Archive for category Business
Companies where employees are losing hope
By: Douglas A. Mcintyre Sept. 21, 2011 8:00 AM
24/7wallst.com
Some companies become so badly damaged because of changes in the competitive markets or due to poor management decisions that their employees lose hope. This may be due to the fact that they believe the corporations that they work for have little future, or that they will be laid off as their employers try to save these corporations.
This loss of hope is exacerbated by the state of the economy. A person who is fired now likely will find it extremely hard to find new work. Nearly 6 million Americans have been out of a job for more than half a year, which means that work is scarce either because companies have never recovered from the recession or because firms are concerned that a new recession has started to choke the economy.
It is impossible to know whether the employees at a very badly run company have completely hope in their situations. However, this is highly likely certain corporations. Layoffs have already started at many of these companies, sales have fallen, or Wall St. has passed a verdict they have faltered badly or failed.
24/7 Wall St. has compiled a list of companies that are in deep trouble. This is based on share prices, layoffs, analysts’ reports about the futures of these firms and the extent to which they have missed Wall St. predictions about earnings-per-share or are likely to in future.
1. Best Buy recently released earnings and they were much worse than Wall St. expected. Net income fell to $177 million, or EPS of $0.47, for the quarter ended Aug. 27, down from $254 million, or EPS of $0.60, last year. Analysts expected EPS of $0.52, according to a survey by FactSet. Best Buy dropped its forecast for the balance of the year. It took the action because of concerns about TV and phone sales, along with worry about the economy. Best Buy has had a string of earnings failures, due primarily to its failure to do well online. Best Buy recently said its website would carry items from third-party stores to expand its attraction to shoppers. This did nothing to improve the perception that investors have of the company. Fitch downgraded Best Buy in June. The company’s shares are off 30% in the last year. Shares of rival Amazon are higher by 60% for the same period.
2. Research In Motion posted earnings recently that show its sharp decline has accelerated. Several analysts now believe the RIM BlackBerry smartphone will be no more than a “niche” product in a market it controlled almost completely four years ago. The bad earnings news took shares down from $29.54 to $23.93 in one day. RIM’s stock is off almost 50% in the past year, while shares in rival Apple are higher by more than 40%. RIM shipped only 200,000 units of its PlayBook tablet PC last quarter. Expectations had been for a number more than three times that. RIM revenue fell by 10% in the most recent period to $4.2 billion — a horrible situation for a company that was one of the most well-known growth stories for five years. EPS fell to $0.63 from $1.46. The consensus among the media and Wall St. is that RIM has almost no chance to recover. The company has already started to cut costs. It said in July it would lay off 10.5% of its workforce.
3. Talbots shares traded above $17 in May a year ago. They now trade at $3 after dipping to $2.25 recently. After the company released earnings two weeks ago, research firm Sterne Agee downgraded the stock to “neutral” from “buy.” And the retailer posted results that were worse than expected. The corporation’s quarterly loss from continuing operations was $37.4 million, or $0.54 per share, compared to last year’s income from continuing operations of half a million, or $0.01 per share. The failing retailer said it expects to close about 110 stores in total, including 15 to 20 consolidations, through fiscal 2013. The corporation’s chief creative officer, Michael Smaldone, was fired as earnings were announced. Oddly, Talbots did not have a replacement when it took this action.
4. Hewlett-Packard announced earnings on August 18 and its shares promptly dropped to a 5-year low. HP also revised earnings forecasts down. Management said it may spin off the firm’s PC division, the largest in the world. So far, there are no takers. HP also discontinued it Palm operating system, which it bought only a year ago, and its tablet PC product. Investors believe, almost universally, that CEO Léo Apotheker does not have the strengths of his predecessor Mark V. Hurd, who was pushed out for ethical lapses. Wall St. seems certain that HP will lay off more people in addition to the sharp cuts it made in 2009 and 2010. It is generally accepted by analysts who cover the company that it has begun to lose the battles against Dell, Oracle, and SAP.
