The $19 billion WhatsApp deal could become the Facebook founder's legacy . . . or his albatross.
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San Francisco targets the Happy Meal as a child obesity culprit. Voters say no to CEOs. Struggling MGM Resorts distances itself from struggling MGM Studios.
Here's our roundup of the dumbest actions in business this week.
5. Happy Meal? More like Sad Meal
San Francisco's Board of Supervisors put on its Food Police badges and set out to bring McDonald's (MCD) -- and the dastardly Happy Meal -- to justice.
In a measure sponsored by supervisor Eric Mar, the board on Tuesday voted to ban toy giveaways in meals that it said failed to meet certain nutrition requirements. Under the ban, restaurants cannot sell an "incentive item" with any food item that has excessive calories, sodium or fat. Fast-food meal packages with a toy, such as the beloved Happy Meal, must contain less than 600 calories in total and also include fruits and veggies.
Key points in General Motors' IPO documents show the US government needs to get out of the company -- and knows it.
Jeff Reeves, editor of InvestorPlace.com
It's hard enough for investors to wrap their heads around a typical IPO. Combing through a startup's numbers, purported risks and legal disclaimers is a daunting task.
And if you want to add another layer of confusion to a stock offering, consider the unique and complicated situation of automaker General Motors. GM is ready to go public again for the first time since its 2009 bailout, with the U.S. government set to sell a third of its shares in about two weeks. In preparation for this IPO, the government has filed its formal prospectus -- and made some rather shocking revelations in it.
- Related Article: Data Proves GOP Better for Stocks
Most noteworthy are three clear signs in this SEC filing that the government knows Uncle Sam's influence is bad for General Motors -- as well as any initial investors, too.
High-end goods are selling because the wealthy feel safer now that their portfolios have rebounded. Midlevel retailers like Macy's and Target may be the next to benefit.
"Let me tell you about the very rich. They are different from you and me." I always thought F. Scott Fitzgerald was speaking about how the rich handled themselves in "The Rich Boy," which begins with that observation.
Now I know he was speaking about portfolios and their impact on shopping, notably at Tiffany (TIF), Whole Foods (WFMI), Coach (COH), Nordstrom (JWN) and Williams-Sonoma (WSM) -- places where higher costs get passed on and nobody blinks. These are all stores where inflation is taken in stride because prices -- albeit higher because of the cost of silver or cotton or food -- don't inhibit profits and in fact somehow seem to improve them.
We've been in a barbell economy for certain since the great bull market of 2009 reignited itself when the polls showed Republicans would take the House. All five of the merchants mentioned put up truly amazing numbers, and the common thread among them has to be stabilization of jobs and bonuses for the wealthy.
Middleby is going strong, beating estimates and gaining, but on a historical basis the stock is expensive.
Nothing unusual about these shares in the company, which designs, manufactures, and sells commercial food-service and food- processing equipment.
And that's exactly the point: At this stage of the rally, I'd like to keep close watch on valuations and sell individual stocks when a specific price seems to be getting out of line. I'd rather leave a few dollars on the table now than risk a major loss.
The company is trying its hardest to turn Slurpees into a beverage of national unity.
The company is hoping to get big mileage out of the so-called "Slurpee summit," also known as the proposed meeting between President Obama and leaders from both parties. 7-Eleven wants the Slurpee summit to be as big as the "beer summit" of last July.
"This is a rare opportunity for a brand," a 7-Eleven spokeswoman told USA Today. "We don't want to be opportunistic, but nothing has ever been this big for Slurpee."
Stories about the death of commercial real estate and retail REITs have been just plain wrong.
"If you think the housing bust is bad, wait until you see the blow-up in commercial real estate." Remember those stories? I don't believe the people who wrote them do, or there would at least be some touch of irony to stories with headlines such as "Vornado Results Suggest Commercial Sector on Rebound" in Wednesday's Wall Street Journal.
Of course, the rebound is so old that it really isn't news anymore. We know this was only about the third great quarter from Vornado (VNO). We also saw terrific numbers from competitors Boston Properties (BXP) and SL Green Realty (SLG).
It's not just about office space. We have seen endless positive quarters from Federal Realty Investment Trust (FRT), Simon Property (SPG) and Tanger Factory Outlet (SKT). As bad as the overbuild in office real estate had been, the retail REITs were supposed to be vast wastelands. But when the No. 1 mall developer, the No. 1 shopping center developer and the No. 1 outlet developer are all getting rate raises and are almost all fully leased, that bearish call really smarts.
The numbers are about what Wall Street expected.
$600 billion by June -- that's the number.
Add in the reinvestment of interest, and you get about $110 billion a month.
The Federal Reserve's announcement on quantitative easing came in at around the Wall Street consensus of $100 billion a month in Fed buying. (For more on what Wall Street expected, see this post.)
