“Needless flash over function” — Consumer Reports’ review of Tesla’s new Model X SUV. Clearly, Consumer Reports isn’t a big fan of the SUV’s wing-like doors. To each their own.
Market Snapshot
- The Trump effect died down yesterday, with U.S. stocks falling off all-time highs. Meanwhile, Italy faces an upcoming vote on whether to leave the EU, which could push as many as eight of its banks to default
- Shares of Time Inc., publisher of Time, People and Fortune, rallied 15.7% after rejecting a takeover offer valuing the company at $1.78 billion
Two Companies are Better Than One
…At least for Samsung shareholders. Amidst the Samsung Galaxy and washing machine recalls, investors haven’t exactly been thrilled with the South Korean firm’s explosive (in a bad way) performance. So yesterday, activist hedge fund Elliott Management took charge, calling for Samsung to split into two companies, buy back more shares, increase its dividends, list shares overseas and appoint more board members. Sounds simple enough. The proposal is currently under review, but Samsung has already increased its annual dividend by 36%. As for the other recommendations, the ball’s in your court, Samsung.
Nice Move
…AT&T (+0.84%) just pulled a fast one on cord-cutters. No bluff—the telecom giant is officially launching DirecTV Now this Wednesday. What’s that? A new streaming service aimed at turning DirecTV’s lagging growth around. You’re probably familiar with the recent trend of cutting cable TV in favor of cheaper streaming services (we see you, Netflix and HBO), aka cord-cutting. AT&T’s solution? Identify the channels that cord-cutters still miss after ditching cable, and build a new streaming package around them—and at multiple price points to boot. The cherry on top: no credit check, no long-term contracts, no box installations. Now we’ll see if it works.
Touchdown!
…The first scheduled commercial flights from the U.S. to Havana in over half a century landed yesterday. Just days after the death of Fidel Castro, American Airlines (-0.68%) and JetBlue (-2.18%) touched down in the Cuban capital yesterday, with other airlines set to follow suit this week. Despite all the hubbub, demand for plane tickets to Cuba has been pretty underwhelming, although Delta (-1.52%) has reported that bookings have been “in line with expectations.” The recent flights continue America’s warming relationship with Cuba, as airlines landed in other Cuban cities earlier this year and Carnival (-0.93%) launched a cruise to the island. Now airlines are just hoping that president-elect Trump won’t “terminate the deal,” as he has indicated he might.
Penalty
…Boeing loses some yardage. For over a decade, U.S.-based aerospace giant Boeing (-0.18%) has been fighting to receive government subsidies to help pay for the production of its commercial planes. And how’s that going? As of yesterday, not great: according to the latest ruling by the World Trade Organization (WTO), the answer is a hard no. More specifically, the WTO told Boeing it can’t use government handouts to help build its new 777X jet. What’s the reasoning? Basically, Boeing was benefiting from a tax cut that forced it to source materials locally, disrupting trade. But if we know Boeing (and we think we do), this fight ain’t over.
Other Stories
- A prominent Silicon Valley investment banker is suing Theranos
- Sling TV is launching a cloud DVR next month
- Insurer Allstate to buy SquareTrade for $1.4 billion
- Ransomware attack hit San Francisco train system
Economic Calendar
- Monday: Government T-Bill Auctions
- Tuesday: Tiffany Earnings; U.S. Q3 GDP (2nd Estimate); Consumer Confidence; Case-Shiller Home Price Index
- Wednesday: Royal Bank of Canada, American Eagle, Box Earnings; Private Employment Report; Pending Home Sales; Beige Book; Personal Income and Outlays
- Thursday: Kroger, Dollar General, Ulta Salon, Smith & Wesson Earnings; Motor Vehicle Sales; Weekly Jobless Claims; PMI Manufacturing Index; ISM Manufacturing Index; Construction Spending
- Friday: Big Lots Earnings; November Jobs Report
Amazon Gets Ready for the Holidays
You’ve heard of Amazon, right? While you were still deep in a restful post-Thanksgiving food coma, Amazon was hurriedly gearing up for the holiday season. To handle the increased demand, Amazon has to hire and train tens of thousands of seasonal workers very quickly. Most conventional warehouse jobs take up to six weeks to train new hires. But not Amazon—just like its Prime service, the company aims to deliver its new hires to the warehouse floor in just two days. Here’s how:
- Amazon added 26 new warehouses this year, with each coming chock-full of robots. Yep, robots. The robots walk new hires through the steps of each process and help automate almost everything.
- The robots also store all necessary numbers so workers don’t have to. For example, before UPS added new technology, some of its warehouse employees had to memorize more than 120 zip codes.
- If the robots are any indication, this is a seriously big deal: Amazon plans to add 120,000 workers at its U.S. warehouses—increasing its workforce by nearly 40%.
- What’s the need for all the new workers? It’s partly because Amazon only retained 14% of its seasonal hires last year. But the company also expects holiday sales this year to increase to over $45 billion, a 27% increase from last year. Get your resume ready.
Interview Question of the Day
How can companies reduce internal and external business risk? (Answer)
Business Person of the Day
After 18 months, Frank Cooper is leaving his position as chief marketing and chief creative officer at Buzzfeed. Cooper was a driving force behind the company’s big (and successful) bet on sponsored content. Oddly enough, his departure follows Comcast recently doubling its investment in Buzzfeed.
Food for Thought
Ever heard of a company buying out another only for its employees? It’s a thing. One of YouTube’s most popular stars, Casey Neistat, has sold his startup (social media app Beme) for around $25 million to news giant CNN. What did CNN do with Beme? Immediately shut it down. CNN wasn’t after Berne—it was after the core team that made Beme revolutionary, with hopes of attracting Neistat’s youthful YouTube audience—an audience that thinks news outlets, like CNN, are broken.
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