Today - Wednesday, March 12, 2014
- Tesla Motors (TSLA +2.7%) hires the director of communications away from the Renault-Nissan alliance in a move that adds a seasoned automobile industry exec to its C-suite.
- Simon Sproule will become Tesla's VP communications and marketing in April.
- The role will be on the high-profile side with Tesla facing battles on several fronts as it aims to become a major automaker.
2:35 PM| Comment!
- The buzz over Dish Network (DISH -0.2%) offering an online TV service after striking a deal for Disney content could be overdone, according to Variety.
- The deal limits potential subscribers to only use one device at a time for Disney content.
- That makes the Dish Network-Disney deal more of a baby step away from the pay-TV model than originally thought with it geared more toward signing up "cord-nevers" than tempting pay-TV subscribers to cut the cord.
- Apparel stocks are getting roughed up a bit after Express is the latest retailer to come in with a profit warning for Q1.
- The winter storms and holiday promotions that plagued December and January sales totals set the tone for the sector early in the quarter, but concerns are deepening that the promotional atmosphere will be tough to shake off as traffic trends stay weak into March.
- Notable decliners: Lululemon (LULU) -3.7%, Aeropostale (ARO) -2.3%, American Eagle Outfitters (AEO) -2.9%, Gap (GPS) -1.9%.
- President Obama paid a surprise visit to a Gap (GPS -1.8%) store in New York City yesterday and spent a reported $150 on his wife and kids.
- The retailer was rewarded after striking out on its own to raise the minimum wage for 65K of its employees to $10.10 per hour.
- Most retailers are fighting for a more modest minimum wage hike from the current $7.25/hour level than what Gap instituted.
- The National Retail Federation calls on Congress to pass legislation that would require online and remote sellers to collect local and state taxes.
- Top NRF exec David French told a House committee that out-of-state sellers sometimes have a 10% price and market advantage over brick-and-mortar local merchants.
- The Senate already passed legislation that would give each state the right to require sales tax collection, but legal battles have gone both ways. In Illinois, the State Supreme Court invalidated an online tax law.
- Related stocks: AMZN, OSTK, NILE, SALE, ECOM, EBAY.
12:15 PM| Comment!
- General Motors (GM -1%) will offer the 1.6M owners of the cars recalled due to an ignition switch issue a $500 cash allowance if they want to trade into a new vehicle.
- The cash allowance offer expires on April 30.
- All indications are that the automaker will be dealing with the backlash over its delayed disclosure of the issue for quite a while.
- IATA revises its outlook for airline industry profit to $18.7B, lower than a previous forecast calling for $19.7B in profits.
- The agency cites higher oil prices and a lack of international alignment of passenger rights as factors in the downward revision.
- Cargo demand is forecast to improve 4% in 2014.
- By region, North America is expect to see carriers generate the sweetest margins. The anticipated profit of $8.6B by North American airliners is more than double what counterparts in Europe will earn this year, says IATA.
- Related stocks: AAL, UAL, DAL, RYAAY, CPCAY, SINGY, CEA, ZNH, CPA, GOL, LFL, DLAKF, AIDIF, QUBSF, JBLU, RJET, SAVE, ALK, HA, AIRYY, MLYAF, AFLYY.
- Netflix (NFLX +0.3%) will have first-run rights to the science fiction series The 100 in Canada through the terms of a new distribution deal with Warner Bros. (TWX).
- The streaming service will be able to offer subscribers the show only one day after it airs on the CW network (CBS) in the U.S.
- The development follows a trend of Netflix trying to gain an edge over cable rivals outside the U.S. by airing popular U.S. shows within a tight window.
- SolarCity (SCTY +4.6%) will pitch its solar installation/electricity services to Best Buy (BBY -1.4%) customers at 60 stores in California, New York, Arizona, Oregon, and Hawaii.
- SolarCity, which already has a similar deal with Home Depot, will have onsite reps evaluate the feasibility of an installation with the help of satellite imagery, as well as discuss pricing and handle sign-ups.
- For Best Buy, the SolarCity deal is the latest in a string of store-within-a-store partnerships. Other partners include Apple, Microsoft, and Samsung.
10:17 AM| 3 Comments
- The $40-per-share offer for Safeway (SWY +0.2%) from Cerberus is the lowest valuation on a major food industry merger in the last ten years, according to Bloomberg. The deal price indicates low interest amongst major players for the struggling brand.
- The "go-shop" period of 21 days is expected to be quiet with Kroger (KR +0.5%) seemingly unwillingly to come in over the top with a bid for the whole company.
- Analyst take: Cantor Fitzgerald says the complicated Cerberus deal includes some risk for Safeway shareholders that the sale of property development centers won't generate the estimated returns. If that's the case, shareholders will earn less than the $40 bid price.
- The Chinese government is considering giving tax breaks to real estate firms which put movie theaters in shopping centers, according to The Hollywood Reporter.
- There are close to 40 Chinese exhibitors that could benefit from the initiative - including AMC Entertainment (AMC) owner Wanda. Lower development costs could also benefit IMAX (IMAX) which is in growth mode in China.
- What to watch: A booming Chinese movie industry will please Hollywood movie studios (TWX, FOXA, SNE, CMCSA, LGF, VIAB) which have been increasingly gearing their strategy around China's box office.
- General Motors (GM) plans to sell entry-level Opel models in Europe as the automaker responds to where it sees the strongest demand in the region.
- Top Opel marketing exec Tina Mueller says the brand needs a presence in the sub-€10K ($19.4K) segment.
- The development is a shift in strategy for Opel which as recently as last year was aiming for higher-end brands.
9:05 AM| Comment!
- Berkshire Hathaway (BRK.A, BRK.B) and Graham Holdings (GHC) reach agreement in principle for Berkshire to acquire a subsidiary of Graham which includes a Miami TV station, a number of Berkshire shares, and cash in exchange for about 1.6M shares of Graham Class B stock currently owned by Berkshire.
- The deal sounds like it's the result of a phone call between Buffett and Donald Graham, with the final numbers still to be worked out and nothing yet on paper.
- "I am sure this is a mutually beneficial transaction for both companies,” says Buffett. “While this transaction will greatly reduce our position in Graham Holdings, our admiration for the company and its management is undiminished.”
- Press release