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Here Come the Brides Same-sex marriage ices the cake for some small businesses in the wedding industry.
(FORTUNE Small Business) – Same-sex marriage may be controversial, but one thing's for sure: It's good for a lot of small firms. With an average individual discretionary income of $38,000--35% higher than the national average--gay Americans are expected to add a nice chunk of change to the $120-billion-a-year wedding industry. "This is a whole new market, a wonderful chance for large and small companies to make a big step," says Todd Evans, CEO of Rivendell Media in Mountainside, N.J., a company that places ads in gay publications. "If you're smart, you will jump on the bandwagon."
Nancy A. Levy, owner of event planner Weddingtown USA in Garden Grove, Calif., agrees. Last fall--before the Massachusetts Supreme Court legalized same-sex marriage and San Francisco mayor Gavin Newsom made headlines performing gay wedding ceremonies--Levy suggested to her vendors that they target gays and lesbians. "The money is the same," Levy says. She even organized a gay and lesbian wedding expo in Orange County and has two others planned for this year. Parker Communications, a gay-owned publishing firm in Alexandria, Va., and Pride Productions, a Las Vegas wedding planner, have also thrown expos.
Some business owners and their clients, however, object to gay marriage on religious grounds. The Wedding Chapel in Galveston used to perform gay and lesbian weddings, but it stopped a year ago when new owners took over. "We don't believe in it," says current co-owner Nathan Gratch, who says that because many of his customers feel the same way, gay weddings are bad for business. "People are very spiritually oriented, and they are concerned." And the tenuous legal status of same-sex marriages--the Massachusetts legislature recently passed an amendment banning gay marriage--suggests that the new market may face setbacks.
Still, many companies are tailoring their offerings to meet the new demand. Here's a sampling.
Jamie Lynn / Cake Toppers
Firms have sold same-sex cake toppers online for a while. But when one of the nation's top wedding-accessory companies gets into the game, you know a major shift is underway. Chicago-based Jamie Lynn offers a line of interchangeable cake toppers--which allows couples to mix and match brides and grooms of different genders and ethnicities--that has become a top-ten seller for the company ($55, jamielynn.com). "We purposely made it so that you can have two brides or two grooms together," says Steven Kahn, vice president of the privately held company. "We don't want to offend anybody, so we don't advertise it outright, but people are pretty quick to realize that's what we did."
OutVite / Invitations
Last summer a few gay and lesbian employees at online-invitations firm eInvite drew up a business plan for a separate division of the company that would cater to the gay and lesbian market. The result: OutVite.com. So far OutVite receives five orders a day, much more than the couple of orders a week the privately held company had anticipated. "We had noticed on eInvite over the years that a lot of gay couples were doing commitment ceremonies," says Micah Chase, the 38-year-old president of OutVite, based in West Boylston, Mass. "Now all the political activity has made business pick up." Among the most popular designs are the Two Tuxes and Two Gowns invitations ($189 for 100, outvite.com), and the His Towels and Her Towels shower announcements ($119 for 100).
I Do Too Bridal & Formal / Women's Tuxedos
People should be able to wear what they want and be themselves," says Jill Story. So she opened a bridal store a year ago in Huntington Beach, Calif., to cater to what she calls forgotten brides--those remarrying, pregnant women, and lesbians. "I'm floored nobody out there is really doing this yet," she says. Her shop offers a wide array of dresses, but Story also customizes women's tuxedos, sometimes adding ruffles or embroidery ($150 to rent, $250 to $500 to buy; idotoo.com). She hasn't advertised her wares yet, but Story has already worked with six lesbian couples. She expects same-sex marriage to be a "real boon" when she launches her online and television advertising campaign in June.


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Popular classic men’s magazine Playboy will become the latest to join the growing list of companies launching non-fungible tokens (NFT) through a partnership with Nifty Gateway.
The company used to mint Playboy collectible keys to allow fans to gain access to the mansion. However, it has now decided to provide collectibles in the cryptographic form.
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Playboy was launched by Hugh Hefner decades ago, catering to the men and open sexuality niche. The magazine has been in print for many years until it started producing online content.
The tokenized photography archive has been built up for over 67 years since the first print was produced.
An enormous business opportunity
The brand did not reveal specific details about the NFT Drops on Nifty, but it stated plans to offer support artists it believed to have been underrepresented who want to enter the NFT art community.
The first NFT drop will be in collaboration with Mike Parisella, former Playboy magazine contributor. The second drop is set for June, with a partnership with 3D artist Blake Kathryn for the creation of pride-based series of NFTs.
Playboy’s chief brand officer Rachel Webber, spoke about the development, stating that the company “sees the digital asset revolution as an enormous business opportunity.”
He added that the company is seeing massive growth potential by incorporating tokens into its streetwear business. The proceeds from the NFT token sale will go to a good cause, according to the brand.
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The NFT industry keeps growing
The NFT community is expanding at an alarming rate, with several top artists registering their intent to lunch an NFT token. The sports industry has also joined the train. Luka Garza has become the first college basketballer to release an NFT token after recently releasing a unique NFT for auction on OpenSea. The auction will be closing by April 9. At press time, four persons have already placed bids, with the highest bid of 0.67 ETH so far.

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According to the 2040 Sacramento General Plan, the city has proposed banning new gasoline stations and adding to existing stations unless the sites provided electric vehicle charging. Fuel sites would be required to “provide 50kW or greater Direct Current Fast Charger (DCFC) electric vehicle charging stations on site at a ratio of at least 1 new charging station per 1 new gas fuel nozzle,” as stated in LUP-4.13 in the plan.
The California Fuels and Convenience Alliance (CFCA) submitted a letter of opposition to the city, stating:
It is disheartening to see yet another city consider a regressive policy that disproportionately harms small, minority businesses and consumers the most. Gas station bans threaten local economies with increased job loss, decreased tax revenue and will only lead to more pain at the pump for consumers. Empowering businesses, promoting competition and considering the diverse economic landscapes within a community are vital elements in shaping a resilient future for the fuel and convenience industry.
The CFCA also stated that when enacting bans, “it is imperative to account for the intricate interconnections that exist with other major sectors.” The state association highlighted the major role that the fuel and convenience industry has on other industries.
“The fueling and convenience industry also supports $7.4 billion in labor statewide,” the CFCA wrote. “While there is an argument to shift these jobs to the electric and hydrogen sectors, the existing limiting infrastructure does a disservice to Californians who depend on the current fuel industry for their livelihoods.”
The CFCA conducted a study on the impacts of state and local bans on new construction and upgrades to fueling establishments in California. The study showed the negative consequences of such bans, with the loss of jobs, income and small business opportunities; loss of fueling options for customers; loss of opportunity to convert fueling establishments to other alternative fuels; and less competition and higher prices for gasoline.
The CFCA is urging its own members to submit comments to the Sacramento Planning and Design Commission.


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Residents swap jewellery for bars
With gold prices remaining extremely volatile over the past few months, investment demand for gold has taken off even as jewellery sales remain subdued.
According to World Gold Council data, customers in the UAE are according more attention to gold as an investment option, with demand for gold bars and coins in the country rising 12 per cent year-on-year in the third quarter of 2011 even as demand for jewellery plunged 24 per cent during the same period.
The increase in gold as an investment has been a constant feature in UAE’s demand trends this year, with demand for gold bars and coins rising 21 and 6 per cent y-o-y in the year’s first and second quarters, respectively. In contrast, demand for jewellery rose 5 per cent in the first quarter but declined 1 per cent in the subsequent quarter.
Overall, UAE’s investment demand for gold (in terms of gold bars and coins sale in tonnes) is up more than 12 per cent in the three quarters this year compared with the same period of 2010, while jewellery demand is down by 5.25 per cent (in tonnes) during the same period.
It must be recalled that gold made its all-time high of $1,920.30 per ounce on September 6, but has since declined and is currently trading at around $1,700/oz levels. Anecdotal evidence suggests that while jewellery demand is back on track in the ongoing quarter, investment demand has accelerated further as customers seem to believe that the current decline in gold prices is temporary.
“Traditionally, we have more women customers at our outlets,” said the manager of a large gold retailer’s outlet in Dubai’s Mall of the Emirates, who requested anonymity as he is not authorized to talk to the media. “Men of course accompany their wives or other women relatives, and basically assist in the decision-making and payment process,” he said.
“In the past few months, however, I have noticed an increasing number of men walk in, without their spouses, and enquire about current gold rates and eventually buy gold bars or coins,” he said.
Trends in the UAE are in line with global patterns, with worldwide jewellery demand falling 10 per cent in the most recent quarter, while investment demand for bars and coins surged 29 per cent.
Globally, gold sales in the third quarter of 2011 rose 6 per cent year-on-year to 1,054 tonnes, worth a record $57.7 billion, data shows. The World Gold Council attributed this increase, despite record prices, to an unprecedented rise in investment demand.
“A strong rise in investment demand drove the growth in overall demand, as investors across the globe sought to protect their wealth, diversify their risk and benefit from gold’s strong returns,” WGC said. “Jewellery demand contracted in the face of record gold prices and challenging economic conditions,” it added.