Trouble boils to the surface from deep within the credit market.
While all eyes have been on the U.S. midterm elections and more money printing by the Federal Reserve, the situation over in Europe has been deteriorating. The troubled nations on the periphery of the eurozone are under heavy attack from the credit and credit derivatives market.
Interest rates charged to these countries have moved to new record highs as bond investors worry about the ability of the likes of Greece, Ireland, and Portugal to repay their debts in the wake of tough budget cuts and tax increases. Adding to the woes is strict new plan that will force investors in eurozone bonds to accept potentially much deeper losses as well as the steady withdrawal of easy money from the European Central Bank.
So far, these concerns aren't being reflected in the euro exchange rate. But once they are, risk assets including stocks, bonds, commodities, and even precious metals could slide lower as the dollar strengthens. And the wildcard is whether a fresh crisis in Europe will once again damage global confidence. Here's why.
Can any single measure track consumer prices, cost of living and inflation?
Exchange Traded Funds and indexes have been hot topics of discussion lately, and today is no different.
Each day business, investment and policy decisions are made using the CPI. Even payments for Treasury Inflation Protected Securities are linked to CPI numbers along with Social Security benefits. But how reliable of a gauge is it?
As one of the most widely quoted economic indicators, there’s still a lot of confusion surrounding the consumer price index or CPI. Therefore, let’s analyze it.
The company's online video streaming accounts for 90% of peak-hour bandwidth in Canada and 20% in the US. How much more can the system handle?
Jeff Reeves, editor of InvestorPlace.com
Netflix has seen rapid growth recently, with shares up a stunning 550% in the past five years versus just 10% for the Dow. Part of that success has hinged on the company's seemingly seamless transition from dominant home delivery of DVD rentals to plentiful streaming content and partnerships to provide online movies through various gadgets -- from wired BluRay players and HDTVs to video game consoles.
But what would have happened to Netflix if, five years ago, the U.S. Postal Service had been overwhelmed by DVD mailings and movies didn't reach your house until weeks after you ordered them -- if they arrived at all? NFLX stock not only would have missed out on its recent growth but might have gone out of business entirely.
These funds give you access to one of the world's fastest-growing economies.
By Don Dion, TheStreet
Investors' desire for equity exposure beyond the shores of the U.S. and other developed markets has led many ETF providers to launch funds aimed at emerging markets. One popular destination for these sponsors has been India.
India has expanded to become one of the dominant emerging economic forces in not only Asia but the world. This week, the nation generated a flurry of positive economic news, including a strong manufacturing report. Noticing the impressive strength of India's economy, the Reserve Bank of India raised rates for the sixth time in 2010.
Companies such as Van Eck, WisdomTree, PowerShares, and BlackRock (BLK) have jumped on board with respective products aimed at tracking this fast-growing nation.
Forget the sweeping macro claptrap that isn't going to happen. The coal industry put its money on the right candidates, and it got what it paid for. Here's a coal stock to play the outcome.
Let others pontificate on whether the president will swing a petulant, defiant left or a conciliatory right. The media and blog pundits can have all the fun they want speculating on the impact of the Tea Party, or lack thereof. We will hear endless commentary on winners and losers.
I couldn't care less.
I know who the biggest winner was last night: coal.
Coal put its money on the right candidates. It made some solid investments in people like Roy Blunt of Missouri, Joe Barton of Texas, Nick Rahall of West Virginia, Ohio's Rob Portman and West Virginia's Joe Manchin. All received sizable donations from the industry. All won big.
At least one fund manager is staying out of the market for the rest of 2010 to avoid political risks.
By Robert Holmes, TheStreet
Eric Singer, the manager of the Congressional Effect Fund (CEFFX), isn't among them.
With the GOP capturing the House, the two-month lame-duck session will be "incredibly dangerous" for investors, the mutual fund manager says.
Washington will probably impact Wall Street less now that Republicans have taken control of the House.
Will the president listen? Will he hear?
Will the election matter to him?
I think the answer is a resounding no.
I don't see anything about President Barack Obama that speaks to making peace and getting along with the other side of the aisle, and I don't see the other side coming together with him either because, beginning tomorrow, we will be in presidential-election mode.
More woes lie ahead for stocks like Whirlpool that sell into the sluggish housing market.
How long are you willing to wait for a turnaround?
But last Wednesday's earnings report for the third quarter was depressing. Including all items, the company reported earnings of $1.02 a share, down from $1.15 in the third quarter of 2009. Excluding these special items, earnings came to $2.22 a share, but that was below the Wall Street estimate.
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Shares of Plug Power took a beating Tuesday after an analyst listed the fair value of the stock at 50 cents.
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