Trump’s Commerce Sec’y Gets Delisted; Valeant Unvaliant with Female Viagra; Rainbows and Unicorns: Oprah’s Effect on Weight Watchers

Oops, I did it again…

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Looks like things are getting awkward for Commerce Secretary Wilbur Ross Jr. Turns out Trump’s buddy has some Russian connections that might just put him in a bit of a pickle. It goes a little something like this: The Commerce Secretary has some investments in a shipping firm he used to run called Navigator Holdings. The problem here is that this particular shipping firm has ties to some people that are subject to U.S. sanctions. One of those ties is none other than Vladimir Putin’s son-in-law.  Mr. Ross knew that he was supposed to unload all kinds of holdings that could potentially be a conflict of interest once he took office. And he did. Mostly. Just not really with this one. To be fair, Mr. Ross has a lot of partnerships and it’s those partnerships that retain a significant stake in Navigator Holdings. But still. It’s a problem, even if there’s nothing necessarily illegal about his ties to this shipping firm since he didn’t disclose those ties in the first place. This new development, along with tons of other juicy information, came courtesy of the leaked documents known as the “Paradise Papers” from the Bermuda-based law firm, Appleby. As for Mr. Ross, that’s not the only reason he’s been making headlines today. Apparently, on those very disclosure forms, where Mr. Ross neglected to mention his dubious Russian ties, he also neglected to mention that he isn’t a billionaire. Not to say that he’s a pauper. Far from it. However, his estimated assets are less than $700 million, not the $2 billion he said he’s worth. Even worse, for Ross’s ego anyway, is that he’s getting dropped from Forbes 400 wealthiest list, because let’s face it, $700 million just doesn’t cut it.

Typical…

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Valeant is the big kahuna making good waves on Wall Street with an earnings beat that sent the stock up 15% today.  Much of that had to do with a 6% increase across its divisions not to mention the boost it got from unloading some of its debt. The company picked up $3.69 per share on a $1.3 billion profit. But that wasn’t the only reason for the boost. Remember Addyi? It’s the drug that was dubbed the “female viagra”  and Valeant bought it from Sprout Pharmaceuticals around two years ago for about $1 billion. Problem is, the deal had been bleeding money since the beginning. Now, two years later, Valeant actually gave Sprout shareholders $25 million just to take the drug back and put it back in business. But that was only after Sprout sued Valeant because it felt the drugmaker wasn’t marketing the drug well. In all fairness to Valeant however, plenty of medical experts just weren’t that into the drug. Because, besides saying that the drug wasn’t that effective, they also felt that potential users wouldn’t be inclined to taking Addyi given that there was a risk of fainting. Yes, fainting. In fact, the fainting would occur following alcohol consumption while taking the drug. I’m pretty sure anyone could see why that would be a problem.

Weight a minute…

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Oprah Winfrey seems to have the Midas touch, at least with Weight Watchers, as the stock rallied today way over 20% to 54.43, its highest price in four years. Revenue numbers were also ridiculously impressive, coming in at almost $324 million, a 15% increase over last year’s revenue during this period. But back to Oprah. The media titan bought a hefty chunk of the company two years ago and will once again grace Weight Watchers ads. Besides the Oprah effect, the weight-loss company put some major thought into both its digital operations and marketing campaign, which apparently paid off given the fact that the company increased its subscribers by 18% to 3.4 million. Here’s the fun part: Analysts thought the company would do pretty good anyway, bringing in 51 cents per share. But Weight Watchers did better than pretty good, adding 67 cents per share on a $45 million profit. That, by the way, was a $10 million increase from last year at this time. Which kind of has me starting to think about all the companies that good use Oprah on their boards. Twitter, maybe?  Oh, and did I mention that Weight Watchers also raised it full year earnings outlook? Indeed it did and now, instead of expecting to earn between $1.57 and $1.67, it now expects to make between $1.77 and $1.83.  And if that’s not impressive enough for you, consider that shares of Weight Watchers are up 360% just for 2017.

 

 

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Oprah’s Next Favorite Thing; The Force Does Not Awaken Hasbro’s “Girl” Toys; Amazon/New York Times Smackdown

Everything she touches turns to green…

Image courtesy of Mister GC/FreeDigitalPhotos.net

Image courtesy of Mister GC/FreeDigitalPhotos.net

Media titan-ess and Forbes’ 211th richest American, Oprah Winfrey, just added to her portfolio by scooping up a 10% stake in Weight Watchers. At $6.79 a pop, Winfrey snagged 6.4 million shares for a $43.2 million purchase.”I believe in the program so much I decided to invest in the company and partner in its evolution.” Awww. Apparently, her own personal experience with the company’s program led her to some very desirable results and now investors are hoping to see if the “Oprah Effect” can help turn around the struggling diet company, which has been in a perpetual slump for the last few years. So far it seems to be working as the stock soared 92% on the news of Oprah Winfrey’s involvement with a seat on the board as well as becoming an adviser to the company. Maybe that surge will help offset the 92% loss the shares have suffered since 2011, when the stock hit its peak of $85.76. The company had been losing ground to the tech age as dieting has been steadily going digital. Now Weight Watchers has begun to shift its program to focus on living a healthier lifestyle as opposed to just dieting and is jumping on the digital bandwagon by offering tech services to attract new customers and keep existing ones, Oprah and all.

May the force be with your profits…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The force is apparently with Hasbro as the toy company’s earnings are up 15% mostly thanks to licensing deals with Jurassic World and Star Wars. The toymaker was able to strike down analysts forecasts with profits coming in at $207.6 million and a $1.64 per share when predictions were for $1.52 per share. Hasbro easily beat last year’s same-period digits of $180.5 million and $1.40 per share. But the dark force still looms large for the toymaker and not just from the $132 million that was affected because of the strong U.S. dollar. Shares from its girl division fell 28% for the fourth straight quarter. Is it even P.C. for Hasbro to have a boys and girls category? Just wondering.  But the young consumers, to whom these girl toys are presumably marketed, have been shifting their preferences towards gadgets and tablets instead of blond hair and magic ponies. Which is too bad since that female-focused category accounts for 50% of Hasbro’s total revenues and remained at a very flat $.147 billion.

Right back at ya!

Image courtesy of digital art/FreeDigitalPhotos.net

Image courtesy of digital art/FreeDigitalPhotos.net

I’m guessing there will be no Amazon swag for the New York Times in the near (and distant) future. Still reeling from a scathing New York Times story from August, Amazon has finally fired back at the newspaper by calling into question its reporting capabilities.  Not that Amazon is the first entity to have to do this with the New York Times, but I digress. The story, published back in August, painted a very unattractive picture of the employee atmosphere at the e-commerce giant. Former White House Spokesman Jay Carney, who now serves as Amazon’s Senior Vice President for Global Corporate Affairs, strongly responded to the “newspaper of record” for blog Medium. Carney said it took two months to formulate its response to the New York Times because the tech giant was “hoping they might take action to correct the record. They haven’t, which is why we decided to write about it ourselves.” Among some of the pearls was the bit about former Amazon employee Bo Olsen who, when interviewed by the NYT, told reporters Jodi Kantor and David Streitfeld, that he saw many many employees crying at their desks.  Apparently he was making these observations while defrauding vendors and falsifying business records and subsequently resigned following an investigation. So much for the Pulitzer on that story.