UnitedHealth Warns of Obamacare Divorce
The Affordable Care Act (aka Obamacare) is back in the headlines, and it’s not good news: UnitedHealth, America’s largest national health insurer, warned yesterday that it may drop Obamacare from its available plans as soon as next year. It’s a matter of simple economics: while enrollment has remained low, those that do sign up incur significant costs (often because they sign up only when they need healthcare and drop it once they’re healthy). If UnitedHealth exits—and there’s a good chance they do, given the $425 million they’re expected to lose in the fourth quarter due to Obamacare—it would deal a major blow to President Obama and his legacy-defining healthcare overhaul. Certainly not what the President wants as he prepares to leave office.
Best Buy Keeps the Trend Going
They say this time of the year ‘tis the season to be jolly, but we doubt Best Buy is feeling the love. The tech retailer announced subpar earnings yesterday, continuing a rough year for the company—shares are down about 20% just this year. Despite increasing sales in its computer and appliance divisions, a lackluster performance in mobile devices overshadowed the bright spots. At least misery loves company: the retail sector as a whole has struggled immensely this quarter—just ask Nordstrom and Macy’s.
Starboard Switches Strategies
Remember being told two different things from each parent? Yahoo can relate. In a letter to Yahoo management, activist investor Starboard is suggesting the company maintain its large investment in Alibaba, contradicting its previous message to sell off the investment. Starboard is now encouraging Yahoo to sell its smaller, more well-known search and display advertising business. Yahoo investors haven’t been pleased with core business performance under CEO Marissa Mayer, and a sell-off would shift Yahoo’s operations to its more optimistic Alibaba investment.
TODAY IN TECH
Wall Street Swipes Right
Tech took over Wall Street yesterday, as both Match Group and Square took their talents to the public market. Square, a mobile payment company founded by Twitter CEO Jack Dorsey, and Match, the online dating conglomerate that owns Tinder, both entered their big day with disappointingly low IPO valuations. But despite major doubts from investors, shares of both companies surged, with Square jumping 45% and Match 23%. After a series of disappointing tech IPOs in the past year, yesterday’s success signals that tech isn’t quite dead yet.
- Monday: Dillard’s Earnings
- Tuesday: Consumer Price Index; Walmart, Home Depot, Dick’s Sporting Goods Earnings
- Wednesday: Fed Minutes; Housing Starts; Lowe’s, Target, Staples Earnings
- Thursday: Best Buy, Gap Earnings; Weekly Jobless Claims
- Friday: Abercrombie & Fitch, Foot Locker Earnings