American Apparel Gets Offer with Strings; Another US Company Heads to the Emerald Isle; The Yogurt Wars. Enough Said.

Down but not out…

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American Apparel might be bankrupt but that are still a few investors who would like to help revive the company. And it’s the latest offer that’s got people talking. Hagan Capital Group, along with Silver Creek Capital Partners, want to scoop up American Apparel for a sweet $300 million. And one more thing…they want Dov Charney reinstated. It’s the same Dov Charney who is also the founder and former CEO of American Apparel, and who was booted following some sexual misconduct allegations, not to mention other allegations involving the misuse of corporate funds. Just saying. Incidentally, Dov Charney hired Cardinal Advisors to help him line up investors who would see to it that he would be reinstated at the company he founded. How clever indeed. Several backers strongly feel that the company’s performance went down after Charney was shown the door.  Chad Hagan of Hagan Capital Group feels Charney was wronged adding, “We are willing to be friendly and genteel, but the fact is we want this company and we want Dov back in…We are deadly serious.” Not sure what he means about the deadly serious part but that is still nothing short of a ringing endorsement for Mr. Charney.

Invert this…

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Image courtesy of jesadaphorn/FreeDigitalPhotos.net

After six long months, pharmaceutical company Baxalta International Inc. finally said yes. Of course that yes comes with a $32 billion check but hey, it’s still a yes. The lucky suitor is Ireland-based pharmaceutical company, Shire Plc., which is offering Baxalta shareholders approximately $45.57 in cash and stock – an offer that represents an approximately 38% premium. The two companies expect to crank out $20 billion in revenues in the next year.  It’ll be helped by that fact that Baxalta’s corporate tax rate will drop from a very onerous 23%-24% in the United States, to a more corporate friendly tax rate of 16%-17% in Ireland. Gotta love an inversion. Shire’s main product is Vyvanse, used to treat symptoms related to ADHD.  But it’s Baxalta’s drug treatments that has corporate pharmaceutical tongues wagging. The company’s treatments focus on rare blood conditions, cancer and immune system disorders. While a relatively small population requires those treatments, those treatments are insanely lucrative, bringing in mega bucks for drug companies that offer them. In fact, 65% of Baxalta’s revenues come from treatments for rare blood disorders.

Not so good bacteria…

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Believe it or not it’s a yogurt smack down as Greek yogurt churner Chobani took aim at its competition last week. But now that competition is fighting back. Just three years ago, the Greek yogurt industry was growing at a rate of 60%. How ironic that the opposite is true for Greece. But I digress. In any case, the industry is now only growing at about 5%, with Chobani being the largest Greek yogurt seller in the world. The competition to differentiate is fierce – that is, if such a term can be applied to yogurt. Chobani launched an ad campaign on January 6 targeting Dannon’s use of sucralose – an artificial sweetener that has been FDA approved for food for the last 15 years. Sucralose apparently has chlorine in it and should therefore cause a potential yogurt enthusiast to purchase a container just to go ahead and chuck it – just like in Chobani’s ad. Which is weird because wouldn’t you first read the ingredients before shelling out money for the product? Just saying. Chobani also goes after Yoplait Greek 100 over its use of potassium sorbate, an ingredient that Chobani’s commercial actor points out is also used to kill bugs. Yum. Dannon wasted no time in sending out a cease and desist to Chobani charging that its claims are “false, misleading, disparaging and deceptive.” Chobani filed a complaint against that cease and desist letter arguing that its campaign for it “is not false, misleading…” Well, you get the picture.