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March 20, 2020
The fallout from the coronavirus is likely to impact every facet of the economy, and the housing market is no exception. The good news is that the housing market was… Read more
March 19, 2020
We are beginning to see the number of Americans who need unemployment benefits rise as “non-essential” businesses across the nation close. While the worst is yet to come, the numbers… Read more
March 18, 2020
Regulators have come forward to warn Americans that they are putting their money at risk by withdrawing from the bank. The move comes after some branches have reported running low… Read more
March 17, 2020
Retail sales fell 0.5% in February, suggesting that consumer spending may have been slowing, even before the coronavirus hit the U.S. full force. The drop follows a substantial increase of… Read more
March 13, 2020
The World Travel and Tourism Council (WTTC) has released an estimate of how profound the fallout from the coronavirus outbreak could be for the tourism industry. The organization, which consists… Read more
March 11, 2020
The coronavirus outbreak has roiled markets in the U.S. and across the globe. While the impact on the markets is readily apparent, the true economic cost of the outbreak may… Read more
January 29, 2020
The recent coronavirus outbreak has already enacted a human cost. At the time of writing, there have been nearly 4,700 confirmed cases, resulting in more than 100 deaths. Both numbers… Read more
April 28, 2019
At a recent speaking event, former Federal Reserve Chairman Janet Yellen sounded the alarm about corporate debt. In the event of an economic downturn, she warned that the current levels… Read more
January 25, 2021
A huge shortage of shipping containers has caused delays and caused prices to skyrocket for goods from China. Disruptions from the pandemic, coupled with the surge in e-commerce, has led… Read more
January 21, 2021
In a move few would have predicted in the early days of the pandemic, investors flocked to initial public offerings are a record rate in 2020. Companies raised $167.2 billion… Read more
January 20, 2021
Homebuilder confidence reached a record high a few months ago when the pandemic sent city-dwellers flocking to the suburbs. Now, the increasing costs of construction are eroding confidence. Builder confidence… Read more
January 19, 2021
U.S retail sales continued to slow in December, as surging COVID numbers and business restrictions kept consumers from spending. Retail sales fell 0.7% last month, according to the Commerce Department.… Read more
January 13, 2021
Consumer prices were up 0.4% in December from the previous month, and 1.4% higher than they were a year prior. “Core” prices, which leave out volatile categories like food and… Read more
January 12, 2021
With the coronavirus pandemic continuing, more Americans were shopping online in 2020. Online purchases during the 2020 holiday season grew 32.2% over the year before, reaching a record $188.2 billion,… Read more
January 11, 2021
With municipal budgets battered by the coronavirus crisis, city and state governments are borrowing more. Issuances of bonds for new projects climbed to $252 billion last year, according to data… Read more
January 7, 2021
When the coronavirus pandemic hit the country, the majority of Americans turned to their retirement savings to get by. A recent survey from Kiplinger’s found that 60% of Americans withdrew… Read more
“Modern finance is based on scientific reasoning guided by theory, not subjectivity and speculation.”
John “Mac” McQuown
Patience mitigates risk.
When it comes to investment products, complexity often fosters fraud and abuse.
Portfolio diversification enables investors to manage their fear of the unknown.
Rebalancing is like love, you never have to say you are sorry. You are always selling high and buying low.
A good investment policy should never risk what you already have for something you don’t need.


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Coho Capital Up 53% In 2013, With Gains In GM, HIG WarrantsVW Staff
Coho Capital Management letter to shareholders
January 31, 2014
Please find attached your year-end statement for 2013. For the quarter ended December 31, 2013, Coho Capital increased 11.1% and finished the year with a gross return of 53.2%. Net returns for the year, after incentive compensation and fees, were 42.4%. This compares to a gain of 32.4% for the S&P 500 for the year. Individual results may vary contingent upon a Partner’s timing of Fund investment and high water mark.
When viewing Coho’s returns on a risk-adjusted basis we are pleased with our results. We do not utilize leverage and have not employed options in pursuit of our gains. In addition, we carried double-digit cash balances through the first half of the year as a result of not finding investments that met our criteria.
In our mid-year letter, we shared with you economic data indicating a recovery in consumer household finances.
We wrote, “enhanced financial prospects and improved confidence have enabled Americans to pay down debt and do a better job of managing their bills. This is one of the biggest news stories of the year, but coverage has been minimal with media predisposed to a crisis narrative. We think the economic recovery underway is stronger than the headlines suggest. As the storm clouds clear, investors will regret not buying at today’s prices.”
While the gloom and doom view is still pervasive within the media there is much to be optimistic about including the following:
- The Wilshire 5000, roughly equivalent to the total capitalization of all US equities, has risen from $7 trillion in 2009 to $19 trillion. The “wealth effect” on consumer consumption should not be underestimated.
- Debt payments as a share of income are the lowest since record keeping on the measure began in the early 1980s. As of the third quarter of 2013, the percentage of disposable household income dedicated toward debt servicing was 10.4%, down from 14% in 2007. As a result, US consumers are half a trillion richer than if the debt service ratio held constant with 2007 levels. As Wells Fargo CEO, John Stumpf, put it in an interview late last year, “I have never seen credit this good in my 32 years at the company.”
- Banks’ capital levels are the best since the 1930’s. A combination of equity raises, asset sales and recovering earnings have pushed bank equity to 11.1% of total assets, the highest level since 1934 and well above the average of 7.6% over the last eighty years. A healthy banking sector attracts capital, increases confidence in the economy, and spurs loan creation to start new businesses.
- Corporate balance sheets are flush with cash at nearly 30% of current assets, close to a thirteen year high.
- Congress achieved a rare truce in fiscal wars reaching a bi-partisan budget agreement earlier this month without discordant rhetoric.
- The Federal budget deficit has been reduced by more than half since 2009 with federal debt as a percentage of GDP falling from 9.2% in 2009 to 4.1% in 2013.
With a 32% advance in 2013, there is no question that the market has begun to discount some of the favorable developments. After steady expansion in its price/earnings multiple, the S&P 500 sits at 15.2 times this year’s estimated earnings. While not cheap, valuations are far from expensive with the S&P 500’s price/earnings multiple still below its 50 year average of 16 times. In periods of low inflation, below 2.5%, the market has averaged a price/earnings multiple of 19 times. At present, annual inflation is 2%.
Of course we are not buying the market but instead deploying capital in individual companies whose fortunes and risk/return profiles are often independent of what the market does. That is an important point to remember with much of the business media focused on market prognostication. If someone claims to know what the market is going to do, take your wallet and run the other way.
We fully exited our position in AIG during the fourth quarter, registering a gain of 28%. As detailed in last year’s annual letter, our thesis on AIG was premised upon the company achieving a double digit return on equity (ROE) through a rationalization of its complex web of assets and more disciplined underwriting. A key component of that thesis was dislodged in November when AIG suspended its guidance for a 10% plus ROE by 2015. AIG’s 10%+ ROE target has been outlined in SEC documents and been a key guidepost in communications with investors since the company’s re-IPO process in 2011. We can only conclude that AIG is no longer confident of achieving its goals. With less projected ROE improvement, the rationale for owning
AIG became less compelling. We don’t believe sub double-digit ROE insurers are worthy of price-to-book ratios above one, removing one of the key constructs for a higher valuation.
AIG did not offer a reason for its lower ROE guidance, but recent performance trends were cause for alarm with AIG posting disappointing combined ratios in a low loss environment while its competitors were posting ROEs of 10-15%. Perhaps the writing was on the wall when Berkshire poached the CEO of AIG’s property-casualty division earlier in the year.
We have maintained our stakes in the following positions:
Hartford Insurance warrants (HIG-WT) – HIG continues to transition from an insurance company conglomerate into a property casualty focused entity. The company’s efforts to wind down its variable annuity business have gained traction with scores of policy holders electing to accept a one-time payment from HIG in exchange for surrender of their policy. In addition, HIG sold its U.K. variable annuity business earlier this year to Berkshire for $285M. Progress on the annuity front is important as it could potentially allow a quicker return of capital to shareholders. HIG’s remaining annuity book is fully hedged helping to insulate the company from a market downdraft.
On the property and casualty front, HIG has been successful in pushing through large (8%+) price increases for both its commercial and personal lines of business. It is perhaps not surprising then that HIG, unlike AIG, has guided for ROE of 10% in 2014.
Hartford warrants have rallied 69% from our initial purchase in April, but we believe they remain a compelling value and increased our stake this week.
Yahoo (YHOO) – YHOO was our top performing stock last year returning 103%.
It has been a busy year for CEO Marissa Meyer, who in her first full year on the job executed scores of acquisitions, reoriented the company toward mobile and restored company morale. An infusion of talent and a tilt toward younger demographics, through its Tumblr acquisition, has enabled YHOO to regain relevancy. Domestic operations are showing signs of stabilization but it will take time for YHOO to regain the confidence of advertisers.
While we are pleased with the progress Ms. Meyer has made with Yahoo’s US operations, we have always believed the true value of Yahoo resided in its Asian assets, in particular Alibaba.
“People say China hasn’t created a Steve Jobs but I think they have, I think it’s Jack Ma,” Paul Gillis of Beijing University’s Guanghua School of Management. “
Founded by former English teacher Jack Ma, Alibaba is a phenomenon. The company dominates the world’s largest e-commerce market with a 49% share, compared to Amazon’s 20% share of the US online retail market. Approximately 73% of all online retail transactions in China utilize Alibaba’s online payment platform, Alipay.
Alibaba possesses profit margins of 44% compared to 0.5% for Amazon.
It would not surprise us if in a few years’ time, Alibaba is amongst the world’s most highly valued companies. The numbers are simply astonishing. Alibaba’s merchandise volume handled across its two primary sites, Taobao and Tmall, reached $170B in 2012, more than last year’s totals for eBay and Amazon combined.
Alibaba shoppers spent more than twice as much on Singles Day (a Chinese holiday on November 11th similar to Black Friday) as US shoppers spent across all online retailers during Black Friday and Cyber Monday combined. Yes, you read that correctly.
In the third quarter, Alibaba’s revenue jumped 60% to $2.15B with net income of $946M. Put another way, that’s roughly the same revenue as Facebook but more than twice the profit. Facebook trades at a valuation of $131B, such a valuation is far from a stretch for Alibaba. In fact, the hedge fund, Tiger Global, recently invested $200M in Alibaba in a private transaction valuing the company at $125B. YHOO owns 24% of Alibaba, which has made Ms. Meyer’s job much easier.
Howard Hughes Corporation (HHC) – HHC advanced 64% last year. The company did an excellent job of monetizing its master planned communities in Houston and Las Vegas to fund development of significant retail, commercial and residential anchors in New York City and Honolulu.
Despite a 233% rise from our initial purchase price, HHC remains attractively priced at a price to book of 2.2 times, in-line with the industry average for home builders. We think this is far too low for HHC’s trophy collection of assets. We expect book value to grow materially with development of Ward Village in Honolulu and the redevelopment of the South Street Seaport in New York City.
We are not the only ones that think highly of HHC’s development potential. Chairman William Ackman recently increased his economic interest in HHC to 26% of shares outstanding and George Soros and John Paulson joined us as shareholders in the third quarter.
