Pepsi CEO To Step Down; New York-Uber Showdown; Zillow Buys Mortgage Lender
The Water Coolest is a free daily business news and professional advice email newsletter created for weekday warriors that is delivered fresh daily at 7 AM EST. You can subscribe at thewatercoolest.com.
Don’t have 3 minutes and 58 seconds to read The Water Coolest? Listen on all of your favorite podcast outlets in 2 minutes or less.
Indra Nooyi will step down after 12 years at the helm of PepsiCo. Ramon Laguarta, a Pepsi lifer, will take over the role. Unlike most C-Suite departures in the shadow of the #metoo movement, Nooyi is stepping down on her own terms, claiming simply that she’d like to do something else with her life … plus she really, really misses drinking Coke.
Her tenure hasn’t been without its share of tumult, including a global recession, an activist takeover attempt and changing American tastes. That said, revenue increased 81% during her tenure and total shareholder return was 149% during her reign. Coca-Cola’s TSR was 197% over the same timeframe, but who’s counting?
The departure raises questions about the future of the company, especially, will it spin off its snack division as has been widely speculated.
Nooyi’s departure leaves the S&P 500 with only 24 female CEOs. If that number feels very “circa-Mad-Men,” that’s because it is. The percentage of female leaders in the S&P 500 has been roughly stagnant for the past decade.
Water Cooler Talking Point: “Pepsi can continue to dabble in products they know nothing about like kombucha … orrr they could just convince Coke to sell them the rights to Surge. Because after all, ‘Life’s a scream.'”
CAP THAT A**
In an unprecedented move, the New York City Council is set to approve a one-year cap on new licenses for ride-hailing services. Supporters are hoping the move will reduce city congestion, and establish a better wage for drivers.
Taxi turf wars (which should probably be a show on Discovery HD) have been brewing thanks to the Uber’s of the world taking yellow cabbie’s market share. Some drivers who took out loans to purchase medallions (allowing them to operate the cab) have even reportedly taken their own lives.
Things aren’t much better for “app” drivers either, with their average hourly wage hovering around $17.22 according to a study performed by the city. The bill’s establishment of a pay floor will require the companies to make up any difference between a driver’s actual earning and the minimum.
Water Cooler Talking Point: “From a human side, this makes sense. From a business side, it may set a precedent that forces ride-hailing service’s costs up. Don’t worry, they will pass it right on to us …”
GOOD NEWS AND BAD NEWS
Zillow is getting into the mortgage lending business, but it’s not all well-manicured yards and white picket fences over at the online home sale’s site. The company announced it will be acquiring Mortgage Lenders of America, giving Zillow a foot in the door when it comes to originating mortgages.
The announcement coincided with news that Zillow had once again missed quarterly estimates, sending its shares into a 16% tailspin in extended trading hours.
This isn’t the first time that Zillow stocks have dropped with news of a new venture. In April, after the company announced that they would be buying and selling homes directly to users, shares dipped around 9%.
Water Cooler Talking Point: “This is so millennial it hurts. We’ve gotten so lazy that we can’t even navigate from Zillow to Rocket Mortgage when we actually decide to stop living in our parent’s basements.”
IN OTHER NEWS
- Facebook is going all “I’ll show you mine if you show me yours.” The embroiled social media outlet has asked major financial institutions to share banking data with the firm in hopes that it can integrate the information into new products such as allowing users to check account balances in-app. Now you can show the entire world how much of a peasant you are with the click of a share button.
- GoodRx, a health “tech” startup best known for its Rx discount card, has raised an undisclosed sum that allegedly values it at a healthy $2.8B. PE firm Silver Lake led the round.
- GM is DTE. The automaker plans to offer a new type of “direct to employee” health care option in Michigan for some 24k of its employees. GM employees will have access to, ironically enough, the massive Henry Ford health care system.
- Shares of SeaWorld had their best day in close to five years on news that attendance was up and that the home of Shamu was close to settling an SEC investigation stemming from having misled investors about the impact of the Blackfish documentary. The spike in attendance was due in large part to a free beer promotion. When has that ever gone wrong?
You can subscribe at thewatercoolest.com.