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A Green Giant Farewell; Mobile-ads: Verizon Set to Unleash Service; Everything Is Fiscally Awesome at Lego

Yo ho ho…

Image courtesy of  Mister GC/FreeDigitalPhotos.net

Image courtesy of Mister GC/FreeDigitalPhotos.net

It’s time for the Jolly Green Giant to pack his bags. Together with Le Sueur, the two brands are getting some new digs over at B&G Foods, home to favorites such as Cream of Wheat and snack sensation Pirate’s Booty (a personal fave). B&G is paying $765 million in cash for the joy of adding the oversized brand symbol to its coffers and is expecting the Giant and his 160 plus products to bring in net sales of over half a billion, adding 60 cents per share. Jolly Green Giant and Le Suer are currently under General Mills, however, the maker of  Cheerios has been noting a shift in consumer preferences and has decided now would be a good time to unload the two companies. Apparently, shoppers are preferring fresher selections, as opposed to the sauce laden and frozen offerings that Green Giant and Le Sueur crank out. General Mills, which also has Yoplait yogurt, will now focus its efforts – and of course, money – into cultivating its brands and geographical locations that have more potential. It will also put a bit more oomph into some edible health and wellness endeavors. Which basically means it will shift gears to whatever products and areas will bring in the most amounts of cash. Sounds fair.

You’ve got ad-sales…

Image courtesy of twobee/FreeDigitalPhotos.net

Image courtesy of twobee/FreeDigitalPhotos.net

AOL (remember them?) also did a little shopping today picking up Maryland-based Millennial Media Inc. to the tune of $250 million to broaden its mobile-ad market share. At that price, the company was bought for $1.75 a share, a 31% premium to its closing price on Wednesday. Millenial took in almost $300 million in sales with an $83 million net loss last year. Verizon Communications Inc picked up AOL back in June for a trifle $4 billion, in an attempt to beef up its mobile ad technology, something at which AOL apparently excels. Verizon AOL now has big plans to challenge Facebook and Google (is that even possible?) who currently reign supreme over the mobile-ad market, and unleash its own mobile streaming video service called Go90.

Brick by brick…

Image courtesy of ArtJSan/FreeDigitalPhotos.net

Image courtesy of ArtJSan/FreeDigitalPhotos.net

Lego may not be a publicly traded company, but the company sure manages to pull in some boffo numbers, even surpassing Mattel as the world’s largest toymaker. Which is particularly insane since it only makes…well, Lego.  And while Mattel’s Barbie, Hot Wheel and Fisher-Price products still have sway, those toys, can’t seem to get a plastic leg up on Lego’s mesmerizing Ninjas and elves and…well, everything else. In fact, Mattel’s revenue fell almost 5% to $1.91 billion, with unwelcome help from Barbie and company. Lego, however, benefitted from foreign currency swings, not to mention a boost from The Lego Movie. The Danish company scored 3.55 billion Danish kroner, which translates to $537.5 million in the first half of the year and took in a 31% jump in profits. The company’s revenue also rose 23% to $14.14 billion. And there’s no reason to forecast that theses numbers won’t continue to rise. With a new Star wars movie coming out, which always does a fine job of boosting Lego sales, and a new video game, Lego Dimensions, due out late September, the toy company’s outlook is nothing but rosy.

So Long and Goodbye to Twitter’s Dick Costolo; Where Have All the Cereal Eaters Gone for General Mills; Hillary Clinton’s Bringing Her Grassroots Game On

What a long strange social media trip it’s been…

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

Dick Costolo might just have some extra time on his hands tomorrow seeing as how today is the CEO’s last day at Twitter. Okay, maybe not so much time. He’s still going to remain on the board. Costolo has the dubious distinction of having been the longest serving CEO at Twitter and it was under his leadership that the company even went public, leaving it with a $23.5 billion valuation. But from an all-time high of $69 back in January of 2014, the stock seemed to have lost its mojo and well…apparently so did Costolo.  Dick Costolo had mentioned in an exit interview how he underestimated the pressures and short-term fiscal expectations of running a publicly traded company. The soon-to-be ex Twitter CEO took a lot of heat, and not just from investors who were underwhelmed by Twitter’s slow growth and disappointing revenues. Many critics also thought Costolo didn’t do enough to stop abuse and terrorist activity.  Then there were all these pesky geopolitical issues that came up. Like how people that it was odd, and even a bit hypocritical of Twitter, that Iranian authorities use the social media platform all the time to communicate their thoughts and evil decrees, yet the citizens of Iran are forbidden to use the micro-blogging site. Until Twitter finds a more permanent solution, Jack Dorsey, who conveniently enough, is one of Twitter’s co-founders, will serve as its interim CEO.

