Venezuela Gives Everyone Fridays Off, Plus What Will Happen If Silicon Valley Stops Being A Boys Club
This week’s Brew quiz is live! We cut you some slack this week and shortened the quiz to four questions, so it’s easier than ever to get a perfect score and earn your chance for an exclusive Brew shout-out and some sick Brew swag.
“GE has been in business for 124 years, and we’ve never been a big hit with socialists. We create wealth and jobs, instead of just calling for them in speeches” — General Electric CEO Jeff Immelt, with the mic-drop rebuttal to Bernie Sanders’ statement that GE’s “destroying the moral fabric” of America.
- U.S. stocks finished in the red, sending the S&P into negative territory for the year, fueled by oil declining and the dollar dropping
- Mall stocks (think JCPenney, Sears and Aeropostale) all fell significantly as data showed spending shifting towards tech and dining—and away from apparel. In addition, foot traffic data revealed a drop in the number of shoppers flooding America’s malls
- If you bought Valeant Pharmaceuticals on Monday, you’re likely a psychic or on the short end of a bet. Either way, you’ve been in luck, as the stock rose for a third straight day, taking its gains to 36%
Venezuela Turns Fridays Off
Ah, Fridays. We’ve all dreamed of a world where we don’t have to work Fridays. But what about a world where you were required to take Fridays off, and still got paid for them? It’s a dream come true in Venezuela, where yesterday the government designated every Friday in April and May a non-working holiday. Why? To save electricity, of course. Over the past year, Venezuela has experienced a seemingly perpetual drought, which, aside from crops and homes, is leaving hydroelectric power plants high and dry. It’s a better excuse than most to take off work. Now, about that rain…
All I Do Is…Expand
…That’s right, we didn’t give you the easy pun you were looking for. Puns or no puns, casino operator Wynn Resorts entertained investors all the same after announcing some impressive expansion plans. What goodies are in store? A new resort in Macau’s trendy market, as well as an upscale “Paradise Park” in Las Vegas. Executives predict the park will “reinvent” entertainment in Vegas by adding a beach attraction with water sport activities in the middle of the city. Yes, you read that right—we’d say “only in Vegas,” but honestly, we don’t know anymore. Where’s the funding for this extravaganza coming from, anyway? Well, Wynn is playing with house money right now, and the odds are favorable—shares rose nearly 12% after yesterday’s announcement.
Not long ago, Pacific Sunwear was a mecca for tweens everywhere. As the comfortable middle ground between Hollister and Urban Outfitters, PacSun had it made in the shade. Flash forward: the California apparel retailer filed Chapter 11 bankruptcy yesterday (see business term of the day for more) after failing to pay off its $160 million debt burden to creditors. Where did it go wrong? Skyrocketing rental fees and decreased mall traffic have eaten away at its financials. Take heart—it’s not over yet, as private equity fund Golden Gate Capital (yes, named after the bridge) has taken control and plans to turn the company around through an all-out restructuring program.
The Suitors Line Up
After a 20% decline in its stock over the past 12 months, it seems that Yahoo is finally ready to hand over the keys. But to whom? There are a few big names in the running. Now in the lead is Verizon, which announced a first-round bid for at least $8 billion. The communications giant also hired three banks (not one, not two) to help with this acquisition, showing that it means business. Shortly behind Verizon are Google, Time Inc. and several private equity funds (think Bain Capital and TPG). The first-round bids are due on April 11, when the competition officially begins.
- Best Buy declares war on Amazon with new delivery service
- Victoria’s Secret to cut 200 jobs
- The “Wizarding World of Harry Potter” opens at Universal Studios
- Gap’s shares plummet after sales continue to slide
- Monday: Factory Orders (-)
- Tuesday: Walgreens (+/-), Darden Restaurants (+) Earnings; International Trade; ISM Non-Manufacturing Index (+); Job Openings and Labor Turnover Survey (+)
- Wednesday: Bed Bath & Beyond (+), Monsanto (-), Constellation Brands (+) Earnings; Fed FOMC Minutes
- Thursday: Rite Aid (+), Ruby Tuesday (-) Earnings; Weekly Jobless Claims (+)
- Friday: Wholesale Trade Data
SILICON BOYS CLUB
Silicon Valley has always been synonymous with innovation and creativity. Diversity? Not so much. A new McKinsey & Company report claims that if Silicon Valley closes the gender gap, the tech sector’s GDP stands to gain a whopping $25 billion by 2025, or a 9% increase (that’s a lot in GDP terms). Let’s explore why closing the gender gap isn’t only the right thing to do, but also quite business-savvy:
- Compared to other metropolitan areas, Silicon Valley has a gender parity score (the higher the better) of .57, compared to .61 in New York and .69 in San Francisco.
- Slightly ahead of the game, Google and Netflix have already implemented more gender equality policies. For example, Google increased its paid leave for mothers from 12 to 18 weeks, helping their retention rates jump by an impressive 50%. Whatever they’re doing, they’re doing it right (or were just doing it very wrong before).
- Big picture time: if the state of California achieved full gender parity, its GDP would increase by $648 billion by 2025. Full gender parity in the U.S. would boost GDP by $4.3 trillion. That figure should have heads turning.
INTERVIEW QUESTION OF THE DAY
When you have three, you have three. When you have two, you have two. But when you have one, you have none. What is it? (Answer)
BUSINESS TERM OF THE DAY
Debtor-In-Possession Financing — Debtor-in-possession financing (DIP financing) is financing arranged by a company while under the Chapter 11 bankruptcy process. DIP financing is unique from other financing methods in that it usually has priority over existing debt, equity and other claims. Chapter 11 gives the debtor a fresh start (exactly what PacSun needs), which is subject to the debtor’s fulfillment of obligations under its reorganization plan.
FOOD FOR THOUGHT
Another day, another Tesla milestone: yesterday, Tesla reached 325,000 preorders for the Model 3. That’s $14 billion in implied sales, assuming all preorders are ultimately fulfilled.