps its karma for the way the micro-blogging site suspended actress Rose McGowan after bravely calling out the nefarious actions of the monster we call Harvey Weinstein.

Have you driven a Ford lately?

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There’s nothing like a recall to completely mess with your most profitable line of trucks. Ford Motor Co. is now taking a brutal hit over its very popular, number one selling F Series trucks. In fact, the aforementioned truck is the best-selling vehicle in the U.S. Apparently the doors on some 1.3 million F-150’s and Super-Duty trucks are posing a $267 million problem because if they are not fully latched they may not open or seem closed. To be fair, no accidents or injuries related to this particular issue have been reported. Yet, anyway.  The recall was inconveniently announced just weeks after Ford’s newly installed CEO unveiled a plan to cut $14 billion worth of costs. Ford plans to officially notify its customers next month but has not yet mentioned when the parts necessary to repair the trucks would be available. But Ford presumably anticipated this particular challenge since it already has some unwanted experience in this dreaded arena, with this latest fiasco bringing its recall total to 5 million vehicles.

No perks?

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As the saying goes, “The road to hell is paved with good intentions.” Which brings us to Chipotle, the beleaguered fast-food chain who apparently pays its employees too much – no, that is not a typo – and because of it is suffering Wall Street’s fiscal wrath. Don’t shoot the messenger here. Analysts at Bank of America Merrill Lynch just downgraded the restaurant chain from neutral to underperform because the amount of money spent on labor needs to be cut. Back in 2006, Chipotle’s average weekly hours were 34.6 for part-time and full-time employees. That was its high point. But in 2016 that number dropped significantly to 21.7. The company already did a lot of scaling back and needs to do more. However, according to analysts, there doesn’t seem to be any decent way to achieve this and still come out on top – and in the green. Shares naturally dropped by about 2% today and are down 12% for the year.

 

Japanese Airbag Maker Goes Bust; Pandora CEO Sings the Blues; ‘Pharma Bro’ Goes on Trial

Deflated…

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Japanese airbag maker, Takata Corp has filed for bankruptcy.  In the United States. Sure  companies file for bankruptcy almost everyday. But what makes this one unique is that Takata has the dubious distinction of issuing the largest auto-industry recall. Ever. With over 40 million vehicles in the U.S. possessing the potentially deadly airbags, some 125 million vehicles have been and will be recalled by 2019. It’s also the largest bankruptcy of a Japanese manufacturer, and one that finds itself staring down the wrong end of billions of dollars worth of losses over recalls that lasted the better part of a decade. From paying settlements to individuals who were harmed, to paying car makers, including Honda, BMW and Toyota – to name just a few – Takata’s fiscal trouble will take years to reverse. It seems that Takata’s faulty products were the cause for at least 16 deaths – that we know of. Fortunately a Chinese company had the good sense to swoop in and acquire Takata for a whopping $1.6 billion. Although, that is apparently a thorn in the side of the Japanese, since selling off to foreigners is something the country would rather like to avoid. Incidentally, the Chinese company that bought Takata is called Key Safety Systems and is based right here in the U.S. Go figure.

Cue the goodbye music…

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Looks like the music’s gone for Pandora CEO and Co-founder Tim Westergren. His departure may – or may not – have something to do with Sirius XM’x recent purchase of a $480 million, 16% stake in Pandora. But rumor has it that investors are bummed because they wanted Sirius to buy up the whole operation. If you recall, and it’s okay if you don’t, Howard Stern makes his radio home at Sirius. Not that this has anything to do with Westergren’s exit either. To add insult to injury, shares jumped a little on the news of Westergren’s impending departure, signaling that investors are stoked about his exit.  That itty bitty jump must have been especially welcome since Pandora’s stock has been down over 35% this year.  After all, Pandora is staring at some fierce competition from Spotify, Apple and JZ’s Tidal, to name just a few. As of yet, no replacement has been named so if you’re looking to throw your hat into the ring, now might be your chance.