No love for the Cheerios…

Image courtesy of  bearvader/FreeDigitalPhotos.net

Image courtesy of bearvader/FreeDigitalPhotos.net

For some odd reason, sales of General Mills are down. Well, the reason, in fact, is not that odd. It seems the gluten-free food movement and high-protein diets have been biting into the Cheerio maker’s numbers sending sales and shares down for its fourth quarter. Let us also not forget to put some blame on the strong dollar of ours that affected sales for the company in other parts of the world. Then there’s the issue with its Green Giant brand. Yeah, they own that too. General Mills had to write down the value of the brand that sports the over-sized, leafy green dude for a whopping $263 million. It seems that, in addition to the gluten-free and high-protein trends, consumers also now prefer their veggies fresh as opposed to the frozen varieties that Green Giant does so well. However, it should be duly noted that Green Giant still does well and scores plenty of cash for the company. Just not as much as it used to. General Mills, which also owns Yoplait and Betty Crocker, pulled in about $187 million in profits with 71 cents per share added and revenues of $4.3 billion. Analysts expected revenues to come in closer to $4.5 billion and 75 cents added per share.

This means war…

Image courtesy of digitalart/FreeDigitalPhotos.net

Image courtesy of digitalart/FreeDigitalPhotos.net

It really does’t matter how you feel about Hillary Clinton running for President. What does matter are her numbers.  As in, the number of dollars she already banked for her presidential primary war chest. That magical number has already hit $45 million, exceeding the $42 million President Obama raised for his  2011 primary bid. That magical number also managed to exceed Hilary Clinton’s previous 2008 $36 million presidential primary war chest. I dare you to say that one three times fast. And don’t think for a second that all that cash is coming from just a small handful of wealthy donors. Hillary Clinton has garnered some major grassroots support with over 91% of contributions coming in at $100 or less. Yeah, she’s that popular.

American Apparel Battles; Not So FedEx-cellent Earnings; Cheerie-Woes

Gone but not forgotten…

Image courtesy of biosphere/FreeDigitalPhotos.net

Image courtesy of biosphere/FreeDigitalPhotos.net

Dov Charney may be officially ousted from American Apparel but wouldn’t you know it…the former CEO, who was booted over a number of misconduct allegations,  still has more than a few friends left at the company he founded. Thirty American Apparel executives just can’t bear the thought of manufacturing retail with provocative ad campaigns without Mr. Charney’s particular skill set. They are a bit peeved that their feelings were not taken into consideration and, in a carefully penned letter, asked the board to reconsider its decision adding, “he makes this thing tick.” A beautiful sentiment for a man who had a slew of sexual harassment allegations against him. Incoming CEO Paula Schneider will become Charney’s official replacement and she gets to plod through the mammoth task of trying to reverse the $300 million in net losses the company racked up since July of 2010. Charney, though, won’t be totally on the outs seeing as how he remains the largest shareholder in the company with a 43% stake in it. He does, however, have to share those voting rights with a hedge fund, presumably to keep him from exercising those rights exclusively for his  questionable benefits.

Shipping dipping…

Image courtesy of Mister GC/FreeDigitalPhotos.net

Image courtesy of Mister GC/FreeDigitalPhotos.net

FedEx had a good quarter. Just not good enough for Wall Street. Earning’s for the shipping company were up a very merry 23% thanks in part to a drop in fuel prices. The company earned $616 million and $2.14 per share. That figure was up from $500 million and $1.57 per share the year before. Revenue was even up 5% to $11.94 billion. But the hardly-ever-content Wall Street analysts wanted to see $2.22 per share and revenues of $11.97 billion. Next quarter should be more telling as this is the company’s busiest time of year. Here’s hoping that FedEx won’t repeat last year’s shipping debacle when over 2 million packages failed to make it to their recipients by Christmas Eve – a gaffe that was attributed to some icy weather and an unforeseen rise in shipping demand. Which I suppose is the one of the reasons an additional 50,000 employees were added to its workforce this season.

