Volkswagen Puts the Brakes on Farfegnugen; Will GoPro Become a No Go?; Mickey’s Magical New Venture

Auf wiedersehen…

Image courtesy of artur84/FreeDigitalPhotos.net

Image courtesy of artur84/FreeDigitalPhotos.net

Volkwagen’s stock took a big 20% hit today over a not-so-little emissions scandal that has investors screaming “Nein!” It seems that the world’s largest automaker – at least for the first six months of 2015 – used some software, that managed to mislead regulators into thinking that the German automaker was actually following rules regarding emissions when, in fact, it wasn’t. The Environmental Protection Agency and California are calling the software a “defeat device.” Catchy, huh? So now, Volkwagen wisely decided to stop selling certain diesel vehicles, including Jettas, Beetles, Golfs, Passats and even some Audis, until repairs and amends can be made. Close to 500,000 vehicles are part of this fiasco and account for about 20% of sales in the U.S. The offending vehicles emit nitrogen oxides that have a nasty little way of exacerbating respiratory conditions. If the EPA is lucky, it could fine Volkwagen a whopping $37,500 per vehicle, which is cray cray since I’m pretty sure the cars don’t even cost that much. At that rate, Volkwagen could shell out a ghastly $18 billion. However, in all likelihood, it probably won’t be that much. Of course, those fines don’t include any consumer lawsuits and false marketing accusations. How do you say “up the creek” in German?

Word up…

Image courtesy of jesadaphorn/FreeDigitalPhotos.net

Image courtesy of jesadaphorn/FreeDigitalPhotos.net

Looks like Alexander Eule can kiss his free GoPro swag good-bye. The Barron’s writer penned a scathing article on why GoPro is but a “one produce wonder.” Likening the device to the relic we call Blackberry, Eule said that GoPro’s got a ton of competition headed its way and it’ll be a miracle if the company’s stock stays above $25 a share. GoPro, once a Wall Street IPO darling, made an auspicious ticker debut back in June of 2014, jumping over 30% from its initial offering of $24 a pop. Peaking at $98 in October 2014, the stock has been losing wind pretty steadily and is currently hovering today between $32 and $33 a share. While some have wondered if Apple might pick up the company, others have said no way. Why would Apple bother with an acquisition like that when it can just dip into its vast resources and talent and make a similar product. And that is basically what its doing as evidenced by its recent patent report which sent shares of GoPro down 12%. Apple might just be the least of GoPro’s competition worries as Chinese smartphone maker Xiaomi also has a similar device in the works. In case you were wondering, GoPro has not commented on the story. Yet.

For real…

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Who better to invest on Virtual Reality technology than one of the finest purveyors of fantasy and make-believe? And so it begins that the Magical Kingdom/mega conglomerate corporation we call Disney is one of several companies throwing money at  VR start-up JauntVR. Hollywood is chomping at the bit to get in on the entertaining aspects of VR action that offers viewers a striking 360° perspective and Disney is hoping its $66 million contribution will see some exciting fiscal return action. Jaunt is hoping to emerge as the go to platform for anybody with a lot of money who uses cameras for a living. Even if they are into GoPro. There’s a whole slew of people and companies who have already used the technology, including Sir Paul McCartney and The North Face. ABC News took the tech to Syria to make a documentary featuring curators attempting to save antiquities in the war-ravaged country. Jaunt expects to use their new found cash to scale up its tech, help with growth and provide a nice welcome addition to its previously raised $100 million. If you’re at all curious what all the fuss is about, see for yourself at http://www.jauntvr.com/content/.

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…

Image courtesy of renjith krishnan/FreeDigitalPhotos.net

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…

Image courtesy of scottchan/FreeDigitalPhotos.net

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…

Image courtesy of hywards/FreeDigitalPhotos.net

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.

Is Xiaomi the Next Big Thing to Hit the Smartphone Scene?; Russia’s Ruble in the Rubble; Shake Shack Shaking Up Wall Street

Third’s the word…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Here’s a riddle for you: If Samsung is the number one smartphone maker in the world, with Apple perched at the number two spot, then who has taken third? Hint: It’s not LG. Or Nokia. Or Motorola. Or… In fact, the number three smartphone maker in the world has yet to reach our shores, even though the company’s got a $45 billion valuation and is slated to become the most valuable IPO. Ever. In case you haven’t figured it out – and it’s okay if you didn’t –  I am talking about Chinese smartphone maker Xiaomi. The company which, just pulled in another $1.1 billion in funding, is number one in the mammoth Chinese market. It also happens to be the fastest growing smartphone maker and the most valuable start-up in the world right now (yes, even more so than Über and Pinterest, if you can believe it). And by fast I mean the company’s sales are up 211% in the third quarter, having taken a 5% bite out of the market share. Xiaomi, whose Mi4 smartphone coincidentally, bears a striking – make that very striking – resemblance to the iPhone, actually makes most of its money from apps and add-ons, and not from the phone itself. It also apparently has some nifty marketing strategies, though I can’t weigh in on that one. Xiaomi is currently focusing on branching out into places like Indonesia, Russia and Mexico with no immediate plans to come to the US, which clearly hasn’t been a problem for it.

Is that a recession I smell…

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Image courtesy of David Castillo Dominici/FreeDigitalPhotos.net

Russia’s not having a very good week. News is out now that the economy there shrank for the first time in five years. The GDP fell by .5% with the Russian government saying that next year the GDP could go down by as much as 4%. How do you say “yikes” in Russian? The ruble is continuing its slide,  falling the most in two weeks, and is about 40% weaker than the dollar. It’s down by about 70% since the beginning of the year. Of course the international sanctions imposed on Russia by other countries who were not cool with its incursions into the Ukraine are being blamed. And, of course, Russia then decided to block imported food – a move that has not been good for anyone on either side of the issue. Then there’s the price of oil which keeps dropping and dropping and…well, it’s no fun to see oil numbers drop if you happen to be the largest energy exporter and well, that’s exactly what Russia is.

Yeah, it’s that good…

Image courtesy of KEKO64/FreeDigitalPhotos.net

Image courtesy of KEKO64/FreeDigitalPhotos.net

Apparently the Shake Shack is so good that Wall Street will get to partake of its delicacies in the form of a $100 million IPO that the company just filed today. Conceived by restaurateur Danny Meyer, the chain will be listed on the New York Stock Exchange under the aptly named ticker symbol SHAK. The company began as a single “shack” in New York City’s Madison Square Park and quickly grew to 63 locations…worldwide, with half of those operated by licensees. Shake Shack reported sales of $140 million in 2013, a scrumptious $81 million gain from the year before. Investors are awfully curious to see how Shake Shack will fare considering the mixed results the market has seen from food companies like perennial fave Chipotle to less than stellar performer Noodles & Co. If that’s not enough to whet your IPO appetite, then how about the fact that they pay an average hourly wage of $10.70 with health benefits and paid time off?