What a pill…

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The time has come for everyone’s least favorite Pharma bro’ to head to court. And thus Monday begins with Martin Shkreli finding himself in a Brooklyn Fraud courthouse instead of a beach mansion in the Hamptons. But considering he raised the price of a life-saving drug by 5000%, he might very well go down as the least sympathetic defendant to ever sit in that courtroom. And just so ya’ know, being an a–hole isn’t crime and it’s not the reason why pharma-gazillionaire Shkreli is sitting in a courtroom on this fine summer day.  Rather ‘Pharma bro’ is on trial because prosecutors charged him with “widespread fraudulent conduct” and running a ponzi-like scheme that had him lying to investors while working at a hedge fund and his drug company.  Fun-fact: Shkreli was banned from Twitter back in January after harassing a female journalist who wrote an op-ed criticizing Donald Trump. Oh, the irony.

Ford Looks to Boost Profits With Layoffs; Twitter Sequel: The Return of Biz; Avocados Will Not Make You Rich!

Slash and burn…

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Today’s job-slashing news is brought to us by Ford Motors. The automotive company, which employs about 200,000 people worldwide, plans to cut about 10% of its salaried workforce. Apparently, the job cutting efforts are simply part of a $3 billion cost cutting program. What Ford is really hoping to accomplish is to keep its stock from from getting too close to a five-year low and boost profits at the same time. Ford released an official statement today and made sure to talk a lot about priorities, profit and growth. Curiously enough, however, no mention was made about job cuts. Wonder what that’s all about. If it’s any consolation, rumor has it that Ford is offering generous early retirement incentives to some of the aforementioned salaried workers. However what generous and incentives actually mean remains to be seen. In any case, CEO Mark Fields, who came on board back in July, wants people to know that the folks over at Ford “are as frustrated as you are by the stock price.” Fields in particular must be awfully frustrated considering that the stock has dropped over 35% since he took the CEO reins.

Let’s get Biz-y with it…

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Amidst a throng of high-level departures comes a potential bright spot for Twitter – the return of co-founder Biz Stone, six years after he left. In a Medium post he wrote that he’s returning to the embattled social media company for the purpose of “filling the ‘Biz-shaped hole.'” Yup. He said that. He went on to say, “You might even say the job description includes being Biz Stone.” Yup. He said that too. Biz wants to guide company culture, feeling and energy, and Twitter could definitely use help in all three of those categories. Besides, it’s not like Biz had anything else going on these days since he just sold his latest start-up to Pinterest for an undisclosed sum. You got that? An undisclosed sum. (I have no definitive idea of what that means.) As for Jack Dorsey, another co-founder and current Twitter CEO, Biz counts him as “his closest friend.” At Twitter anyway. Wall Street seems to be thrilled about Biz Stone’s return as well, sending the stock up over 2%. Twitter’s stock will take any boost it can get these days. And according to Stone, and presumably President Trump, “The world needs Twitter, and it’s here to stay.”

It’s the pits…

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Today is not a good day for the avocado industry. It seems Australian millionaire Tim Gurner said during an interview on Australia’s “60 Minutes” to ditch the avocados if you want to buy a house. It’s not that Gurner has anything against the green-fleshed delicacy. Only that Millennials should focus on saving their money towards purchasing a home and accumulating wealth instead of spending $19 on pricey avocado sandwiches. See the connection? Neither did plenty of Twitter users.  On Twitter @kalebhorton wrote: “Alright, I did the math. If I stopped eating avocado toast every day, I would be able to afford a bad house in Los Angeles in 642 years.” Foghorn Greghorn tweeted: “Avocado Toast $6.50 Data $150 House $650,000 Utility $150 someone who is good at the economy please help me budget this my family is dying.” But maybe Gurner’s onto something. After all, he is a real estate tycoon with an estimated $460 million. And I bet he owns lots of homes.

White House Tax Plan Causing Quite the Stir; Twitter’s Very Good Day/Quarter; Silicon Valley Start-Up Eats $1.6M for Discrimination

So taxing…

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The White House whipped out its opening bid for what it’s calling the “biggest tax cut.” Well, in U.S. history anyway. So who’s supposedly getting a nice break? The middle class, for one, along with some businesses and, naturally, some wealthy individuals, among others.  While President Trump’s top economic adviser Gary Cohn and Treasury Secretary Steven Mnuchin want corporations to pay a 15% tax rate, the plan also calls for a one-time tax payment on earnings that U.S. companies keep outside the U.S. Apparently this new tax cut is meant to be all about simplicity, giving a much-needed boost to the small-business sector while putting some cash back into pockets of the middle-class. Individual rates would change, with the top rate dropping from almost 40% to 35%, and instead of having seven brackets of rates, we’d have just three.  Those cuts sound great, in theory, however, questions remain as to who will be paying for these cuts and how will they be paying for them.

