Alphabet Soup: Google Parent Hits a Milestone; Premium Quality: Tesla Could Get Even Pricier; SEC Gets SCOTUS-Smacked

Whoa…

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Google’s parent company, Alphabet, broke the $1000 per share ceiling and yes, that is a vey impressive feat. Even for Google. What’s more impressive, is that this milestone happened on the very same day that shares of Apple, the world’s most expensive company, was downgraded. Not that Google would be experiencing any schadenfreude, or anything of the sort. In any case, Alphabet can pat itself on the back for becoming the third S&P 500 company to break the $1000 barrier, following in the illustrious footsteps of Amazon – who achieved that milestone just last week – and Priceline. Yes, Priceline. Remember them? To be fair, Google had, once upon a time, hit $1,200 a share but then the stock split. And then it became Alphabet, and the rest is S&P history.  Of course Berkshire Hathaway also trades above $1000. Way above $1000. In fact, if you’re inclined to spending $250,156.00, you could pick up a single solitary share of Warren Buffett’s company. But then again, what’re you gonna do with just one share?

Cry me a river…

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A new Tesla was sounding really good, at least up until the weekend when Automotive News reported that AAA is gearing up to raise its insurance rates on the super-shmancy electric automobiles. But that’s just AAA insurance. The verdict is still out on whether other insurers will follow suit. It’s all because of some very unflattering data detailing Tesla’s higher-than-usual and more expensive claims for both the Models S and Model X. In fact, those pricey claims could mean a 30% premium increase on Teslas, which makes you wonder if the fuel savings is even worth it. Tesla seems to be offended by the new data, calling it “severely flawed” and “not reflective of reality.” Apparently, the data had the audacity to compare a Tesla to a Volvo station wagon. I mean, c’mon? A Volvo station wagon? Not that I have anything against Volvo station wagons. Some of my best friends drive Volvos. And station wagons. It’s just that a station wagon is the last thing on my mind when fantasizing about being behind the wheel of a Tesla. Just saying.  In all fairness, however, Tesla boasts some of the most advanced safety features in their automobiles. Yet, none of that seems to help given the car’s expensive collision costs. In fact, claims for the Model S are 46% higher than other cars, and its losses come in at 315% higher. Yikes. Station wagons aside, those are some very un-sleek numbers. Ironically, Tesla’s medical payment claim frequency is below average while its personal injury protection losses are very low. So take that, Volvo!

Can’t touch this!

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Score one for Wall Street because it looks like the SEC won’t get to grab all those ill-gotten gains like it used to. At least according to the U.S. Supreme Court, which just ruled – in a 9-0 decision –  that the SEC’s use of “disgorgement” now has to face the wrong end of a five year statute-of-limitations. Disgorgment is the act of repaying money that was attained illegally, typically by people and firms in the financial industry.  For this latest Wall Street victory, the securities sector can thank Charles Kokesh, a New Mexico-based investment adviser. It all started back in 2009 when the SEC sued Kokesh for misappropriating funds from his investors. He may not be a saint, but he was ordered to pay $2.4 million in penalties plus another $35 million – which was for disgorgement purposes. The problem, Kokesh and his lawyers argued, was that much of that $35 million disgorgment figure had happened outside a five year statute of limitations. Instead of $35 million, the disgorgment should have been closer to $5 million, which is quite a substantial difference. As for the SEC, this new ruling is going to prove to be a real downer for the agency seeing as how it has since collected $3 billion for disgorgment claims.  Oh well. Maybe it’ll discover a new way around that minor, yet pesky obstacle.

 

Volvo’s Heads for U.S. Shores; Etsy’s Coming Unglued; Apple Looks for Greener Pastures…in China?

They’re boxy…but safe…

Image courtesy of  Vichaya Kiatying-Angsulee/FreeDigitalPhotos.net

Image courtesy of Vichaya Kiatying-Angsulee/FreeDigitalPhotos.net

Volvo’s got big news. Yes. Volvo. Big. News. The car once known for its safety record, not to mention, its boxy style, is setting up shop on American shores. The Swedish auto manufacturer, which is now owned by Chinese company Geely Holding Group, will be plunking down $500 million for a facility in South Carolina.  Apparently, the master plan to is to rekindle the love Americans once had for the car, which has seen its market share in the US dwindle steadily. In fact, the new American Volvo plant is expected to be able to roll out some 100,000 cars a year – which seems a bit high considering the car maker only managed to sell about 56,000 of them in the last year. The new plant is expected to create some 2,000 jobs and you can start driving your American-made Volvo by 2018. But the move has got a lot of people scratching their heads as to why Volvo opted to go to South Carolina as opposed to Mexico where it’s so much cheaper to produce…well, everything. But South Carolina doesn’t seem to be complaining about it and apparently it’s the place to be as the state is home to some 250 car makers. So welcome to America, Volvo.

Not so crafty after all…

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Image courtesy of franky242/FreeDigitalPhotos.net

It made for a bedazzling IPO, but Etsy’s glitter is not gold as a Wall Street analyst said that as many as 5% of goods on the crafty website could be fakes. So just how many items is that exactly? About 5 million, give or take. Can you guess where the stock went after that damning little analysis? The stock made its much-heralded IPO opened last month at around $30. As I write this, the stock is hovering at $20.67, down about 9% just from today.  Researchers over at Wedbush say that NFL, Louis Vuitton, Disney and Chanel (to name, but a few) could theoretically make some very ugly copyright infringement cases against the online retailer. That’s more than enough to send investors running. Even though analysts say there’s a chance Etsy could avoid getting directly blamed, the issue of fakes could still make big, bad, fiscal problems by causing reduced fees, the big Etsy money generator. As for that stock price, which had many wondering if it wasn’t just a bit too high to begin with, well Wedbush seems to think that the stock is going to come down a lot and settle in to a more realistic price point of $14 per share.

Cupertino, it ain’t…

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Image courtesy of foto76/FreeDigitalPhotos.net

Apple is teaming up with the World Wildlife Fund and has plunked down an undisclosed amount of money for…forests…in China. As part of an environmental initiative on Apple’s part  – not necessarily China’s – the company behind the iPhone and iWatch wants to “power all its operations worldwide on 100 per cent renewable energy.” That is so friggin’ noble.  As you sit there playing Candy Crush on your iPad, the powerhouses behind that electronic marvel will be busy protecting about 1 million acres of forest in an effort to responsibly manage a geographical area that houses all kinds of useful natural materials that everyone needs.  And it’s all so ironic considering that China isn’t exactly a beacon of light for environmental causes. In fact, it holds the dubious distinction of being the number one environmental offender in the world. But since most of Apple’s products are manufactured there anyway, it made sense to take part in such an endeavor. Well, sort of.