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THE HEADLINES

 

RIDE OR DIE

Somewhere, backstroking in a swimming pool filled with gold coins Travis Kalanick, the founder and former CEO of Uber has a smile on his face. Why? Because Uber’s earnings were a bigger disappointment than you are to your parents.

Uber’s results revealed top and bottom-line misses. And not misses of the “slight” variety. We’re talking a loss per share of $4.72 vs. $3.12 expected and a top-line miss of roughly $200M ($3.17B vs. $3.36B).

As you might expect shares cratered after earnings dropped. The stock fell more than 12% before recovering to settle at -4%.

For what it’s worth …

Spoiler: this is where news outlets try to make excuses for Uber.

CEO Dara K. (because have you ever tried to spell his last name?) was quick to point out that a majority of Uber’s $5.24B loss is attributable to stock-based comp. Still, the $1.3B loss excluding the pay is 30% greater than last quarter.

The company has spent boatloads of cash on competing with its younger, slightly more business savvy cousin, Lyft. Both struggle to retain riders and drivers.

And Uber’s side hustles like Uber Eats certainly didn’t do the company any favors. Eats generated $3.39B in gross booking vs. $3.51B expected.

The good news?

Well, Uber’s self-driving cars didn’t kill anyone. So there’s that. But Dara is positive that in 2020 or 2021 “you’ll see the losses come down.” Heck, he’s even talking “break even.” Dream big, Dara.

 

BUYING IN BULK

Broadcom closed a nice little deal on Thursday, announcing that it would be shelling out $10.7B in cash for Symantec’s enterprise business. Symantec’s consumer business, the one that builds those annoying security popups on your laptop, was not part of the deal.

Try, try again

After trying and failing to buy Qualcomm last year, Broadcom has been looking to make inroads in the US infrastructure technology market. The Qualcomm deal was blocked by President Trump, over concerns of national security. Shortly after, Broadcom moved its headquarters to San Jose, and went out and snagged mainframe software company CA for almost $19B.

Despite cutting revenue guidance due to Huawei’s addition to DJT’s blacklist, investors will be pleased with Broadcom’s recent purchase. The company plans to return the proceeds of the deal back to investors as a $12 per share special dividend. The firm also said that it expects the deal to bring in more than $2B in annual revenue moving forward.

On the news, Symantec saw a 12% spike in stock price, while Broadcom was trading at a 1% premium in after-hours trading.

 

TURNING IN HOMEWORK LATE

Five days after Berkshire reported earnings, Kraft Heinz followed suit, once again writing down the value of its brands. Kraft reduced the value of its assets by $1.22B for the first half of the fiscal year. This included $744M related to international divisions and US food units and $474M in the declining value of its sh*tty stock price.

New-ish CEO Miguel Patricio stated that the company will continue to delay its earnings release going forward, stop offering forecasts for future earnings *cough* losses *cough*, and consider more write-downs in the future. Net sales fell 5% from a year ago to $12.37B for the first half of the year.

None of this, unsurprisingly, pleased investors, and the ketchup maker’s stock dropped as much as 14% on the day, having fallen a total of 38% on the year.

But why?

In a day and age when other big food makers have tried to rebrand as healthier, Kraft has fallen short. The company has failed to update its products to reflect healthier ingredients or acquire brands that focus on more natural ingredients. For God’s sake, McDonald’s serves apples. Get with the teimz, Heinz.

No ragrets

Berkshire Hathaway has now lost more than $5B this year on its investment in Kraft Heinz. The best part? There are still 5 months of losses ahead.

You may remember that in June, the Oracle admitted to paying too much for the mac and cheese maker.

 

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IN OTHER NEWS

• Amazon announced a new policy regarding third-party pricing after critics complained that the current policy is anti-competitive as it prevents sellers from offering lower prices at other retailers. Amazon wants to make sure that its customers are getting the best price. Under the new program, if sellers enroll products in the “Sold by Amazon” program, sellers give Amazon full authority to control the prices. In exchange for the autonomy, Jeffrey Commerce and Co. will guarantee a minimum payout, no matter what the sales price is on the site. Non-compliance will result in death by beheading.

 

• Facebook’s ad manager platform keeps crashing, and you won’t like digital marketers when they’re mad. The app that allows Mad men and women to create new campaigns and manage existing ones fails to load and becomes unusable multiple times per month. Fortunately for FB, there is really nowhere else to go.
  + Meanwhile, Zuck & Co. are offering millions of dollars to news companies to license content and headlines on its platform. Suitors include ABC News, WSJ, and Dow Jones. Don’t they know TWC is the place to get the best content?

 

• Interactive TV is the next frontier, and Netflix is betting that little cousins who always ask “does that thing have games?” are the biggest market. The streaming giant is making three of its biggest kids shows into interactive specials. Somebody finally found out how to reach these keeds. The plot thickens though as YouTube and Walmart are joining to create a Goosebumps-esque “choose your own adventure” program that would compete with Netflix.

 

• There are requirements to being listed on the various stock exchanges throughout the world, like, you know, having a respectable stock price … which is exactly why JC Penney is in danger of being delisted from the New York Stock Exchange. The company has traded below $1 for 30 consecutive days as it has lost 70% of its value, and could be delisted within six months if it does not come back into compliance. The go-to back-to-school destination of 90’s kids will consider a reverse stock split and will have to notify the exchange of its plan within 10 days.

 

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