General Motors (GM-WT) – Our investment in GM warrants returned 100% last year. Despite significant appreciation last year, GM still trades at a significant discount to its peer group. Narrowing the valuation gap
would result in a 40%+ gain in shares and a greater than 70% return in GM warrants. With its best in class exposure to emerging markets, fortress balance sheet ($27B in cash) and increased product cadence (GM will replace 89% of its product portfolio between 2013-2016), we think GM should at least trade in-line with its peer group.
The US government finished disposing its stake in GM during the fourth quarter. This should prove to be a catalytic event as the government’s near half-decade of ownership has created near constant selling pressure on GM shares. We also expect the resumption of dividends (current yield of 3.3%), announced earlier this month, to broaden the shareholder base.
GM should also benefit from recent product rewards. After earning the highest score ever achieved by a sedan in Consumer Reports for its Impala, GM’s Chevrolet Silverado was named best truck by the magazine. Motor
Trend named the Cadillac CTS its Car of the Year. At the North American International Auto Show, held earlier this month, GM’s Corvette Stingray won Car of the Year and the Chevrolet Silverado was named Truck of the Year. The 49 member jury is not affiliated with the auto show but instead consists of auto reporters from a variety of online and print publications.
One individual that deserves much of the credit for GM’s product accolades is Mary Barra, who previously served as GM’s head of Global Product Development. A 33 year GM veteran, Ms. Barra was named CEO of
GM earlier this month. By elevating the individual that previously ran product development to lead the company, GM is sending a message that quality product will be prioritized.
While it has been a catalyst rich few months for GM, we believe there is more potential to be unlocked and believe the Barra era will be rewarding for shareholders.
Bank of America (BAC) – BAC shares rose 35% last year with investors applauding the company’s visible cost cutting, curtailment in legacy assets, and reduction in legal tail risks. Most important, BAC is once again a steward of an excellent balance sheet due to CEO Brian Moynihan’s focus on risk management as compared to the go-go growth culture that characterized the prior leadership regime. A return to safe banking practices has left BAC primed for success for a resurgent US economy. BAC’s loan-to-deposit (LTD) ratio is near decade lows due to strong growth in its deposit base and a downsizing of loans and leases outstanding. This leaves the company well positioned for a pick-up in loan demand and enables the company to be more aggressive with its loan book once interest rates widen.
BAC’s efforts to increase cross-selling of financial products to its existing base have been wildly successful. According to bank efficiency consultant, Mike Moebs, BAC generates more fees per dollar of assets than any other large money-center bank. This should be an important driver of earnings growth going forward as consumers once again tap credit after years of deleveraging.
With its asset sensitive balance sheet and exposure to the US consumer, BAC represents one of the best ways to play a recovery of the US economy. A healthy balance sheet should enable BAC to accelerate capital return to shareholders this year providing the next leg up in share price appreciation.
We added a number of new positions during the second half of the year including the following:
Fiat (F.MI) – Fiat is an Italian auto-maker, which in addition to its namesake brand, has full ownership of luxury nameplates Ferrari and Maserati and recently acquired full control of Chrysler. Under a savvy bit of deal making, CEO Sergio Marchionne acquired the 41.5% of Chrysler it did not own for $4.35B, a fraction of the $36 billion that Daimler paid to acquire the company in 1998.
Chrysler has produced several popular models over the past years including its Dodge Ram line of trucks, the Dodge Dart, and most notably a well-received re-design of the Jeep Cherokee. Sales increased 9.3% last year and have increased for 44 consecutive months.
Our investment in Fiat, reminds us of our investment in Yahoo. When we acquired Yahoo, Wall Street and the media were solely focused on the company’s domestic operations and glossed over the company’s 40% ownership of Alibaba. Few analysts factored Alibaba into their valuation scenarios. Similarly, with Fiat, the analyst community has narrowly focused on the company’s competitively challenged Fiat brand in European markets while ignoring the company’s majority stake in a resurgent Chrysler and the latent value to be surfaced in the Ferrari and Maserati brands.
Another significant miss by the analyst community, in our view, was the collective failure to adjust Fiat’s debt profile for its government sponsored pensions. While Fiat has to contend with rigid labor rules in its home markets, the upside is a government that picks up the tab on worker retirement benefits. Failure to make this adjustment to Fiat’s enterprise value would have made its valuation less alluring and it debt servicing capacity more challenging than reality.
Fiat’s acquisition of Chrysler is a game changer. Fiat’s Italian factories have been a significant drag on margins with production at 41% of capacity. Full Integration with Chrysler will allow Fiat to optimize its global manufacturing footprint by directing production to geographies with spare capacity. We expect an attendant rise in operating leverage to have a salutary effect on profit margins. In addition, greater scale will allow Fiat to spread its R&D, and corporate functions across multiple product lines, lower capital expenditures through shared platforms, and most important, provide access to Chrysler’s balance sheet and cash flow. It also paves the way for a listing of Fiat-Chrysler in New York, providing enhanced access to more efficient credit markets and wider visibility.
There is much to like about Fiat. Like GM, the company should benefit from an increased product cadence with a total of 40 launches scheduled to occur over the next three years. The Fiat brand maintains the number one share in Brazil at 23%. In Europe the Fiat brand has steadily lost share, but its Mini-like Fiat 500 has been warmly received. Fiat plans to attack its competitive ills in Europe by expanding its product line-up at Maserati with plans to bolster production to 50,000 cars per year compared to 6,000 cars in 2012.
“The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business” – Warren Buffett
One would be hard pressed to find a global brand more emblematic of pricing power than Ferrari. Even after naming its new car, “LeFerrari,” the company managed to immediately sell out its entire production run at a price of $1.8 million per vehicle. Ferrari’s waiting lists stretch over years and many of its cars actually appreciate in value. We think the value of Ferrari’s lush margins is too valuable for Fiat to consider monetizing the ultra-luxury brand through a spin-off. Nonetheless, we think the value of Fiat’s Ferrari stake provides
important downside support to Fiat’s stock. Analysts have estimated that a spin-off of Ferrari would command a valuation of $7 billion, equivalent to 55% of Fiat’s market cap. We think of Ferrari as a royalty on global wealth creation and expect its market value to compound over time.
Fiat management has guided to consolidated margins of 7+% by 2016. If the company is successful, we expect Fiat to double from current levels. Risks include an uncertain economic backdrop in Brazil, a poor market reception to new models and a potential for over-capacity in global auto manufacturing. In addition, we are not fond of Fiat’s plans to revitalize its Alfa Romeo brand. A consummate poker player, we suspect Mr. Marchionne’s grand plans for Alfa Romeo were a bluff utilized to extract favorable terms from Chrysler during buy-out negotiations. Nonetheless, we will be closely watching the resources dedicated toward this effort.
Amerco (UHAL) – UHAL owns U-Haul, the nation’s dominant Do-it-Yourself moving company. The company invented the intra-city moving model over 60 years ago and owns hubs in urban centers which would cost a multiple of its current market cap to replicate from scratch. UHAL is one of the most ubiquitous companies in America with more locations than Starbucks and its trucks serving as roving billboards in hundreds of cities across the country on a daily basis. The company’s competitive position is unassailable with eight times as many locations as it nearest competitor and a fleet size four times the size of its closest competitor. UHAL’s 17,000 locations provide a network effect virtually guaranteeing UHAL has a location nearby. Additionally, each new store opening increases the asset utilization of all stores by providing more city-to-city drop-off options. This provides scalability of fixed costs leading to increased asset utilization over time.
Rental truck earnings are driven by fleet utilization. With its extensive hub and spoke network of service centers UHAL can better match its fleet to demand, allowing for greater pricing flexibility than competitors.
Further, rental moving trucks are not the core focus at UHAL’s primary competitors, Budget (car rental) or
Penske (commercial truck rental), which makes the economics of building out scale to compete against UHAL a non-starter.
In addition to its truck rental business, UHAL has a hidden asset in its storage business with truck rental sites also serving as storage facilities for DIY movers. The division has been showing impressive revenue growth as of late with sales growth of 20% in the most recent quarter. The self-storage business possesses superior economics to UHAL’s truck rental business with less capital intensity, higher margins and less cyclicality. Similar to the truck rental business, UHAL’s storage facilities benefit from closer proximity to customers than competitor options adding to pricing power and keeping demand steady.
UHAL owns significant real estate in its self-storage facilities. If converted to a REIT it would be the third largest storage business in the US. If you were to spin out UHAL’s storage business and accord it a market multiple inline with other storage REITs, its stock price would be $97.00. UHAL’s remaining business would trade for 9.4x the $13.41 in non-storage earnings. At present, management has not indicated plans for spinning out its storage operations as a REIT but it helps to put a floor on the stock price and is illustrative of the real estate value embedded within UHAL’s assets.
At present, UHAL trades for 12.1x earnings, a 20% discount to the S&P 500 at 15.2x earnings. We think that is far too cheap given UHAL’s competitively entrenched position and increasing pricing power. We think that
UHAL will eventually trade inline with a market multiple as more investors come to appreciate its emerging moat and cyclical tailwinds.
UCP (UCP) – Speaking of cyclical tailwinds, our next investment is poised to be a prime beneficiary of the improving housing market. UCP is a west coast homebuilder that was spun out from Pico Holdings in an IPO last July. Pico capitalized the company in 2008 to take advantage of the fire sale occurring in residential lots during the worst of the housing crisis in 2008-2009. Over-extended homebuilders in need of de-leveraging were desperate to monetize their land-holdings in order to live another day. UCP was happy to oblige and opportunistically deployed over $190M in capital acquiring lots in high-growth West Coast markets.
Altogether, UCP has 6,659 lots with the majority concentrated in Fresno, the Monterey Bay area, the region south of San Francisco and the Puget Sound area of Seattle. UCP has wisely let its lots appreciate in value until the market offered more attractive opportunities for development. With the housing recovery gaining momentum, UCP has commenced home-building operations and ultimately plans to build out 62 communities capable of supporting thousands of homes.
UCP currently trades for a price/book multiple of 1.2x, which compares favorably to the industry average of 2.2x. Similarly sized homebuilders in complementary markets show P/B values of 1.7x to 1.9x. Recent acquisitions also highlight UCP’s value with recent deals suggesting lot values of $100k. In fact, in 2011 UCP’s average lot sale netted out to $100k, highlighting some of the choice coastal markets within its portfolio.