It did what?!

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We’ll start with the bad news. Twitter’s year-over-year revenue declined for the first time  ever to $548 million. But miracle of miracle – hey, we are talking about Twitter, after all – the social media company beat analysts expectations on everything else. TWITTER BEAT EXPECTATIONS. While last year’s revenue at this time was a much higher $595 million, it still wasn’t anywhere near dismal expectations of $512 million for this quarter. User growth has been a fiscal thorn in Twitter’s side. But perhaps the social media tide is turning because Twitter added 9 million more monthly active users bringing its grand total to 328 million users. 9 MILLION users added. You know what anaylyst expected? 2.3 million. Twitter effectively blew those estimates out of the water. As for the other numbers, the company earned 11 cents per share when expectations were for one single solitary cent. In other words, Twitter beat those estimates by a dime. Twitter explained that its impressive earnings were due in part to increased political interest – which sounds about right, especially given President Trump’s highly entertaining tendency to tweet before he thinks. Also, Twitter’s efforts to simplify use on the platform and putting greater focus on stamping out abuse seem to have helped matters…and figures.  Naturally, shares enjoyed a much appreciated increase today, soaring way past $16 a share.

Pony up…

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Palantir Technologies may be valued at $20 billion, but it’s about to lose $1.6 million of it as part of a settlement with the U.S. Department Labor. Charges were brought against the data-analytics company that it discriminated against Asians. Besides the money the company has to cough up, which will go towards back pay and stock options to affected applicants, Palantir also has to hire eight people, who had previously applied to the company, for two different types of engineering roles. According to the government’s complaint, Asians were “routinely eliminated” on the basis of their resumes and telephone interviews. But apparently, Palantir should consider itself lucky that the case didn’t end up going to court. If it had and lost, the penalties would have been so much worse. That $1.6 million is chump change compared to what it might have been had the company been found guilty. And that would be in addition to being added to a list that bars certain companies from doing business in the government sector. Palantir has so far enjoyed hundreds of millions of dollars from such contracts. Of course, Palantir disagrees with the allegations, refuses to admit to any wrongdoing and claims that it only settled so that it could carry on business without further interruptions. Incidentally, Palantir’s co-founded is Peter Thiel, one of President’s Trump’s biggest Silicon Valley supporters and cheerleaders from the start.

Show Me the Money! Forbes Unveils Its Annual List of People With Money to Show; UK Shows Google What Happens When You Don’t Shut Down Haters; Twitter Did Something Impressive. Just Not With Its Earnings

Rich-y rich…

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It’s that time of year again. The one where Forbes reminds us just how much money we don’t have relative to the richest people in the world. And here goes. There are 13% more billionaires this year than last year and their combined net worth totals almost $7.7 trillion. Yes. Trillion.  The number one spot goes to Microsoft co-founder Bill Gates who’s net with totals $86 billion. When Gates is not busy fixing the world and explaining to the President why his budget ideas are bad ideas, he runs the world’s largest charitable organization. Naturally, the Oracle of Omaha, Warren Buffet, comes in a close second with a net worth of $75.6 billion, while Amazon’s Jeff Bezos makes his debut into the top three with a net worth of $72.8 billion. And even though we only finally see a woman on this list at the number 14 spot, there’s still some uplifting news. For instance, the number of women who ma∂e it onto the list has increased 170% since 2009. Also, there’s a record 56 women on the list who are self-made billionaires. If you’re curious to see who did and didn’t make the list, click here to find out. And spoiler alert: Perhaps President Donald Trump really ought to consult Bill Gates on any and all future budget concerns for the country, considering he lost a billion in the last year and ranks #544.