5. The U.S. Postal Service may be more troubled than any large public company in America. The organization said it may lose as much as $10 billion this year. It teeters on the brink of insolvency. Its workers’ compensation liability is more than $12 billion. The USPS management has suggested it shutter thousands of individual post offices, layoff as many as 200,000 workers, and close over 250 service centers. Another suggestion by management is that delivery be cut to five days a week. The rise of the use of e-mail and private air freight companies Fedex and UPS has doomed the old post office model. No one should expect that the suggestions of executives at USPS will go unchallenged. The American Postal Workers Union most likely will strike to fight the job cuts. Individual Congresspersons will press to keep offices open in their districts.
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MasterCard Gives Sneak Peek Into Mobile Payments Future
by Marc Ferranti, IDG NEWS – Sept. 15, 2011
PCWorld.com
MasterCard on Thursday gave a sneak peek into the near future of mobile payment systems and said that the Google Wallet application is within weeks of being rolled out commercially.
Google Wallet, announced in May, lets mobile phone users pay for purchases in stores by tapping their phones against point-of-sale terminals. At the tail end of a media and analyst day in New York, MasterCard demonstrated the application as well as other, future mobile payments systems.
Initially, Google Wallet will work only on Nexus S phones, made by Samsung, on the Sprint network. Nexus S phones now on the market incorporate Near Field Communication (NFC) technology on an embedded chip, which allows for payment information to be transmitted via the tapping technique.
Google Wallet will work on PayPass terminals already deployed in stores, though some of the terminals will need an upgrade to work with the applications, according to officials at the demonstration. In the U.S., there are about 150,000 retail locations equipped with PayPass terminals, according to Kathleen Reilly, vice president and senior business leader at MasterCard, who said the Google Wallet application will be rolled out “within weeks.”
How It Works
Up to now, the PayPass terminals have worked with NFC chips embedded in cards or special stickers placed on the outside of mobile devices. However, chips embedded in mobile phones offer big advantages, according to Mario Shiliaski, senior vice president of Innovative Platforms.
“A big advantage is that the chips are embedded in secure elements in the hardware, and if they are compromised they are designed to self-destruct,” Shiliaski said.
In addition, there will be a range of complementary applications for the technology that users will be able to download, Shiliaski noted. Google Wallets will initially offer the ability to store electronic coupons that can be redeemed at retail outlets, he said. Later this year, MasterCard’s inControl will be available for download, he added. InControl is designed to let parents or employers establish parameters for when, where and how their cards are used. Users will get text messages, for example, when certain limits are met.
Major retailers including Macy’s, Walgreens, Subway, Noah’s Bagels, American Eagle, Bloomingdale’s, Peet’s Coffee and Toys ‘R’ Us have signed up to work with Google Wallet.
MasterCard also opened the kimono on a number of projects cooked up by the MasterCard Labs, established after the financial services giant acquired Dublin-based OrbisComm in 2009.
The projects demonstrated Thursday focused on the company’s QkR platform, technology that embraces motion and audio signals as well as touch to allow for a range of applications. One application demonstrated Thursday allowed a phone user to scan a rebate coupon and share it via Facebook or Twitter.
“This allows for a different type of viral marketing, where people using this technology and sharing information with friends can get additional rebates,” said Garry Lyons, chief innovation officer at MasterCard.
The social-network sharing technology is working now in a pilot with more than a hundred users, Lyons said. A more futuristic application involves audio signal technology. In one demonstration, audio signals embedded in a TV commercial were detected by a mobile phone application that a person could then use to download coupons related to the advertisement.
QkR technology goes beyond mobile phones, however. Lyons showed off one application where users could input payment information via the Xbox Kinect, using gesture recognition to select items and go through a checkout process.
Netflix renames DVD-by-mail service, adds video games
by Mark Milian – Sept. 19, 2011
CNN
(CNN) — The ubiquitous red envelopes will endure, but they will carry a new name.
Netflix is rebranding its 12-year-old movies-by-mail service as Qwikster and adding video games to its catalog, Reed Hastings, the company’s CEO, announced Sunday night. The Web-streaming portion will continue to be called Netflix, he wrote on the company’s blog.
After the separation, people who subscribe to both services will have to log into two separate websites, Netflix.com and Qwikster.com, to manage their movie queues and account information, Hastings wrote. Customer reviews and ratings from Netflix will be ported to Qwikster for the launch, but after that, people will have to rate and search for movies on each site separately, he wrote.
