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THE HEADLINES
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RE-ESTABLISHING TRUST…NOT
Wells, Wells, Wells, look what we have here. Wells Fargo is apologizing again, this time for altering information on business customers’ documents.
This once again raises questions about their business practices, risk management, and controls within the organization. Employees in the wholesale unit added or altered information, such as social security number or date of birth, without customers knowledge.
The good news is that Wells reported the problem to a regulatory agency themselves. The bad news is this all appeared to be a common practice within the department instead of an isolated incident. It’s only been eleven days since the launch of their rebranding commercial. Looks like earning back peoples trust just took one step forward and two steps back.
Water Cooler Talking Point: “Ahhh it seems like just last week that I was writing about how Wells was paying a $480M settlement but that better times were on the horizon. O wait, it was.”
SHOPPING AROUND
BJ’s is taking its talents to the public. The retailer filed for an IPO this week that would value the company between $2 and $3B. Private equity owners stand to raise themselves a cool $400M with the offering.
An IPO is a rarity in the retail world. Many chains are struggling to compete with the likes of Amazon and other online retailers. While the CEO notes a strong membership business helps sagging sales, not everyone has the same view.
BJ’s has been through the isles when it comes to ownership strategies. The company was publicly traded until it was acquired by CVC Capital Partners and Leonard Green and Partners and taken private back in September of 2011. Not a great sign.
Water Cooler Talking Point: “The idea of going public seems enticing, but I really don’t see how you can compete with a web-based retailer that sells the same 40-gallon jugs of ketchup with free two-day shipping.”
FORGET ABOUT THAT TRADE WAR
In what can be seen as a sign of Goodwill, the Chinese Government has approved Bain Capital’s deal to purchase a majority stake in Toshiba’s memory-chip business (think SD card). Bain is spending roughly $18B to purchase a 49.9% share in the company.
Despite being the #2 chipmaker in the world, Toshiba made a bad bet on its Westinghouse nuclear unit last year and started hemorrhaging cash. Thus, a purchase opportunity was born. That’s capitalism at its finest!
The deal, expected to go live June 1, could soften things between the U.S and China. After banning sales to ZTE Corp., the U.S has been working to let companies do business with the massive semiconductor supplier…while not looking like chumps.
Water Cooler Talking Point: “China may have a slew of technological products that we need in our every day lives, but we got Soybeans. Check. Mate.”
IN OTHER NEWS
- Suzanne Scott was named the first female CEO of FoxNews. The longtime programming chief could be the first of many women to come to leadership positions.
- Kroger is partnering with British grocer, Ocado, in hopes to improve its delivery business. Ocado specializes in technology and equipment for grocery delivery.
- The FDA approved its first nonopioid drug treatment to ease withdrawal symptoms. Hopefully, it works.
- YouTube launched a new music streaming service for $9.99/month. Living the American Stream.
- US indices were down yesterday:
- DOW: -0.22%
- S&P 500: -0.09%
- NASDAQ: -0.21%