Dis-content…

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Just when you thought Google could do no wrong, the search engine giant finds itself in the midst of some major policy revamping after a bunch of big-name advertisers pulled their marketing  – and whole lot of money – because it was showing up on /sexist/hate-filled/offensive/anti-semitic/terrorist-promoting content. The trouble started when major brands, including the BBC and department store chain Marks & Spencer, noticed their ads being being placed alongside content promoting violent extremist groups. Last I heard, department stores were no great fans of terrorism. Now, part of the policy revamp includes broadening Google and YouTube’s definitions of hate speech, which is always a good thing since hate manages to always rear its ugly face no matter how subtly its presented. Also, content won’t be able discrimnate against groups based on their identity, socieo-economic class and country of origin. Such measures ought to make it a tad bit more difficult for the haters to get their odious messages out. In addition to some added controls and a few default settings, Google should end up creating a kinder, gentler platform. Hopefully…

Speaking of which…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Even though Twitter doesn’t exactly have the fiscal luxury to delete accounts, to its credit, the social media company did just that and put the kibosh on close to 380,000 of them because of their links to terrorism. So lousy earnings aside I say “Kudos” to Twitter.  Those accounts were just the ones it took down between July and December of 2016.  Since August of 2015, over 635,000 accounts have been removed for the same reason. The information was disclosed in its latest transparency report and these actions are part of an effort to weed out extremist groups and other assorted haters. Interestingly enough, almost 75% of the accounts that were removed from Twitter were discovered by technology created just for this purpose for Twitter, while 2% of those accounts came down after governments made requests for the company to get rid of them.

 

Trump-y’s Bumpy Budget Plans; McDonald’s Unknowingly Picks Fight with President; The Goose is Loose: Luxury Coats Hit Wall Street

Did you say…trillion?

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There’s nothing like a $1.1 trillion budget proposal to perk up a Thursday. The big winner in Trump’s plan is defense, which gets a $54 billion boost if the President gets his way. Losers of the $54 billion corresponding cuts include  – but are not limited to – the Department of Housing and Urban Development and the Environmental Protection Agency – which you had to have seen a mile away. The National Endowment for the Arts, legal aid for the poor and low-income heating assistance would also be history. Because why bother helping poor people pay for heat when you can spend $1.5 billion on a down payment to build a wall along the Mexican border. Wasn’t Mexico supposed to foot the bill for that one, by the way?  In any case, the outline was described as a “hard power budget” – if you have to laugh, then g’head – by Mike Mulvaney, the President’s director of the Office of Management and Budget. In case it wasn’t painfully obvious, it means that this plan caters to defense and building up the military, while foreign aid and diplomacy can go suck it. Sort of. Naturally, the Democrats are just not that into this budget and are wondering how smart it is to cut spending in areas that work with defense to facilitate diplomacy in more volatile parts of the world. On the bright side, the plan calls for slashing funds to the United Nations. If the President could find away to turn all that pricey UN real estate into affordable housing, then we’d really be onto something. But now it’s up to Paul Ryan to get that budget passed in Congress, which is not likely, though, since rumor has it that this plan is Dead On Arrival.

Speaking of greasy of food…

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For some inexplicable reason, at 9:16 this morning,  McDonald’s official Twitter account unleashed this little gem:”@realDonaldTrump You are actually a disgusting excuse of a President and we would love to have @BarackObama back, also you have tiny hands.” Sure the message was deleted 25 minutes later but not before it was retweeted more than 600 times. Interestingly enough Trump is a mega fan of McDonald’s, and even starred in a commercial for the fast-food chain a few years ago. McDonald’s was initially mum on the incident but later said Twitter notified the company to say that its account had been compromised and the situation is currently being investigated. Incidentally, Barack Obama’s former press secretary and campaign adviser, Robert Gibbs, is McDonald’s head of communication. Not that that had anything to do with this particular tweet, mind you. However, my question is, if this Tweet boosts business, will they keep tweeting more insults to the President? Hmmm.

Warm and fuzzy…

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Snapchat look out. There’s a new Wall Street darling today and its one that actually warms hearts. Literally. Luxury Canadian coat maker Canada Goose made its much anticipated New York stock market debut, with 20 million shares being unleashed to the tune of $18 a pop. Initially priced at closer to $12 a share, the apparel company came out swinging raising a very impressive $255 million and hitting a market valuation of $1.88 billion. And why shouldn’t that be the case? After all, the coat maker scored close to $300 million in revenue for 2016 with a $27 million profit, proving that people really do dig the Canadian brand. Of course, no party is complete without a few crashers and for Canada Goose it was PETA, who were there to protest Canada Goose’s use of coyote fur on some of its offerings. The animal-rights organization even purchased $4,000 worth of shares, which might seem completely at odds with its mission. However, that $4,000 investment affords PETA the opportunity to submit its own letter to shareholders and buys it admission to Canada Goose’s annual shareholder meeting, where, presumably, the organization plans to up its protest game.