Compare this to the average lot price of $31,000 inferred by UCP’s current enterprise value.
While UCP appears cheap based upon price/book multiples for its peer group and recent transactions within its geographies, the extent of its undervaluation is made much clearer by examining its accounting. GAAP accounting standards require land be carried at historical cost or fair value. Given that UCP spent $191 million dollars acquiring land during the worst housing crisis since the Great Depression, it is fair to say the company’s inventory of lots have experienced some appreciation three years into a housing recovery. Recent facts and figures confirm this with the Case-Schiller index indicating Seattle home prices have risen 53% from trough levels while San Francisco prices have advanced 25%.
We think UCP’s homebuilding operations will catalyze UCP’s market value by reflecting the economic value of its assets rather than the accounting value. As projects come to fruition, economic value will surface and should lead to a gain of over 100%.
UCP reminds us of another one of our portfolio holdings, Howard Hughes Corporation (HHC). Similar to Howard Hughes, when it was spun off from GGP, UCP is a collection of prime undervalued assets that is mispriced due to its orphaned status. Like HHC, we think UCP will rerate materially higher once it proves the development potential of its holdings.
We felt strongly enough about UCP’s investment merits that we presented it earlier this month at the Manual of Ideas’ “Best Ideas” investment conference.
GenCorp (GY) – GY is the leader in propulsion technology. Propulsion technology is utilized by the aerospace and defense industries for space rockets, as well as tactical and ballistic missiles. GY recently completed a transformational acquisition, purchasing the second largest player in the propulsion space, Rocketdyne. The combined company has a 70% market share of missile defense and a 90% share of medium and large rockets for launch vehicles. GY is, in effect, a legal monopoly. The FTC moved to block the acquisition, but the Department of Defense intervened claiming the acquisition was necessary for national defense purposes. A business without competitors is a business we are interested in owning.
Without GY’s propulsion products, most space and missile defense programs would be inoperable. Demand for GY products is highly visible. As a sole-source supplier in most of its product lines, GY is able to establish multi-decade contracted revenue streams. The highly specialized nature of its niche technology, as well as a lengthy certification and qualification process, keeps competitors at bay. This is reflected in GY’s deep customer relationships having served NASA for more than 50 years and Lockheed Martin and Raytheon for 35 and 25 years respectively. Despite customer concentration, pricing power remains high due to the diversity of contracts. For example, GY’s Aerojet division supplied propulsion technology across 270 contracts last year.
Adoption of next-generation propulsion technology in future missile and space programs could add materially to earnings. For example, GY has developed solar electric propulsion technology that is being used for large government satellites. The company notes that not having to haul fuel into space is a game changer potentially worth billions in revenue. In addition, GY has been chosen to develop and demo a new rocket engine for the
U.S. Air Force to replace all existing “third-stage” motors. Both of these opportunities are potentially worth billions in revenue, but at a current enterprise value of $1.6B we are getting the upside for free.
Similar to many of our most lucrative investments, one has to make accounting adjustments to uncover the true value of GY. Uncovering the actual liability of GY’s $475M unfunded pension requires some analytical lifting. With the passage of the MAP-21 Act, no contributions are due to GY’s pension until 2015, at which point the government has agreed to reimburse the company for approximately 84% of its pension obligations. Due to the opacity of GY’s pension dynamics, GAAP earnings are lower than cash earnings. Adjusting for the non-cash nature of pension expenses, and giving credit for anticipated cost synergies with Rocketdyne, results in pro-forma cash earnings of $173M, or an enterprise value of 8.8x cash earnings.
At first blush, GY does not screen well on its asset value either. GenCorp owns over 11,900 acres of prime real estate in Sacramento and 36,000 feet of office space, conservatively worth $500M. Research by Gabelli &
Company estimates that GY’s land holdings are worth $1B. This is not insignificant for a company with an enterprise value of $1.6B. Similar to UCP, GY’s land value is recorded at historical cost, understating GY’s market book value. GY has begun the development process to turn 6,000 of its acres into master planned communities called Easton Place and Glenborough. The land is already entitled allowing for a transaction to occur or for GY to develop the land itself. We expect development of GY’s real estate assets to surface dormant market value and lead to improved price discovery on the stock.
Without adjusting for the value of its land holdings, GY trades for 9x cash earnings. We think this is far too low for a monopoly business with secure long-term contracts and secular tailwinds. After foregoing conference calls and ignoring Wall Street for years (our kind of company!), the new GY plans to reach out to investors beginning with a conference call in March. As the Street begins to appreciate GY’s business drivers and competitive strengths we think shares will respond in kind.
Magnetek (MAG) – MAG is the North American market leader for supplying electric motors and motion control systems to original equipment manufacturers (OEMs) for usage in elevators, cranes and hoists. The company has a large installed customer base with over 70,000 elevators worldwide utilizing MAG components.
MAG’s drive systems have been installed on over 10,000 cranes and boom lifts, providing lucrative service and maintenance revenue streams.
Magnetek is similar to GenCorp in that noise around its financials clouds the company’s true value. In particular, a pension liability of $102M compared to a market cap of $59M. The pension was frozen in 2003 so benefit accruals are not a risk to future pension value. In 2007, MAG’s pension liability was $16M but with interest rates at historical lows, MAG has been forced to revalue its pension liability with a much lower rate. As a result, MAG’s pension assets, which are primarily comprised of high-quality fixed income instruments, are valued with a discount rate of 3.5%, compared to 6.3% in 2007. Lower rates caused MAG’s pension funding gap to balloon. With interest rates near historical lows, the same phenomenon is poised to play out in reverse. Management has stated that for every 100 basis points increase in interest rates its pension liability is reduced by $20M. If one is of the belief that interest rates will head higher from current levels, the future liability posed by MAG’s pension looks far less onerous. Last year’s rise in rates is not reflected in current financials as MAG only changes its discount rate assumptions upon year-end. Financials for 2013 will be released shortly and will reflect higher rates. Current rates would translate into a pension liability of $68M.
As interest rates revert to historic norms, value should accrue to equity holders. Adjusting for non-cash pension expense, MAG would have generated $20M in free cash flow in 2012, equating to a 25% free cash flow yield.
Even if we assume interest rates remain depressed, MAG’s high quality, recurring cash flow business is more than capable of throwing off enough funds to replenish its pension coffers. Between 2007-2012, during one of the most challenging economic environments in modern history, MAG grew its cash balances from $7M to $29M while contributing $50M to its pension fund. In two to three years’ time, MAG’s pension overhang should recede and its true earnings power will emerge.
As an emerging fund, we are always looking for new investors. If you are happy with your experience at Coho Capital please consider sharing your opinion of Coho with others. We encourage you to pass along our letters to those whom you believe would be interested in Coho’s approach toward capital management. We believe our process of investing with conviction in companies that have broad downside support offers a pathway to superior risk-adjusted returns. We thank you for joining us on the journey.
Coho Capital Management


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Acharya OTT Release Date:- It will be released on 27th May 2022 on Amazon Prime Video. The theatrical release of Ram Charan’s Chiranjeevi and Acharya is nearly complete with just 4 days to go until the theatrical release. Now, an interesting update on Acharya’s tentative OTT release date has surfaced on the internet.
According to the latest reports, Acharya will be coming to its OTT streaming partner, Amazon Prime Video 4 weeks after its theatrical release, if not sooner.
Acharya OTT Release Date
In all likelihood, Acharya could arrive on Amazon Prime Video on May 27, which is exactly 4 weeks after its theatrical debut date.
But in the meantime, there is also a discussion that the makers of Acharya are negotiating with Amazon Prime regarding an early OTT release deal with the aim of earning extra money from the deal. If things work out, Acharya could be coming to Amazon Prime sooner than expected.
However, when we caught up with our sources at Amazon Prime Video, it was understood that the prospect of an early OT release is unlikely.
In terms of box office earnings, it is estimated that Acharya could become one of Telugu cinema’s biggest misses. The film is not expected to recoup even half of its theatrical rights valuation.


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The Northern Ireland businessman Terry Cross is planning to create 40 jobs with the development of a distillery in County Down.
He was majority shareholder in Delta Print, which was sold for £80m in 2016.
The Hinch Distillery will produce whiskey and gin from a 30,000 sq ft (2787 sq m) facility near Ballynahinch.
The scheme, which has planning approval and is expected to be completed in mid-2020, will include a visitor centre, restaurant, pub and event spaces.
It is being supported with a £1.9m grant from Invest Northern Ireland, the publicly-funded business development body.
'Highly differentiated product'
Distilling has undergone a major revival across Ireland during the past decade.
In 2010 there were just four distilleries in Ireland but by the start of 2019 the number had risen to 24.
Mr Cross said Irish whiskey had been the fastest growing spirit category in the world over the past 10 years and that trend is forecast to continue, while gin "still has huge potential to grow in markets where it is still a relatively small category".
He said the aim of the Hinch Distillery was "to provide visitors with a highly differentiated product and experience".
Mr Cross has experience in the drinks industry as he owns the Chateau de la Ligne vineyard in Bordeaux in France.


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Masks coming off and markets reopening are creating much cause for celebration this spring.
In the U.S., STR — CoStar Group’s hospitality analytics firm — reported April hotel room demand at the highest level since the start of the pandemic with most of this demand coming from leisure travel. To fully recover, the industry needs both leisure and business travel to return.
Recent consumer research conducted by STR sheds light on both segments.
Yes, leisure travel is back, and all indications are that this summer will be a blockbuster event. More than 4 in 10 travelers plan to travel more post pandemic compared to their pre-pandemic levels. Practically everyone (93%) plans to travel either the same amount or more compared to their pre-pandemic levels. This positivity about leisure travel is particularly notable considering that pre-pandemic, 2019 travel was already breaking records.
Business has yet to return, but the latest guidance from the CDC, lifting mask and other requirements for vaccinated individuals, has more companies thinking about accelerating their return-to-office plans. Once employees are back in the office, a return to business travel should not be far behind. The big question is at what level? Citing the research mentioned above, business travelers were asked about their plans for business travel once the pandemic is completely over. A combined one-half of business travelers plan to travel the same or more compared to their pre-pandemic levels.
