Nordstrom Is Considering Taking The Company Private, Plus The Verizon-Yahoo Deal Is At The Finish Line

by 6 months ago

morning brew

Here’s your hand-crafted Brew for June 9th

QUOTE OF THE DAY

“You better read this or I’ll kick your ass” –– Uber CEO, Travis Kalanick, in an email to employees before a Miami celebration in 2013.

Market Snapshot

Nordstrom’s Comin’ Off The Rack?

Erik, break out the pros and cons list.”

Nordstrom (+10.25%) shares surged 18% this morning when the family-run luxury retail chain said it’s weighing the benefits of taking the public retailer…private.

Even a $350 million purchase of Trunk Club and its discount brand Nordstrom Rack wasn’t enough to weather the brick-and-mortar retail storm, which battered shares 16% since the beginning of the year.

Private Practice

We’re sure Brewer’s know about IPOs (and most definitely IPAs), but what’s the deal when a company decides to go private?

First thing’s first, our high-end retail friends at Nordstrom will need a buyer (possibly you?!—but unlikely). Erik, Peter, Blake and the Nordstrom fam don’t seem like they’re ready to give up the reigns quite yet.

So they’ll look to buyout any publicly traded shares and delist the stock from public markets.

Hmm, so that’s 160 million outstanding shares at about $44 a share…carry the two, and wow, that’s a boatload of money.

So how are they going to take this thing private? Option one: private institutional investors looking to get some skin in the retail game. Option two: leverage—and A LOT of it.

So why go private?

We can’t say for sure—Nordstrom hasn’t invited us to sit on its board of advisors (yet).

But, this Nordstrom dynasty goes all the way back to 1901, when great grandpa John opened up a small shoe store in Seattle.

And while going private means taking on a closet-full of IOUs, it’s an opportunity to possibly snag shares on a bargain, block out the noise of Wall Street expectations and preserve the family name by steering this 100+ year old poseidon back on course.

And if it doesn’t work? Well, sometimes the captain’s gotta go down with the ship.

Packag Deal

Packagd, the vowel-deficient app-based shopping network ain’t your grandma’s QVC, but it did just secure a $7.5 million investment. Packagd’s first app, Unboxed, features live and recorded product unboxings, reviews and Q&As.

But that’s not all! You can instantly purchase the lineup of mostly tech gear (… for now) through Packagd’s partnership with Best Buy.

Of course, unboxings and reviews are nothing new, racking up over 10 billion views per month. But before you file this one under “ideas I should have had,” consider what founder Eric Feng, former CTO of Hulu, is up against: Amazon (+0.02%), which already scrapped a similar idea itself.

Choice Words

If the Comey hearing was the main event, the House vote on Wall Street deregulations was the undercard.

The Financial Choice Act would upend many of the Dodd-Frank regulations passed in 2010. For instance, banks would now only require a stress test every other year, while bailouts would become a thing of the past.

In its current form, the bill is likely to go the way of Lehman Brothers as it faces an uphill battle in the Senate.

Can You Hear Me Now?

By now you’ve heard of Verizon (-0.67%) acquiring Yahoo (+10.21%) and its subsidiary, AOL, right? Well, two massive data breaches later and shareholders are finally okaying the $4.5 billion deal.

Good for some, bad for others.

Yahoo and AOL (or should we say, Altaba and Oath) will axe approximately 2,000 of their 14,000 combined employees as Verizon looks to streamline its operations. Office morale has never been so low.

Tim Armstrong’s still smiling, though. AOL’s CEO “cnt w8t” to tap into Verizon’s 1 billion+ customers.

As for Marissa Mayer, she’s cashing out $186 million in stock options and saying “cya l8ter.”

What Else Is Happening…

  • Nissan (+0.19%) making auto emergency braking standard in 1 million U.S. vehicles for 2018 models.
  • Amazon will no longer offer its unlimited cloud storage plan.
  • Hudson’s Bay (-1.13%) (owner of Saks Fifth Avenue) plans to cut 2,000 jobs in restructuring efforts.
  • Uber is in talks to “acquihire” Luxe, a valet parking startup.

Economic Calendar


Water Cooler

Gimme 4…Credit Cards

1. The record for greatest number of active credit cards by one person: 1,497. That person is Walter Cavanagh, and ol’ Walt’s credit lines are worth over $1.7 million. Atta boy.

2. Who else would teach us about interest other than a guy named Hammurabi. The king of the first dynasty of Babylon set the max interest rate a lender could charge borrowers at 20%.

3. Credit cards are all the same shape and size. According to ISO 7810 standards (yes, it’s a thing), standard dimensions are 3.370 x 2.125 inches.

4. In 1950, Diner’s Club became the first company to offer credit cards, and within a year, 20,000 people were using it.


The Breakroom

It’s Quiz Time

Let’s see how well you remember some of the stories and questions from this past week! Get all the questions right and you’ll be entered into a raffle. If you win, some Brew swag just might be coming your way (Spoiler: it will be).

Interview Question of the Day

A semi-truck driver is driving down the highway, and without realizing, he drives through an overpass that is too short for the truck. Without reversing and going a different way, how can the driver make it through the tunnel?

(Answer)

Name That Food Chain

  1. When I first opened in 1954 you could buy a shake for 18 cents.
  2. Due to copyright laws, I go by “Hungry Jack’s” in Australia.
  3. At one point, I even had Snoop Dogg train my employees.
  4. I’m in over 13,000 locations worldwide and 79 countries.

(Any guesses?)

Stat of the Day

44%

That’s how much Google-driven site traffic to the Wall Street Journal declined after WSJ put a stop to a free loophole and put up a paywall on its articles.


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