Category: Business and Finance

Yesterday, Daimler Chief Executive Dieter Zetsche and Uber Chief Executive Travis Kalanick met on stage at Axel Springer NOAH. It was a two-day conference in Berlin that included venture capitalists and technology companies.

As Uber’s Kalanick said, “Cars are not going away soon and companies like Uber are not going to be making them.”

Zetsche said, “We are competitors, of course. There might be many areas where we are competitors in the future,” but then he added that they are also friends.

Uber’s private market valuation has recently soared for a number of reasons. They just announced a $3.5 billion investment by a Saudi Arabian sovereign wealth fund and they have partnered with automaker Toyota Motor Corp.

When asked if the two would like to create a partnership with Daimler considering a stake in Uber, they explained that this is not in the plans.

Uber just entered its 467^th city in Accra, Ghana. When asked about profitability and going public, Kalanick said, “We are going to IPO as late as possible.”

It’s no surprise that Silicon Valley wouldn’t necessarily be on Donald Trump’s side. And that was proven, yet again, this week when Trump, in a Reuters interview, said that start-ups in technology that haven’t yet been profitable are part of a bubble in the tech industry. As Trump said, “I’m talking about companies that have never made any money, that have a bad concept and that are valued at billions of dollars, so here we go again.”

Certainly, tech watchers have been warning about this for quite a while – so Trump’s “news” wasn’t really news to them. Many took to Twitter to make fun of the presidential hopeful. As Marc Andreessen, a general partner at the prominent venture capital firm Andreessen Horowitz, mockingly said, “FINALLY someone calls it out.”

As Trump said in the interview, “You have a stock market that is very strange. You look at some of these tech stocks that are so, so weak as a concept and a company, and they’re selling for so much money. And I would have said can that ever happen again? I think that could happen again.”

Vivek Wadhwa, an entrepreneur and Stanford University fellow, told Reuters, “So far he has been saying dumb things but they seem to be getting dumber and dumber.

Halliburton C. and Baker Hughes Inc. have thrown in the towel for their $28 billion merger deal after opposition from US and European antitrust regulators. The agreement would have brought together the number 2 a nd 3 oil services companies, but it worried many that it would have resulted in higher prices in the sector. As Dave Lesar, chief executive of Halliburton said, “Challenges in obtaining remaining regulatory approvals and general industry conditions that severely damaged deal economics led to the conclusion that termination is the best course of action.”

Halliburton will now have to pay Baker Hughes a $3.5 billion breakup fee by Wednesday as a result of the end of the deal.

As U.S. Attorney General Loretta Lynch said in a statement on Sunday, “The companies’ decision to abandon this transaction – which would have left many oilfield service markets in the hands of a duopoly – is a victory for the U.S. economy and for all Americans.”

Read more about the situation and the feelings on both sides with the full article here.

 

Solar energy giant SunEdison Inc. was growing by leaps and bounds until recently. Now, many of their projects are in danger and they are looking at bankruptcy. One of the solar plants now in jeopardy is one in central Texas. SunEdison was initially planning to self-finance the project, but will now need to make alternative funding arrangements.

While SunEdison won’t discuss its unfinished deals, company releases and news reports suggest that the company has many projects in development which range from massive power plants to smaller rooftop projects.

SunEdison was, until recently, the nation’s fastest growing renewable energy developer. They are now, however, $12 billion in debt. Their shares have fallen 98% in the last 12 months.

Learn more about the situation and what the future may bring for SunEdison.

 

With Obama’s upcoming visit to Havana, a number of companies are trying to complete deals with Cuba. This includes AT&T Inc, Starwood Hotels & Resorts Worldwide Inc., and Marriott International Inc.

This will be the first visit to Cuba by a US president in almost 90 years. AT&T is working to complete a mobile communications agreement with Cuba’s telecoms Etecas. Starwood says that it “has applied for authorization from the U.S. Treasury Department to operate hotels in Cuba. We see many opportunities for the expansion of our brands into Cuba at this inflection point, and look forward to building long-term relationships and welcoming travelers into our hotels in this dynamic market.”

The Marriott spokesman Thomas Marder said, “We are optimistic that we are going to get a green light soon from the U.S. government to have hotels under the Marriott flag in Cuba.”

Certainly, other companies are dabbling in the idea of doing business with Cuba, but many are still wary of the half-century old embargo and the Cuban government’s failure to enact economic reforms of any significance.

Obama has called for the lifting of the embargo but this can only be done through Congress, and the Republicans have said they will not be doing so.

 

 

 

In January, new US single family home sales took a tumble from their 10 month high. This was particularly due to a dip in the West, although overall housing market recovery remains strong. The Commerce Department has reported that single-family home sales dropped 9.2% last month. In the West, where there has been a sharp rise in home prices, sales went down 32.1% to the lowest level since July of 2014. This was the largest decline they’ve seen since May of 2010.

In the Northeast, the sales rose 3.4% and sales were up 1.8% in the South. However, sales decreased 5.9% in the Midwest. While the plunge was dramatic, economists did not seem too worried about it.

As Daniel Silver, an economist at JPMorgan in New York said, “Through some of the noise in the data, it appears that home sales are continuing to trend higher over time off of historically low levels. We maintain our view that the housing market will continue to recover.”

Xerox Corp. is soon splitting into two companies, one for the printer operations and the other for business process outsourcing. They have, for years, tried to integrate the businesses and have finally decided to divide into this model. Carl Icahn will have three board seats on the outsourcing company as he tweeted on Friday that “the separation will greatly enhance value for Xerox Corp shareholders.”

As Xerox Chief Executive Officer Ursula Burns said, “The reason why it was easy to get to a decision is because we do have two businesses that rotate around two different axes.”

Xerox’s shares have fallen more than 30% in the last 12 months and it has been trying to turn itself around by focusing on software and services. Burns explained that the leadership and the names of the new companies have not yet been decided.

Avon Products rebuffed a $10.7 billion offer by Coty over three years ago and since then their business has been on the rocks. This week, Cerberus Capital Management agreed to take their North American business. The North American business has been at the heart of Avon’s problems, weighing down the rest of the company.

Sheri McCoy, the chief executive of Avon Products, explained that the Avon portfolio outside of North America represents 86% of their revenue in the last nine months.

As Ms. McCoy explained, “We believe that the separation of North America is the best way to ensure that both businesses have an unencumbered path to profitability and growth. This was a key principle as we considered alternatives.”

Learn more about Avon’s plans and what Cerberus has planned with their take-over.

Mobile device shopping accounted for more than a quarter of the $3 billion in sales over Cyber Monday. Cyber Monday was the biggest ever day for online sales in the US according to the Adobe Digital Index report. This was attributed to larger than expected discounts and to a demand for electronics and toys in particular.

There were 200 million visitors who visited 4,500 retail websites on Cyber Monday. Last year, mobile devices accounted for 19% of the total sales on Cyber Monday, and this year that number hit 26%.

What were the top selling items? Lego’s Star Wars collection, the Barbie Dream House, the Samsung 4K television set and Apple Inc.’s iPad Mini.

Interestingly, even though more people were shopping from their mobiles, they were spending less. On average, the smartphone shopper spent $102.02 on each order, which was below the $128 average spent by desktop users. Scot Wingo, executive chairman of ChannelAdvisor shared his frustration when he said, “The fact that we haven’t improved the mobile conversion rate is a little depressing to be honest.”

Which stores faired the best? Amazon.com Inc. had a 21.1% rise in Cyber Monday sales according to ChannelAdvisor. Discounts through Amazon averaged 40%.