When asked about their likelihood to travel more, business travelers mentioned the need by sales teams and customer representatives — who have missed a whole year of in-person interaction — to get out and visit their clients to make up for lost time. Selling via a 30-minute Zoom call is just not the same as a two-hour, in-person dinner. And there may be a need for more intra-company travel due to the more dispersed workforce brought on by the pandemic.
One small silver lining is the relatively high proportion of “not sure.” Those business travelers may resume travel once the pandemic has passed. However, hope is not a strategy, and for now, it does not look like business travel will return to pre-pandemic levels anytime soon.
By Chris Klauda


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March 30, 2010 07:00 AM by Nancy Floyd
It’s not surprising that ifÂ American Idol judgeÂ Ellen DeGeneres were to tell her story, the funny woman would do it via comic book! That’s exactly what she’s doing in a new comic in the Female Force series. Keep reading for more details on Ellen’s personalized comic book and where the proceeds are going…
Fans ofÂ American Idol judgeÂ Ellen DeGeneres will be pleased to know they can find an illustrated version of her life story. The comedienne and daytime talk show host is releasing a comic with Bluewater Productions for their Female Force collection. The comic, which will retail for $3.99, will be available this Wednesday and a portion of the proceeds are going to an organization near and dear to theÂ American Idol judge’s heart: The Humane Society of the United States.
“Ellen has been a leading force for animal protections issues,” Michael Markarian, chief operating officer of the HSUS, said in a statement acknowledgingÂ Ellen DeGeneres for her generous contributions.
The new comic book follows the life story ofÂ American Idol judgeÂ Ellen DeGeneres, from her upbringing in Louisiana to her success as a stand-up comedienne to her television fame. The Humane Society connection is explained in the comic book which highlightsÂ Ellen DeGeneres‘ lifelong love of animals and her childhood desire to be a veterinarian.
The illustrated comic book is 38 pages long and wasÂ written by Sandra C. Ruckdeschel with drawings by Pedro Ponzo. Among the illustrations are sketches fromÂ American Idol judgeÂ Ellen DeGeneres‘ wedding to actress, Portia De Rossi. The Female Force series has previously released editions on Michelle Obama, Oprah Winfrey, and Hillary Clinton.
Photo Courtesy of Bluewater Productions


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Renaissance Hotels Creates Discovery Game to Boost Brand Discovery
Renaissance Hotels creates an interactive film- based game called Discovery Doors. The game plays on the hotel’s discovery theme, saying: “There is something inspiring to be discovered every time you walk through a Renaissance Hotel door.”
Renaissance Hotels, a Marriott brand that says it “encourages guests to live life to discover,” has launched Discovery Doors, an interactive film-based gaming experience that encourages travelers to find surprises behind doors to “[make] discovery easier and more fun.”
The online experience, created by communications agency Anomaly and directed by Jason Zada, enables users to “explore a real life Renaissance hotel online while unlocking unexpected elements of surprise behind every door,” the brand says.
According to Amy Sherman, director of digital marketing for lifestyle brands at Marriott, the game takes players through a “widescreen immersive experience” in which they can collect keys in the lobby of Renaissance New York Hotel 57, a boutique hotel in Manhattan.
Dan Vinh, vice president of global marketing at Renaissance Hotels, says the brand is featuring this particular hotel because “it represents a Renaissance hotel in that it’s very boutique-y and design-forward and has a cool vibe and interesting characters that inhabit the lobby and bar lounge area.”
Guests in the lobby appear with key icons over their heads. Users simply click on the icons to collect keys.
Once they have done so, players can open an elevator door into a hallway to find doors to open. When a user clicks on a door, there’s something “cool, inspiring and fun” behind it, like the filming of a silent movie or an ‘80s breakdance battle, as well as karaoke and mannequins, and a message about whether the user has won a prize.
“It’s sort of random fun rooms and as you’re walking in, it’s sort of like you’re walking into something that’s happening,” Vinh says. “You see a snippet and walk out.”
There are about 12 different rooms, Sherman notes.
“The idea is to keep playing and collecting keys,” she says. “It’s really fun, engaging and super-immersive.”
Players can also collect keys by sharing a unique discovery on Twitter with the hashtag #RDiscovery; inviting friends to sign up for Discovery Doors; checking into a Renaissance Hotel in person and checking into a Renaissance Hotel via Foursquare.
Even though Renaissance is a brand with 155 hotels in 35 countries, Vinh says, “Our awareness is still pretty low, so we’re looking for a way to get our name out there and also get people to understand we are a lifestyle hotel brand within the Marriott portfolio.”
In addition, Renaissance was “looking for a creative, fun way to tap into this whole social space and gamification to do something fun to get our Renaissance brand out there to showcase our hotel and engage people on the whole discovery angle,” Vinh says. “What our brand is positioned to be is ‘stay at Renaissance and help live life to discover…’ We wanted to tell the story beyond guests staying in the hotel and reach a broader universe through digital communications. The game developed as a fun way to invite people into the hotel to get a sense of what we’re about.”
The brand says its target is so-called “discoverers,” or “people who travel for business and they look forward to business travel because they see it as an opportunity to see the world and explore,” Vinh says.
The target audience for Discovery Doors is slightly younger, or “future business travelers,” he adds.
To launch the experience, Renaissance partnered with singer-songwriter CeeLo Green to surprise a family at the Renaissance New York Hotel 57 with a song as they opened their guest room door.


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More than 55 million smartphones shipped globally in the first quarter, with iPhone shipments rising slightly from the previous quarter, from 8.7 million to 8.8 million, according to ABI Research.
Overall, the number of smartphones shipped actually declined by about 1 million, from 56 million in the fourth quarter of 2009, following a natural tendency for first quarters to be lower than fourth quarters, ABI said. But the 55 million shipped in the first quarter was an indication of "dynamic growth," considering that a greater decline would normally be expected, said ABI analyst Michael Morgan.
Globally, smartphone shipments in the first quarter of 2009 were 38.9 million, ABI said.
Part of the strong growth was due to less expensive smartphones entering the market, including Nokia's C and X series models. Nokia, like Apple with the iPhone, saw shipments rise in the first quarter to 21.5 million units, up from 20.8 million in the fourth quarter.
The iPhone's success resulted from strong performance in markets such as Japan and China, Morgan said. ABI didn't release data for other manufacturers.
Return to business news headlines
View Business News Archive


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32 content on TweakTown - Page 1
We found 5 items for the tag: 32
Lexar Professional 3400x CFast 2.0 Card Now Available
Mar 15, 2015 3:46 am
Azubu TV to kick off charity tournament tomorrow
Jan 10, 2015 1:39 am
Azubu TV are kicking off a League of Legends Charity tournament tomorrow
VPRO announce their mechanical gaming keyboard range
Jan 7, 2015 5:06 am
VPRO launch their new mechanical keyboard offerings to the public, reasonably priced at under $150 on release
VPRO unleash their brand-new series of gaming mice
Jan 7, 2015 4:52 am
VPRO is a sub-brand of Rapoo and they have announced their new affordable gaming mice for a launch this spring
Deal of the Day: 32" Dynex 720p, 60Hz, TV for $199 plus Shipping!
Apr 4, 2012 1:27 pm
Today's daily tech deal is 32" Dynex 720p, 60Hz, TV for $199 plus Shipping!


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Another shareholder wanted to know why, if a $2 billion loss [by JPMorgan Chase Bank] is digestible, the bank cannot then reduce lending burdens and help get this economy rolling again.
Thursday, May 17, 2012
Wednesday, May 16, 2012
- "A huge percent of gay men in school grounds molest boys, partly because they don't have AIDS yet."
"Whitney Houston was found without clothes in a bathtub. Every corpse found without clothes has a partner who did away with them."
"P-E-N-I-S goes into the anus to rupture intestines. The more a man does this, the more likely he'll be a fatality or a homicider."
You get the drift. We all had a good laugh. We all might want to rethink that laugh:
[Jane] Svoboda lives at an assisted-living facility in Lincoln and is listed as a protected person, according to court documents. Her brother, Patrick Svoboda of Ogallala, is her conservator because she is incompetent, the documents say.
He was unaware of the video's popularity, but wasn't surprised -- he knew it would be a matter of time before she got in trouble somewhere.
He said he's disappointed the video garnered such attention and jokes without the whole story.
"To me, it shows how little society really cares about people with mental health issues," Patrick Svoboda said. "She does have a very tender heart ... but anything she says is certifiably schizophrenic ... she's not some crazy conservative."
Apparently, she speaks in front of the council regularly at their open mic sessions, which allow anyone of the general public to speak for up to five minutes on any topic. And believe it or not, this might not be the most outlandish speech she's ever given. She's talked about "Chinese subliminals," radio signals sent through our cell phones, brought a large stick figure and said it was the ghost of her mom and regularly hands out fliers on the U Nebraska campus.
I empathize with her brother and his comments, to be sure, and see his point. I have a mentally challenged brother and my mom was, well, possibly less than stable. And I've spent tens of thousands of dollars in therapy to come to grips with my own....shall we say, unique?...mental and emotional challenges. I don't think I'm normal in the way most people would define that term, but then I don't think there is a normal anymore.
But here's the thing: in her speech, she sounds perfect rational and reasonable for a right-wing conservative. She may not honestly believe what she's saying...indeed, it's possible she picked up these thoughts along the way and is merely echoing what she's learned and not what she believes, as a parrot would...but it's such a convincing performance that we all took her as being not unusual for that sector of society.
That says a lot more about that sector than it does about this woman. Still, we probably all should take a look in the mirror tonight.
iMore reports that Google may make four times the ad revenue off of their use in iOS than they do from their own Android platform. Apple wants to change that. Apple has already begun intermediating search queries though Siri, effectively cutting Google out of the valuable identity information associated with those searches. Next up is that other large data components on iOS, maps.
Tuesday, May 15, 2012
According to a new AP-CNBC poll, 57 percent of Facebook users say they never click ads or other sponsored content when they use the site, with another 26 percent saying they hardly ever engage in such activity.
