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IT’S THE MOST WONDERFUL TIME OF THE YEAR
As bonus szn winds down on Wall Street, the FT’s “How To Spend It” site might not be garnering the web traffic it has come to expect this time of year …
You see, not all is well in the land of rainmakers and deal closers. Wall Street bonuses fell 17% vs. last year according to the Office of the New York State Comptroller. An average securities professional’s bonus in NYC dropped from $184,400 in 2017 to $153,700 in the year of our Lord 2018.
This is all despite Wall Street’s record profits of $27.3B. You hate to see it.
Well, there were more mouths to feed this year. The industry’s headcount grew by 3% year over year. Of course, that doesn’t account for the entire haircut …
Donny Politics’ federal tax code changes didn’t do 2018 any favors. Some of the overhauls encouraged banks to pay out bonuses in December 2017 vs. January 2018 in hopes of saving a few Shekels.
It’s not that bad
Before you start a GoFundMe for broke boi bankers, consider this: the securities industry accounts for 5% of jobs in the Big Apple, but generates more than 20% of all wages.
And if that doesn’t get the Occupy crowd’s britches in a bind, this oughta: according to NY’s comptroller, “Bonuses declined in 2018, but the average bonus was still double the average annual salary in the rest of the City’s workforce.”
Lyft’s first day on the NYSE is set for Friday, and it’s looking like the ride-sharing and scooter rental company will be pricing its shares higher than initially expected. Lyft, which is wrapping up its roadshow, was targeting the $62 to $68 per share range for its IPO pricing. Now, thanks to investor interest, experts are expecting shares to list as high as the low $70’s.
This higher share price could lead to a valuation north of $23B. While that’s good news for Lyft, the haters are still skeptical. After all the ride-sharing company managed to lose $911M in 2018, the most of any startup in the year preceding its IPO.
But rest assured that Lyft is working to quell those concerns. It plans to cut costs, starting with insurance expenses. What could possibly go wrong?
Meanwhile, in Dubai …
While Lyft prepares to go public, its chief rival Uber is making waves in the Middle East. In a $3.1B cash-and-share deal, Uber will purchase Careem Networks FZ as early as next week. As part of the agreement, Uber will pony up $1.4B in cash, and $1.7B in convertible notes.
The deal, however, is contingent on Careem investors, such as Saudi Prince Alwaleed bin Talal, giving the acquisition their blessing by Monday. And we all know how rational Saudi Princes are. Don’t forget, Uber is expecting to hit the stock market as early as April.
Don’t you love the smell of a corporate bloodbath in the morning? Activist investors are looking to oust the CEO and all 12 board members of Bed Bath & Beyond as performance under the current regime has been anything but beyond.
Three investment firms, Legion Partners, Macellum Advisors, and Ancora Advisors, are banding together to wield a collective 5% ownership to launch a proxy fight at the big box retailer. The three corporate raiders promise they don’t have plans to sell the entire company … yet.
Bed Bath & Beyond CEO Steven Temares has been running the show since 2003 and his seemingly ho-hum attitude has led to flatlining revenue and declining profits. Net income dropped from $625M in 2017 to $428M in 2018 across its nearly 1k stores.
Investors claim that Michael Keaton’s second employer in ‘The Other Guys’ has become complacent and failed to keep up with a changing retail market. Specifically, carrying a large number of similar products, failing to develop new strategies, and awarding excessive executive compensation that isn’t based on performance. Plus, you know, Amazon.
The market seems to believe the corporate coup-de-tat will be a good thing. BBB shares jumped more than 20% in trading on Tuesday following the news.
IN OTHER NEWS
- The sequel is always worse than the original. Remember Moviepass? Turns out the company that allowed you to see unlimited movies in-theatre for less than the cost of one ticket is still kicking … well kinda. Its parent, Helios and Matheson announced that it raised $6M by issuing more stock … news that sent shares down 50% to less than a penny. The quarterly report dated September 30th showed a net loss of $138M.
- Payday. Citigroup is getting into the consumer payments game as it looks to cash in on one of banking and fintech’s hottest spaces. The new revenue stream will offer big merchants various options from traditional credit card services to digital wallets and even direct bank-account transfers. Citi’s goal here is to milk every ounce of business out of its current customer. And with more activity moving online the security that comes with a “big bank” gives Citi a distinct advantage despite being late to the game.
- It’s settled. Purdue Pharma has agreed to pay $270M to the state of Oklahoma, settling a lawsuit in which the state claims the company illegally marketed Oxycontin. Johnson & Johnson and Teva Pharmaceuticals were also charged in the case, but plan to go to trial. The trial is set to take place in the coming months and could set a precedent for thousands of other communities lining up to sue Big Pharma for its role in the opioid crisis.
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