Facebook’s Quest For Revenue Takes New Turn, Plus There’s High Demand For A Credit Card With $450 Annual Fee

“I would love to be president of the United States” — JPMorgan Chase CEO Jamie Dimon. Hold your horses though, he immediately followed that statement with “but it’s too hard and too late.” We’ll have to wait at least four more years for a potential President Dimon.
Market Snapshot

  • Try not to get whiplash: after collapsing on Friday, U.S. stocks roared back to kick off the week yesterday
  • Shares of Tesla jumped as much as 3.5% midday after the company announced it would be upgrading its autopilot feature to improve safety conditions

Facebook’s Quest for Revenue

…Spend all your money without ever having to leave Facebook Messenger. Yes, you heard correctly. Starting today, users can shop online, book travel plans and make other purchases without having to use each individual store’s external website. This move by the social media giant is an attempt to keep its over 1.7 billion members within Facebook’s hivemind for all their online shopping needs. You can see where this is going: it seems Facebook is slowly trying to compile all daily life activities into a single app. Welcome to the future.

Hectic Day for Samsung

…What else is new? Amidst the stress of recalling the Galaxy Note 7 last week due to possible battery malfunctions (more specifically, bursting into flames), yesterday the tech company named the son of its ailing chairman to the Board of Directors. The move comes on the same day that HP agreed to purchase Samsung’s printer division for slightly over $1 billion. The recalls have spooked Samsung investors, and the printer division sale to HP didn’t mitigate much of the damage—shares logged their worst one-day decline ever on Monday before rallying a bit last night. Stay tuned as Samsung untangles itself from this mess.

Gas Merger Goes Awry

…”Agree to disagree.” That was the logic of industrial gas companies Praxair and German rival Linde, which called it quits on their potential $60 billion merger yesterday. The merger would’ve resulted in a massive market leader for industrial gases (e.g. oxygen, helium and the like), but the firms couldn’t agree on basics like where it would be headquartered and who would be in charge of the combined company. Kind of important stuff. Following the disappointing news, Praxair shares were essentially flat, while Linde was down nearly 7%.

Shots Fired

…Starboard aims for Perrigo’s heart. Let’s first introduce the players. We’ve got Perrigo, a Dublin-based generic pharmaceutical firm. We’ve also got Starboard, an activist hedge fund. The connection: Starboard has a 4.6% stake in Perrigo, and Starboard ain’t happy about its investment. In a letter to Perrigo’s CEO, Starboard claims Perrigo failed to meet its promises after rejecting a takeout offer from pharma giant Mylan (yes, the EpiPen company) last April. Perrigo executives spent $100 million to stop the deal, only to take hefty bonuses later on. The result of this mess? Perrigo shares have been cut in half since Mylan’s offer was announced. Cue Starboard’s anger, and its demands that Perrigo find an investment bank to sell off non-essential assets. That should get the board’s attention—it certainly got the attention of investors, as shares rose over 7% yesterday.

Other Stories

Economic Calendar

    • Monday: Manchester United (-) Earnings; T-Bill Auctions
    • Tuesday: Treasury Budget
    • Wednesday: Cracker Barrel Earnings; Import/Export Prices
    • Thursday: Oracle Earnings; Producer Price Index; August Retail Sales; Weekly Jobless Claims
    • Friday: Consumer Price Index; Consumer Sentiment

$450 Later…

A credit card with an annual fee of $450—it had better be worth it. Well, evidently, it is: when JPMorgan Chase released the Chase Sapphire Reserve card, it got so many applications the card’s stock ran out in just 10 days. Turns out for many consumers, the benefits outweigh the costs:

      • Back in the day, a credit card with such a high annual fee would usually be justified by elite service and social status. Now? Even those uber pricey cards emphasize their bottom-line value proposition.
      • Plus, there’s been a shift in the market players: once upon a time, AmEx had control over the high-end market, but Chase and Citi are playing some serious catch-up.
      • Chase has also kept up with the 21st century: both Airbnb and Uber fall under the “travel” category for earning points, and Sapphire Reserve customers have already spent $1.5 million with those two companies to earn a total of 4.5 million points (that’s a lot, especially considering the card was only released in mid-August). Cheers to annual fees!

Interview Question of the Day

You have ten $5 bills, ten $10 bills and ten $20 bills in a box. You are blindfolded and must remove the bills from the box. The contest ends when a person removes three of the same bills (example: three $5 bills). What is the greatest amount of money a person can remove from the box? (Answer)

Business Person of the Day

Robert E. Allen — The former chief executive officer of AT&T passed away yesterday at the age of 81. He was instrumental in helping the telecom company navigate through a tumultuous period for the industry from 1988 to 1997.

Food for Thought

NFL wide receiver Antonio Brown will be fined over $12,000 for his twerking celebration after scoring a touchdown in Monday’s season opener. At least he got his money’s worth.

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