While the company makes money, in part, simply by displaying sponsored content, user clicks are a critical part of an advertiser’s calculus when gauging how effective those ads are and how much they’re willing to pay for them. In the first quarter, Facebook generated 82 percent of its $1.06 billion in revenue from advertising sales. In the company’s online IPO pitch to retail investors, CFO David Ebersman says the company is working to make ads “more relevant, more social, and more engaging” as it looks to grow.
And while Facebook has been able to decrease its reliance on sponsored content (down from 98 percent of sales in 2009), the hopes of expanding the company’s e-commerce footprint also faces public resistance, the poll shows. A majority of participants (54 percent) said they wouldn’t feel safe using the platform for financial transactions like purchasing goods or services. Only 8 percent said they would feel extremely or very safe in doing so.
This does not bode well for the long-term future of the company as a public entity. For my part, I'll occasionally click ads to investigate a product more, but I can't remember the last time I've actually bought something off that first click-through.
And "liking pages" allows me to enter contests and keep informed on a particular entity or activity, but usually I find those items in my newsfeed as opposed to clicking over.
There may, in fact, be too much stuff in my newsfeed for me to keep tabs on everything I want to. I don't really need to read the latest Farmville news from friend A, yet the ability to opt out is more work sometimes than its worth. It ought to be an opt-in policy (e.g. if I sign up for Farmville, I ought to be asked if I want to see my friends' activity there, rather than have to go back to my settings to opt out.)
What you'll end up with is a fad: a huge, lasting fad, but a fad nonetheless, with little opportunity to expand beyond its current capacities or abilities. People will get bored.
I think Facebook has plateaued, although that plateau could last a long time. There are some 900 million users and seven billion people on the planet. There's room for growth there.
Zuckerberg probably waited a year, maybe two, too long to issue an IPO. He'll make a boatload of money but the funds to invest in some kind of expansion into some new territory were needed last year: Facebook could have, for instance, partnered with Google to develop a true competitor to the iPad and promised an huge user base with its audience. It would also have prevented Google+ from getting underway-- which has been underwhelming anyway-- and given Facebook a genuine e-commerce stream.
As it was, they took forever to come out with an app for the iPad which is basically just the Safari browser with the Facebook logo slapped on and a pretty shoddy app at that (again, you have to opt out of things like location services and chat.)
My suspicion is that Facebook is a one-trick pony, and that the IPO is a recognition that they've done about all they can with it, and it's time to cash in their chips.
Monday, May 14, 2012
WASHINGTON (AP) — President Barack Obama is casting Mitt Romney as a greedy, job-killing corporate titan with little concern for the working class in a new, multi-pronged effort that seeks to undermine the central rationale for his Republican rival's candidacy: his business credentials.
At the center of the push — the president's most forceful attempt yet to sully Romney before the November election — is a biting new TV ad airing Monday that recounts through interviews with former workers the restructuring, and ultimate demise, of a Kansas City, Mo., steel mill under the Republican's private equity firm.
"They made as much money off of it as they could. And they closed it down," says Joe Soptic, a steelworker for 30 years. Jack Cobb, who also worked in the industry for three decades, adds: "It was like a vampire. They came in and sucked the life out of us."
The ad, at the unusual length of 2 minutes, will run in five battleground states: Iowa, Ohio, Pennsylvania, Virginia and Colorado. The campaign declined to describe the size of the ad buy though it's in the middle of running a $25 million, month-long ad campaign in nine states. A longer version of the ad was being posted online Monday.
What President Obama can do that numbers don't is put a human face on the suffering that Romney and Bain Capital created. Following a decade of weak job growth since the dotcom bubble burst, Obama can neatly tie vulture capitalists to the job insecurity that plagues the United States working classes.
It's this simple: there once was a mutual loyalty betwixt an employer and an employee: it was for life, or at least as much of life as could possibly exist. Spending 25, 30, 40 or even 50 years working for the same company was not unusual, and neither were retirement parties where the worker's longevity was celebrated with a gold watch and a nice pension.
Factories didn't shut down and jobs didn't move to China. People belonged to unions which protected them from this kind of economic servitude, a job that was constantly under threat. People were fired only for cause and not because they were caught up in a market contraction.
In return, people put in a 40 hour week and if there was more work than could be done in that time, another hand was hired, because it was cheaper than paying double overtime.
Quality products were manufactured. We made things that were inexpensive but not cheap.
You could point to any number of things that contributed to the loss of these opportunities: automation, the expansion of the workforce over the decades, the exploitation of economic inefficiencies, or most likely, the combination of all three.
Worse, if Bain and Romney didn't do it, someone else would have, and in a heartbeat. Thing is, none of them is running for President, and if we want to send a message, if the electorate really wants to show its frustration at people who skim the cream of profits off a company before making it deal with less than 80% of its income in order to manage its future, this is that chance.
No one in America...well, very few of us...want to deny anyone the opportunity to make money, even to make as much money as they can. There are limits, however, something a radical capitalist would turn blue in the face trying to deny.
Taking capitalism to its extremes, we would find the most efficient organizations would make nothing and earn as pure a profit as they can.
We call those "investment banks." And in truth, this is where capitalism and democracy have their toughest battles, for democracy is about equal opportunity and the corporatocracy is about protecting opportunity for those who already have it.
And ain't that the story of America in a nutshell? From the Revolutionary War, where only wealthy land-owners had a say in governance, through the civil rights movement, which finally broke two hundred year old ceilings on opportunities, and to today, where the corporatocracy is reforming in bribery and graft-like political activism, America has paid lip service to equality in favor of restoring an aristocratic rule.
That has to change for this nation to have any chance to survive. If President Obama can make this case, that change is inevitable and that we must be that change we seek (and not just sloganeer it, as seemed to be the case in 2008) then we can start down the road of altering our futures for the better.
I do not envy those who are just leaving the cocoon of family and school and staking their claims to the world. You have a lifetime of hard work ahead of you, and if you've been smart, you've paid attention to the news and to events around you.
The one gift that President Obama may have given this nation that may be beyond measure was the activation of the political instincts of an entire generation of kids who might merely have grown into unintentionally ironic hipsters, poised merely to comment and not commence.


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THE days of pushing a large trolley around supermarket aisles could soon be a thing of the past, according to Waitrose.
The supermarket claims that shoppers no longer plan their meals in advance and instead prefer to visit on a daily basis.
In the past it stores had around 200 big trolleys and 150 shallow "daily shopper" ones.
Now a similar sized store would open with 70 big trolleys and 250 shallow ones, it claimed in its annual Food and Drink report.
“Could this mean the supersize trolley’s days are numbered? If recent trends continue then it looks likely,” it said.
The posh shop also found two in three Britons regularly or occasionally visit a supermarket more than once a day.
This group of customers said this type of shopping stops them overbuying and helps reduce food waste.
Others said it was because they didn't like being tied to the fridge.
The first shopping trolley was introduced in June 1937 at the Humpty Dumpty chain in Oklahoma to encourage customers to buy more groceries.
Waitrose's managing director Rob Collins: “Today’s shoppers exercise unprecedented control over when they shop, what they buy and how they consume it.
“Our research found people have become more flexible in their shopping patterns, more price-savvy and more single-minded than ever before.
"For example a staggering 65 per cent of Britons visit a supermarket more than once a day on a regular or occasional basis.
"Over half of us don’t decide what we’re having for dinner until lunchtime; one in 10 of us will decide just before we eat. The consumer is in charge of their domain.”
Shoppers have demonstrated a growing passion and fascination with hunting out discounts in recent years.
This has been seen in the shift away from shopping at big supermarkets to discount ones like Aldi and Lidl.
Some loyal customers will even pop by their local supermarket to pick up yellow sticker discounts on everyday items in a bid to cut costs.
MORE ON WAITROSE
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This is the final part of a three-part series of articles about the state of blockchain in Europe. The series covers the blockchain scene in some of the most important European nations. I would like to thank PR firm Wachsman for sharing with me the facts & figures and the commentaries present in this series. Part one may be read here and part two, here.
The Netherlands and Switzerland are the remaining two European countries whose blockchain spaces will be reviewed in this third & final part.
It will not be incorrect to say that the Netherlands is on the rise on the global blockchain scene. This European nation recently hosted the Odyssey Hackathon, the biggest blockchain and AI hackathon in the world. The event was supported by the Netherlands Authority for the Financial Markets (AFM), the Ministry of the Interior and Kingdom Relations of the Netherlands, the European Union Regional Development Fund, De Nederlandsche Bank (the Dutch Central Bank), KLM and Deloitte. With 1,500 people in attendance, it saw 100 teams compete for €200,000. The Special Envoy of Startup Delta, Prince Constantijn van Oranje-Nassau, also supported the hackathon.
The Netherlands is home to 135 blockchain startups.
Night view of the Swiss canton of Zug and its lake. Crypto Valley Association, an autonomous, government-backed alliance founded to leverage Switzerland’s strengths to create the world’s foremost blockchain and cryptographic ecosystem, is based in Zug.
The presence of state-of-the-art centers and knowledge hubs like Crypto Valley, which hosts 20% of the worldwide blockchain market; flexible regulatory bodies and the government’s strong encouragement have all enabled Switzerland to thrive as a leading hub for blockchain revolution. Switzerland is also the ICO capital of Europe, where firms raised $456 million in 2018, and $1.46 billion in 2017. Startups in this European nation received nearly 1.24 billion francs (almost $1.25 billion) of venture capital in 2018, about 32% more than the year before.
As for the number of DLT startups operating in Switzerland, there are 712 of them (out of 750 companies in the Crypto Valley) as of Q1 2019. Demonstrating the breadth of firms in the Swiss blockchain cluster is the startup Utopia Music, which is a new entrant into the Crypto Valley top 50 and the only media and entertainment firm to do so.
Switzerland also hosts four Unicorn startups (firms already worth billions). These startups include Dfinity, Cardano, Bitmain and Ethereum.
Crypto Valley Association president Daniel Haudenschild said, “At the heart of the blockchain movement, the Crypto Valley Association has been central to creating Switzerland’s leading position as a pioneer in cryptocurrency and blockchain. The valley is home to some of the most innovative and influential blockchain companies in the world, only made possible by the friendly regulatory environment, secure and predictable legal framework, world-class infrastructure, talent pool, sound policies and economic strength here in Switzerland.”