Soggy…

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

Image courtesy of rakratchada torsap/FreeDigitalPhotos.net

General Mills, like many of its breakfast-oriented peers/competition, posted second quarter earnings that were nothing to crunch about. Profit for the maker of one the world’s most arguably famous cereals, Cheerios, dropped by a whopping 37%. With consumer tastes  changing, shoppers aren’t exactly spending as much time and money on cereals and other products from the company. But at least its Yoplait and snack divisions are up. A bit. General Mills earned $346 million and $0.80 per share. But Wall Street wanted to see $0.03 more on those shares. The company pulled in sales of $4.71 billion, which seems like a lot of Cheerios, except that Wall Street was gunning for $4.79 billion. Sales in the US alone came in at $2.86 billion but it was still a 4% drop.

 

Delia*s Final Chapter;New Mortgage Nirvana Thanks to Fannie Mae and Freddie Mac; Frech Toast Crunch Epic-y Comeback

Down and out…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Delia*s is joining the ranks of the bankruptcy protected now that it has officially filed for Chapter 11. While several of Delia*s teen apparel cohorts, including Abercrombie & Fitch and Urban Outfitters, are merely posting very unfashionable earnings, Delia*s will be getting $20 million just to help liquidate and close down its stores. The retailer, to which bright-eyed teenagers once flocked, can no longer compete with the H&M’s and Forever 21’s of the world. And don’t even get me started on competing with the behemoth that is Amazon. The New York-based chain has 92 stores scattered in malls across the country. With $74 million in assets and over $32 million in debt, its no wonder that Delia*s CEO Tracy Gardner and COO Brian Lex Austin-Gemas resigned. It’s probably safe to say that no one is mourning their departure – well, except maybe for them.

It’s baaaaaaaack…

Image courtesy of foto76/FreeDigitalPhotos.net

Image courtesy of foto76/FreeDigitalPhotos.net

Justin Timberlake brought sexy back so its only fair that General Mills is bringing back French Toast Crunch. Yes, my fellow cereal aficionados, the dark days are behind us as the maker of Cheerios, Yoplait and Progresso Soups has finally found the wherewithal to bring us back our French Toast Crunch. The sister cereal to the ubiquitous and oft-loved Cinnamon Toast Crunch has been absent from grocery shelves in the United States for almost a decade – I shutter to think. With the invasion of Greek yogurt and fast-food wars breaking out, the cereal was unceremoniously discontinued as other alternatives shoved their way onto the breakfast scene. But consumer demand brought General Mills to its corporate knees, together with an online petition and a Facebook page dedicated to resurrecting the sweet, breakfast sesnation. Besides, General Mills figures those kids who group in the nineties downing French Toast Crunch are now at that age where they are paying for their own cereal now (at least they should be) and can buy it themselves (at least they should be).

3% down with that?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

There are some very lucky soon-to-be first-time homeowners milling about thanks to Fannie Mae and Freddie Mac. New terms established by the companies are allowing applicants to put up just 3% down payment to get them into a new home. That’s down from 5%, fyi. Fannie Mae is starting to offer that deal December 13. Looking to refinance? How does reducing your equity to 3% sound? If you haven’t owned a home in three years, guess what? You still qualify.  Starting in March, Freddie Mac will let lower-income first-time home-buyers hand over a 3% down payment provided they agree to housing counseling. Melvin Watt, head of the Federal Housing Finance Agency and the dude who oversees Freddie Mac and Fannie Mae, wants to spur lending to minorities and young adults because the lenders have made more stringent standards following the crash, and the tens of billion of dollars they had to pay towards lawsuits for underwriting less than ideal loans. Republicans, however, are not digging the idea, finding the whole thing too risky and eerily reminiscent of the policies that led up to that awful crash – from which the country is still not fully recovered.