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Tag Archives: Companies & Markets

Uber’s Survival Strategy? “Tens of Thousands” of Self-Driving Volvo-Ubers Starting in 2019

Ready or not, here they come. Tough luck for drivers. Uber is desperate. Its business model may not allow it to ever make money as long as it has to pay human drivers, spend massive resources to recruit them, and deal with the fallout when they cause problems. So it has been furiously working on self-driving technologies. And now it’s taking a small-scale experimental program to the big league – not decades down the road but starting in 2019. Volvo Cars, which is owned by China’s...

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The Corporate Earnings Fiction in Q3

The Biggest Sinners in the Dow. All 30 companies in the Dow Jones Industrial Average have now reported earnings for the third quarter. As required, they reported these earnings under Generally Accepted Accounting Principles (GAAP). These standardized accounting rules are supposed to allow investors to compare the results of different companies. But that’s too harsh a fate for many of our corporate heroes, and so they proffer their own and much more pleasing accounting strategies – as...

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Wall Street Discovers the Brick-and-Mortar Meltdown

Oh Lordy. Finally time to make some easy money by betting on the collapse of brick-and-mortar retail, years after it began? Here’s a grisly thought: Now there’s an ETF for that. In its launch announcement today, ProShares explained: Over 30 major retailers have declared bankruptcy over the past three years, nearly two-thirds of those in 2017, including Toys “R” Us, RadioShack, and Payless. The pressure is expected to continue with some analysts predicting that online sales growth will...

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P2P Loans are “Predatory,” Have Delinquency Characteristics of pre-2007 Subprime Mortgages, Could Impact Financial Stability: Cleveland Fed

They get debt slaves deeper into high-cost debts they can’t handle. Peer-to-peer lending commenced in the US a decade ago when investors – now mostly hedge funds, banks, insurers, etc. – could lend directly to consumers via online platforms. LendingClub, the dominant player, went public in December 2014. Shares shot up to nearly $30 over the first few days, but are currently at $4.20, after a 23% plunge last Wednesday when it slashed guidance, and after a 2.4% dive this morning. Now...

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Equifax Discloses its Coming Nightmares

“It is not possible to estimate the amount of loss or range of possible loss.” Equifax reported that revenue ticked up 4% year-over-year in the third quarter to a less-than expected $835 million and that net income plunged 27% to $96 million due to the initial costs related to the most damaging consumer data hack in US history. But it also disclosed in the fine print of its SEC filing just what a legal and financial nightmare it is getting into over what it calls the “cybersecurity...

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How Snap Just Gave a Middle Finger to its Voteless Shareholders

They don’t need to know, Snap says. Tencent rues the day it bought a 12% stake. Tuesday evening, Snap Inc., parent of Snapchat, reported a very ugly quarter, and its shares tanked in late trading. This morning, perhaps to stem the slide, it disclosed in a separate SEC filing that Chinese internet giant Tencent Holdings had acquired 145.78 million shares of SNAP, the crappy non-voting Class A common stock. This briefly boosted shares in early trading, until people started reading the...

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How Can a Company Once Worth $30B Lose $443M on Just $208M in Revenues? Here’s How

This is where hype (and money) goes to die. Snap Inc., the parent company of Snapchat, reported late Tuesday that its revenues in the third quarter rose 62% from a year ago, to $208 million, while its net loss more than tripled to $443 million. How? It wasn’t easy, but here’s how they did it: Cost of revenues, $211 million, exceeds revenues, a troublesome indicator. Most of it is what Snap pays Alphabet for hosting its content in the Google Cloud. Research and development expenses,...

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Malls and their Hapless Investors Keep Getting Crushed

(Creative) Destruction in the brick-and-mortar meltdown. Investors in retail malls didn’t need another wake-up call. They’ve been wide awake all year, hearing from Wall Street that there’s no brick-and-mortar meltdown even as the shares of their real estate investment trusts (REITs) have gotten crushed by the travails of brick-and-mortar retail and the over-malling of America. But late Thursday, mall investors got another unneeded wake-up call. CBL Properties, a mall REIT with 119...

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How US Debt Slaves Get Trapped by “Deferred Interest”

But over the next 2 months, they’ll try to prop up US retailers and the entire global economy. Credit cards play a huge role in what the US retail industry hopes will be a $682-billion splurge by Americans over the holiday selling season. Already, total revolving consumer credit outstanding – mostly credit cards – has reached $1 trillion, up 5.4% from a year ago, and will surge over the next two months, as US consumers try to prop up the global economy by going deeper into debt. So the...

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Pickup Sales Boom, Cars get crushed, Tesla Deliveries Plunge

Carmageddon for Tesla, Fiat Chrysler, Hyundai, and Kia. Tesla had its worst quarter ever, which means something. It reported today that it lost $671 million on $2.98 billion in revenues. In the three quarters this year, it lost $1.47 billion. The Model 3 isn’t happening in any appreciable numbers. Only a few hundred hand-fabricated units have been rolled out, with mass-production being woefully behind the company’s silly promises. All this is OK for a young company trying to needle the...

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