Armin Schmid, CEO of Swiss Crypto Tokens, part of the Bitcoin Suisse Group, stated, “At Swiss Crypto Tokens, we consider ourselves very fortunate to call Switzerland home. The Government here has always shown great encouragement of the blockchain community and this has undoubtedly been a huge part of our success in positioning Switzerland as the ‘Crypto Nation’. In addition, given how developed and influential the Swiss financial sector is — managing around 27.5% of all global cross-border assets — Switzerland is an ideal environment with a stable economy and currency for liquidity-providing instruments such as the CryptoFranc, our Swiss-Franc pegged stablecoin.”
End of Series
Image credit – Mensi (CC BY-SA 3.0)
by Jimmy Zhong, Co-Founder & CEO of IOST
Ever since the introduction of Bitcoin, the very first Decentralized Application (DApp), we have seen multiple use cases arise in the last ten years, from crypto exchanges, data storage, to gaming and entertainment. While much has been said about the potential for blockchain technology to positively impact almost every aspect of our lives, the prospect of mainstream adoption still seems like a lofty target for the relatively nascent industry to achieve. Though we have seen encouraging signs of adoption in recent years, there is still a long way to go before we start to see the tangible benefits that blockchain technology can bring to our daily lives.
At its current state, significant barriers hinder the rate of adoption for everyday users by limiting their ability to interact with blockchain technology seamlessly. To engage with DApps, users would require a sufficient level of technical knowledge, and an understanding of how cryptocurrencies work, along with how to acquire, store, and use them. Coupled with slow transaction speeds and inefficient systems, it is not surprising that adoption rates have not lived up to the hype, thanks to the inaccessibility and difficulty of using DApps on blockchain platforms.
For blockchain technology to make its mainstream breakthrough, the industry will have to pivot its focus to the usability of DApps, and lower the barriers to entry for everyday users. Users should not have to undergo multiple steps of procuring and securing tokens, or feel overwhelmed by the sheer amount of technical knowledge required to even begin using the DApps. Instead, development of DApps should focus on allowing users to earn and receive tokens through the platform natively. A current example of this is Bermi, a social network that allows users to earn cryptocurrencies by creating and interacting with viral videos. Another example is OnBlock, a platform that allows users to experience DApps on the IOST ecosystem with just a phone number, without the need for private keys, wallets, and accounts. Only when the barriers to entry are lowered and users are familiarized with the concepts of blockchain, will we start to see breakthroughs in adoption.
To encourage developers in creating meaningful and user-friendly DApps for users, a holistic support system of projects, incubators, accelerators, and venture capitalists is also needed to provide sufficient resources and capital. When developers are given adequate support and tools to create valuable DApps that can break down the current barriers for both consumers and enterprises, the blockchain industry will be able to thrive and grow closer towards the eventual goal of achieving mainstream adoption.
IOST co-founder & CEO Jimmy Zhong
Jimmy is the Co-founder and Chief Executive Officer of IOST; the application-friendly, next generation public lockchain infrastructure helping decentralized app developers overcome some of the most challenging problems with mass adoption. An entrepreneur at heart, Jimmy started his first business while still at high school in Beijing. Moving to the United States shortly after, he co-founded several technology startups while at university, including Studypool, a 500 Startups backed-online platform connecting students to tutors.
Looking to drive the next wave of internet services, Jimmy believes in the promise that a more scalable blockchain infrastructure will bring in helping developers accelerate the adoption of decentralized applications. He holds a Bachelors of Science in Mathematics and Computer Science from Emory University, Atlanta.
Guest post and Mr. Zhong’s photo arranged by PR firm Wachsman


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Pending Home Sales Hit New Low
The National Association of Realtors announced Tuesday Pending Home Sales, a forward-looking gauge of the housing market, dropped 6.5% in August to its lowest level since the index was created in 2001. Economists were looking for only a 2.1% decrease, and compared to a year ago, pending home sales are down 21.5%. "This is still absolutely awful, confirming that the existing-homes market is now in freefall," said Ian Shepherdson, chief U.S. economist for High Frequency Economics. The NAR pointed to the credit crunch as the main instigator for the disappointing performance. NAR senior economist Lawrence Yun said, "Fewer contracts were being written because of mortgage availability issues, and a separate internal survey of our members shows more than 10% of sales contracts fell through at the last moment in August, primarily the result of canceled loan commitments." Despite some recent strength in the housing sector, this number shows that it has a long way to recovery.
Sources: WSJ, MarketWatch
Commentary: Blame It On The Credit Markets • Housing to Hold Fed's Attention for Years, Pimco's Gross Says
TRANSPORT AND AEROSPACE
U.S. Sept. Auto Sales Down, But Better Than Expected
Despite overall U.S. auto sales falling 3% in the month of September, to 1.3 million vehicles, the results were better than industry analysts expected, considering concerns over the impact of subprime and monthly sales declines of 0.6%, 12% and 3% since June. GM recorded its second straight month of higher sales, although only up by 0.28% to 334.874 autos sold. GM says it lost production of 30,000 autos due to a two-day United Auto Workers strike late in Sept. Ford's sales declined for an 11th straight month, plunging 21% to 189,000 vehicles, hurt by a 39% drop in car sales and a 9% fall in truck sales. DaimlerChrysler's sales were off by 5.4% to 159,799 vehicles. Toyota's sales were lower for a third consecutive month, -4.4% to 213,043, although Toyota warned it was up against a tough comparison, having registered 25% sales growth last Sept. Honda posted a 9.4% increase in sales to 127,200, while Nissan's sales rose 6.7% to 94,269. On Tuesday, shares of GM gained 2.8% to $37.05, Ford climbed 4.1% to $8.57, DaimlerChrysler lost 0.01% to $103.29, Toyota fell 0.4% to $118.23, Honda rose 0.15% to $33.73 and Nissan gained 1.3% to $20.52.
Sources: Chicago Tribune, MarketWatch, Wall Street Journal
Commentary: GM-UAW Deal Good News For Stockholders ・Toyota's September Sales May Disappoint ・U.S. Auto Sales Decline Slows in August, GM Posts Surprising Gain
Stocks/ETFs to watch: GM, F, DAI, TM, HMC, OTCPK:NSANY
Micron Swings to Q4 Loss, In-Line with Estimates
Micron swung to a fiscal Q4 loss of $158 million, or -$0.21/share, after earning $64M, or $0.08 last year. This was Micron's third-consecutive quarterly loss. Sales rose nearly 5% to $1.44B. Analysts were expecting a net loss of $0.22 on sales of $1.4B. Micron lost $320M, or $0.42/share during fiscal year 2007. The company said results were "heavily influenced by industry supply/demand dynamics that depressed average selling prices for memory products." Sequential megabit sales of DRAM and NAND Flash increased 25% and 60%, respectively, but average selling prices for both fell about 15%. Micron said it took a $19M charge in fiscal Q4 for employee severance and related costs, as it continues to look for opportunities to lower overhead costs. Micron had $2.6B in cash and investments at the end of its fiscal year. Shares of Micron gained 3.9% to $11.79 during regular trading Tuesday, but gave back 3% to $11.44 in extended trading.
Sources: Press release, Bloomberg, MarketWatch
Commentary: Taiwan Semiconductor and Micron: After Hard Hits, Potential Upside ・A Look At Tech Stocks By Relative P/E and PEG ・DRAM Memory Vendors Headed For Trouble
Stocks/ETFs to watch: MU. Competitors: QI, SNDK, OTCPK:TOSBF, SNE, Samsung [see iShares S. Korea (EWY)], STM, OVTI. ETFs: XSD, IGW, SMH
Earnings call transcript: Micron Technology F4Q07
Procter & Gamble Weighing Sale of Pringles, Folgers, Duracell
Consumer goods giant Procter & Gamble is reported to have retained the Blackstone Group to advise it on the possible sale of its Duracell battery, Folgers coffee and Pringles potato chip units. The company could receive $7 billion for Duracell, $3 billion for Folgers and $3.5 billion for Pringles, according to Sanford C. Bernstein analyst Ali Dibadj. A month ago, P&G CFO Clayton Daley Jr. said the company will likely divest units with sales-growth rates toward the low end of a target range of 4-6%. The proceeds of the sales are expected to be used to buy back stock. An industry expert cited by the Financial Times named Matsushita, Phillips and GE as possible bidders for Duracell, noting that Energizer and Rayovac are out of the running for antitrust reasons. "The margins at Duracell have been deteriorating for a while," said Walter Todd of Greenwood Capital LLC. "The battery business has gotten commoditized and the competition with Energizer has heated up." As for Folgers, "Consumers can buy Starbucks and all sorts of flavored coffees at the grocery store," said Mariann Montagne, analyst for Thrivent Asset Management. Nor, she added, can Pringles, one of P&G's only snack products, compete with PepsiCo's Fritos. Peter Sorrentino of Huntington Asset Management suggested that buyout firms might be interested in the units. "These are mature products with good cash flow," he said. "Or they could unload them to smaller competitors who can devote the attention to them."
Sources: Bloomberg, Reuters, Financial Times
Commentary: Procter & Gamble: Price Follows Value • P&G Beats By $0.01, Announces Up To $30B Buyback; EPS Guidance Soft • Three Quality Businesses: Attention Bargain Hunters
Stocks/ETFs to watch: PG. Competitors: JNJ, KMB, ENR. ETFs: DSI, ELR, IOO
Earnings call transcript: Procter & Gamble F4Q07
Dean Foods Guides Down; Cuts Jobs
Dean Foods, the Dallas-based U.S. leader in dairy production and distribution, will cut 600-700 jobs across the country and is lowering its earnings guidance, the company announced Tuesday. "This is by far the most difficult operating environment in the history of the company," said CEO Gregg Engles. Dean, whose products include Land O'Lakes butter, Silk soy milk and Horizon organic milk, adjusted its EPS outlook to $0.15 for Q3 and approximately $1.25 for 2007. Two months ago, the company forecast Q3 EPS of $0.24-0.28 and said it "may be able to hit the low end" of earlier full-year guidance of $1.52-1.58. Dean had tried to pass "all-time high" dairy commodity costs on to consumers by raising prices on its branded milk products, but sales "softened as consumers react[ed]," said CFO Jack Callahan. "We also expect...organic milk oversupply to continue to negatively affect results for the balance of this year and into at least the first half of 2008." According to Dutch agricultural lender Rabobank Groep, milk prices are up because dairy farmers have not managed to keep up with a 3% rise in annual milk consumption. Q3 "has historically been the toughest quarter in terms of severe dairy price spikes," said Wachovia Securities analyst Jonathan Feeney. "We suspect things should get better from here."
