Enjoy your February 22nd hand-crafted Brew!
QUOTE OF THE DAY
“It always bothered me that we confused an enduring mission with a temporal goal” — Microsoft CEO Satya Nadella, who believes co-founder Bill Gates didn’t consider which direction Microsoft would head after PCs. A bold statement.
Market Snapshot
- Last week’s gains carried into this week, as U.S. indices jumped to new record highs (again). Markets were led primarily by defensive sectors, with real estate, consumer staples and utilities each finishing 1% higher
- Europe experienced large gains as well after data indicated that business activity reached a six-year high despite disappointing earnings from HSBC, the biggest bank in Europe
A Royal Deal
…Burger King’s owner buys Popeyes for $1.8 billion. Restaurant Brands (+6.85%), which owns Burger King and Tim Hortons, is paying a 27% premium for the popular Louisiana fried chicken chain. Just how popular? Popeyes (+19.07%—yep) has been on quite the hot streak, now boasting more than 2,600 stores and eight straight years of stock growth. Impressive. The deal, which is expected to close in April, signals that the whopper-maker is looking to expand its global reach, as Popeyes is now operating in over 25 countries. Restaurant Brands is also hoping to diversify by adding chicken to its existing burger and donut portfolio. Hungry yet?
Bristol-Myers Episode VI
…Return of the activist investor. Good ‘ole Carl Icahn, renowned investor and notorious corporate raider, is back at it again. This time, he’s taken a large stake (unclear how much yet) in pharma giant Bristol-Myers (+0.35%), sending shares up as high as 5% intraday. But this isn’t Bristol-Myers’ first rodeo with Icahn—over the last decade, Icahn has been both a friend and a foe, helping companies both get bought out and avoid getting bought out by Bristol. Increased competition in the cancer therapy space and delayed approval of drugs have driven shares down 30% since July, but Icahn sees hidden value in Bristol-Myers’ drug pipeline that would make a pretty penny in a takeover attempt. If you’re an M&A junkie, keep an eye out for this one going forward.
Take That, Amazon
…Wal-Mart’s (+3.00%) coming for you. The big box retailer released earnings yesterday, posting its strongest growth in over four years and thoroughly impressing investors. Though revenues came in a bit short, Walmart’s ongoing investment into its e-commerce business seems to be paying off, allowing it to take a direct stab at Amazon, everyone’s e-commerce archnemesis.
Unconditional Love
…Between Verizon (+0.49%) and Yahoo (+0.89%). Despite the fallout from Yahoo’s massive data breaches, the deal between the two companies has officially been sealed after months of negotiation. Verizon is paying $4.48 billion for Yahoo’s core business, which includes its search and email tools. The price is a bitter $350 million lower than Verizon’s original offer, but hey, data breaches don’t come cheap, and Yahoo’s lucky to still have a deal at all.
Word on the the Street
…Is that Facebook is in talks with the MLB to stream one game per week. Social media sites such as Twitter (-1.20%) and Facebook (+0.14%) have been upping their game and looking to sports streaming to attract new eyes in the new video-dominated landscape. It’s a solid effort to pick up new users, as sporting events are one of the few remaining types of content people still watch live. The partnership would also give Facebook access to a younger audience on a massive scale. But don’t get too excited just yet—while it’s been rumored that the two have been in talks, there’s been no definitive announcement as of yet.
Other Stories
- Toronto Stock Exchange on the prowl for Aramco
- Macy’s makes bank on real estate assets
- Fannie Mae and Freddie Mac crash after judge denies appeal
- UPS wants to save money by launching drones from trucks
Economic Calendar
- Monday: U.S. Markets Closed (Presidents Day)
- Tuesday: Home Depot (+), HSBC (-), Macy’s (+/-), Walmart (+) Earnings; PMI Manufacturing Index (-)
- Wednesday: Tesla Fitbit, HP, L Brands Earnings; Existing Home Sales
- Thursday: Barclays, GAP, Kohl’s, Nordstrom Earnings; Weekly Jobless Claims
- Friday: Foot Locker, J.C. Penney, RBS Earnings; New Home Sales; Consumer Sentiment
Not So Fast, NASCAR
Born in 1947 in Daytona Beach, Florida, NASCAR has been a staple of Southern sports for decades. Unfortunately, the golden days of racing appear to be behind us. Family feuds have strained ownership, and the last decade has seen lower TV ratings and fewer fans in the stands. The first big race of the NASCAR season is this Sunday, and things have been better:
- First off, NASCAR lost its longtime top sponsor, Sprint. Despite the deal being sealed for two years already, NASCAR’s new top sponsor was announced only recently. Monster, the energy drink company, paid $20 million for the gig—well below the asking price of $35 million—and miles away from the original goal of $100 million.
- According to an analysis of Nielsen ratings, NASCAR’s TV viewership has dropped 45% since 2005. Numbers aren’t much better in person, with many tracks tearing out seats to seem fuller (while still exposing spans of empty bleachers on race days).
- On the bright side, declining numbers aren’t the sport’s fault. Most NASCAR fans are part of an aging fan base that was hit harder by the recession than the more affluent fans of other sports. That means less disposable income to turn out for races, buy merch and tailgate.
Interview Question of the Day
The day before yesterday, Chris was seven years old. Next year, she’ll turn 10. How is this possible? (Answer)
Business Person of the Day
Jay Z invested in Uber in 2011 at a valuation of $300 million, and today it’s worth 200 times more. After success like that, it’s no surprise that the media mogul now plans to create his own venture capital firm. Jay Z is looking for a full-time venture partner to help lead his fund because, after all, he still needs to allocate time to being one of the world’s top rappers. Got 99 problems, but VC ain’t one.
Food for Thought
You’ve got mail! Just kidding. But Urban Outfitters is serious about selling an America Online-branded shirt for a whopping $45. Sure, AOL has a special place in our hearts. But a shirt that costs more than the priciest service AOL has to offer ($25.90 a month)? Guess it depends on how nostalgic you’re feelin’.
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