Sources: Press release, Wall Street Journal, Reuters, Bloomberg
Commentary: Highest, Lowest Betas In the Russell 1,000 • Got Milk, Got Problems: Dean Foods Guides Down
Stocks/ETFs to watch: DF. Competitors: CAG, KFT. ETFs: FXG
Earnings call transcript: Dean Foods Q2 2007
Kohl's to Open 566 New Stores Over Five Years
Wisconsin-based department store operator Kohl's Corp. said Tuesday it plans to open 566 new stores over the next five years, a 67% increase. The company is opening 80 stores Wednesday and another 15 in November, which will result in the creation of 14,000 new jobs, Kohl's said. The company currently operates 834 stores. "For the past two years, we have exceeded our financial objectives and believe we are well positioned to deliver on our long-term strategic growth plan," said chairman and CEO Larry Montgomery. The company is expecting same-store sales to rise 2-4% each year over the five-year period, with total sales growth at 9-11% on a compounded annual rate. EPS are forecast to rise 15-17% on that basis from 2006's level of $3.31. Kohl's recently started selling a high-end clothing and home goods line by Vera Wang as well as Food Network-branded kitchen items. The retailer's same-store sales dropped 0.6% for August and were flat in July, missing analyst expectations for both months. The company plans to boost its women's and men's clothing offerings and adjust its marketing campaign. Kohl's shares closed up 1.8% at $58.63.
Sources: MarketWatch, Reuters, AP
Commentary: Kohl's Looks Most Attractive Among Discount Retailers • Gabelli Multimedia's Larry Haverty Picks Five 'Elephant in the Room Stocks'
Stocks/ETFs to watch: KSS. Competitors: TGT, WMT, COST. ETFs: PMR
Earnings call transcript: Kohl's Corporation Q2 2007
Pepsi Bottling Group Beats Forecasts and Raises Outlook
Pepsi Bottling Group reported strong earnings and raised its full-year outlook on Tuesday. Net income rose to $260 million ($1.12/share) versus $208 million ($0.89/share) last year. Excluding items, PBG earned $0.99/share, beating analyst estimates of $.90/share. Sales were reported at $3.73 billion, an increase from $3.46 billion a year ago, beating forecasts of $3.70 billion. Total world case volume was up 1%, as flat volume in the US was made up for by a 16% increase in Russia. CEO Eric Foss said, "We delivered record sales and comparable operating income driven by outstanding performance in the U.S. and Canada and in Europe, led by Russia. Our strong top-line growth, gross profit per case improvement and disciplined cost management led to solid profit and cash flow increases." In addition, the company announced it had bumped up its full-year guidance to $2.15 - $2.18/share from $2.02 - $2.07/share. Shares of PBG were up 2.7% to $38.18 in midday trading Tuesday.
Sources: Press Release, Bloomberg, Reuters
Commentary: Pepsi Is Losing Some Fizz • Pepsi Bottling Beats, Raises Guidance
Stocks/ETFs to watch: PBG. Competitors: CCE, COKE. ETFs: RHS
Sallie Mae Gets New Buyout Proposal
Sallie Mae received a revised deal from the group of buyers looking to acquire the lender on Tuesday. The new deal lowers the bid price by $10, to $50/share, but also will come with warrants to make up for the lower buyout price. The warrants would be worth $7 if Sallie Mae meets its own projections. If it exceeds them, the warrants can pay a maximum of $10. "I think Sallie was probably looking for closer to $55, but you do have the sweetener if the business is going well ... you should get about $57," said Richard Hofmann, analyst at CreditSights. "I think they (Sallie Mae) might try to come back and get more cash." Investors have been waiting for the new deal since the group of buyers, that include J.C. Flowers, JP Morgan, and Bank of America, informed SLM they would not go through with the originally agreed upon offer (full story). In a response to the new deal, Sallie Mae said in a statement, "Our contract is with Bank of America and JPMorgan Chase, two of America's largest and strongest banks. We expect these banks to honor that contract, not breach the contract." The new deal will expire in seven days. Shares of Sallie Mae initially jumped on the announcement, but finished Tuesday's session up only 0.38% to $50.09.
Sources: WSJ, Reuters
Commentary: Sallie Mae Gets Boost from Renegotiation Possibilities • How The New Student Lending Bill Affects Sallie Mae
Stocks/ETFs to watch: SLM, BAC, JPM
Morgan Stanley, Credit Suisse Announce Job Cuts
In what is becoming a familiar refrain on Wall Street, Morgan Stanley announced Tuesday that it is cutting about 600 employees from its residential-mortgage businesses and Credit Suisse said it is cutting 170 jobs, additional to the 150 it cut last month. Morgan Stanley's cuts will eliminate a quarter of its home-lending staff. About 500 people will lose their jobs at its three mortgage units in the U.S. and about 90 at its U.K. home-lending unit. Credit Suisse's September cuts were residential-mortgage positions; this month's are in its fixed-income unit, including some commercial mortgage-backed securities positions, and in its investment banking division. "In the current market environment, we have made targeted reductions to adjust our capacity to meet diminished client demand," said Credit Suisse spokeswoman Victoria Harmon. The bottom has fallen out of the mortgage lending business as defaults have risen in the subprime sector. Lehman Brothers fired about 2,500 residential-mortgage employees over the summer, HSBC is shutting down its U.S. mortgage unit at a cost of 750 jobs, and Bear Stearns is bringing the axe down on its subprime-mortgage unit. So far in 2007, 88,000 jobs have been lost in the U.S. financial industry, about 75% more than in 2006. "The economy is slowing, and this is an industry that traditionally cuts pretty quickly when things slow down," said Alan Johnson, a New York compensation consultant at Johnson Associates.
Sources: Wall Street Journal, Reuters I, II, Bloomberg, New York Times, MarketWatch
Commentary: Credit Suisse Still Expects Q3 Profit • Morgan Stanley Misses on Loan Markdowns • UBS to Post Q3 Loss; Cut Jobs • Lehman, National City Cut Staff at Mortgage Units
Stocks/ETFs to watch: MS, CS. Competitors: C, DB, UBS, GS, MER. ETFs: IAI, PWV, XGC
Earnings call transcript: Morgan Stanley F3Q07
Deutsche Bank to Take $3.09 Billion in Charges; Forecasts Rise in Q3 Net
Deutsche Bank announced Wednesday it will take charges of about €2.2 billion ($3.09 billion) in Q3 but still forecasts a rise in net profit for the period of more than €1.4 billion ($2 billion). The bank also affirmed its 2008 forecast of a pretax profit of €8.4 billion. Its shares gained 2.6% in Frankfurt trading following the announcement. The bank will take a charge of up to €700 million on its leveraged loans and loan commitments and another €1.5 billion charge on its structured credit products and residential mortgage-backed securities. The corporate banking and securities unit is thus forecast to report a pretax loss of about €250-350 million in Q3. "Despite a challenging quarter for our investment banking franchise, our 'stable' businesses continue to perform well. We see substantial opportunities in investment banking after this period of correction," said CEO Josef Ackermann. Pretax income for Q3 is projected at about €1.2 billion. Two days ago, UBS announced it will take a write-down of around $3.4 billion (full story). On the same day, Citigroup said it will take a 60% profit hit (full story) due to its exposure to the roiling credit markets.
Sources: Reuters, MarketWatch, Bloomberg, Wall Street Journal
Commentary: Deutsche Bank May Write Down €1.7B in Debt - report • Deutsche Bank To Write Down Leveraged Loans in Q3 • Deutsche Bank Says Asset-Backed Fund Down 30%, But No Exposure to Subprime
Stocks/ETFs to watch: DB. Competitors: C, UBS. ETFs: EWG
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The worlds largest producer of legal marijuana is going up against provincial governments to build a retail weed store in Smiths Falls, Ontario.
Smiths Falls has seen its economy drastically evolve over the years. It went from the little town with an abandoned chocolate factory to Canada’s marijuana production capital, complete with gargantuan grow-op.
Like other Canadian breweries, who have obtained licenses to sell their product out of independently owned stores, Canopy Growth is now vying to open their own retail weed store. The company’s president, Mark Zekulin, says,
“It’s the most logical place in Canada to have a store.”
But they will have to go through the provincial government to achieve their goal. Ontario’s new plan for retail marijuana will not allow non-government run stores to sell any product. Each province and territory has their own strategy, but Ontario is striving for 40 government-run retail stores complete with online ordering.
Smiths Falls Backs Canopy’s Proposal
Canopy Growth is not in this fight alone as it has the full backing of the small Ontario town’s council. So far, the Smiths Falls council has contacted Finance Minister Charles Sousa and Attorney General Yasir Naqvi to arrange meetings to discuss the proposal. They also have sent a letter to Premier Kathleen Wynne.
The mayor of Smiths Falls, Shawn Pankow, is optimistic. He says:
“My understanding is they are certainly willing to listen.”
In response, the attorney general’s office said it intends to keep an open dialogue with all stakeholders, including Canopy.
The cornerstone of the council’s argument is the trickling down of the economic benefits. They believe Canopy Growth has helped reinvigorate the local economy. The town was crushed when Hershey shut down its operations more than a decade ago, but Canopy brought jobs back to the town. A Canopy retail store will drive even more economic activity, they note.
A steady flow of tourists used to tour the local chocolate factory and Zekulin is already thinking of offering a similar tour to marijuana enthusiasts and travelers.
But Zekulin has this to say about tours at the 450,000 square-foot facility,
“Obviously it would be a different experience, but what we are doing here is just as interesting.”