Qwikster’s site currently presents a landing page that says it is “launching soon.” Hastings did not offer a timeline for Qwikster’s debut. Andy Rendich, the operations chief and 12-year veteran of the company, will run the new mail-order arm.
In addition to DVDs and Blu-ray discs, the new service will offer console games for Microsoft’s Xbox 360, Nintendo’s Wii and Sony’s PlayStation 3 for an extra monthly fee. The change will put pressure on GameFly, a competing service dedicated to subscription game mailings.
“Members have been asking for video games for many years, and now that DVD by mail has its own team, we are finally getting it done,” Hastings wrote. Responding to a question in the blog post’s comments, he wrote, “Old Fogey discs will last a long time.”
Another person questioned whether Netflix was setting the DVD business up to be sold off later and asked how long until that would happen. “A long time,” Hastings replied. “We know the business better than anyone else.”
Dish Network, which recently acquired Blockbuster in a bankruptcy auction for $320 million, is believed to be unveiling a revamped movie-streaming service on Friday. Netflix also faces competition from Hulu, YouTube and an array of new entrants.
Netflix customers were incensed in July when the company announced that it would stop bundling the streaming service for free with DVD-by-mail plans, effectively increasing the price for some by as much as 60%. Hastings finally offered an apology, not for the price hike but for failing to clearly communicate why the change was being made.
“It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes,” Hastings wrote. “I messed up. I owe everyone an explanation.”
Hastings has worried for the last five years that Netflix will fail to successfully adapt its business to growing opportunities, such as online video streaming, he wrote in a rare public admission for the savvy Netflix co-founder. He said he hoped to avoid similar fates to Borders Group, the bookstore chain that filed for bankruptcy this year, or AOL, the dial-up Internet king that is struggling to transform itself into an online media company after a nasty corporate breakup from Time Warner, which is the parent company of CNN.
Walmart, T-Mobile team to offer discounted cell plans
By David Lieberman, USA TODAY
Beginning Monday, the new service — Walmart Family Mobile — will offer discount pricing without requiring consumers to pay in advance, sign annual service contracts or go through credit checks.
It “was designed to focus on families that want to stay connected but want to save money doing it,” says Greg Hall, vice president of merchandising for Wal-Mart U.S.
Walmart Family Mobile customers will have unlimited talking and texting for $45 a month. Each additional line will cost $25.
Each Walmart Family Mobile user also initially can send and receive 100 megabytes of data. Walmart says that’s enough to send 500 text-only e-mails, send 100 e-mails with photo attachments and view 200 Web pages.
In what T-Mobile USA COO Jim Alling calls “a major innovation,” family members can share the data capacity. Also, those who use less than 100 MB can carry the balance over to the following month.
Once that 100 MB is gone, customers will have to pay extra for more data. Pricing will run $10 for 200 MB, $25 for 500 MB or $40 for 1 gigabyte.
Walmart doesn’t own any cellphone towers. It is reselling service it buys wholesale from T-Mobile. Walmart already has a similar relationship with Verizon, reselling its service under the Straight Talk brand. The Verizon/Walmart plans, which are prepaid, also cost about $45 a month.
Others retailers may follow Walmart’s lead to strengthen ties to consumers.
“The next likely participant is Best Buy,” says Dan Hays, who directs the telecom practice at consulting firm PRTM. Mobile providers are interested in partnerships because “It’s becoming clear that the network is no longer a major differentiator. It’s about the brand, the devices and the services that are offered.”
Hall says that Walmart will continue to offer multiple mobile phone services, although Walmart Family Mobile will be most prominently displayed in stores.
The service initially will be offered at about 2,500 Walmarts and to online customers. It won’t be available directly from T-Mobile. Also, the Walmart-branded service won’t be available in some parts of the country, especially rural areas, where T-Mobile doesn’t provide strong coverage, Alling says.
The T-Mobile executive says that his company decided to work with Walmart even though the new service could lure customers away from T-Mobile’s own services.
“While we will lose some (market) share on T-Mobile-branded (service), we know that this is going to take share” from other competitors, Alling says. He adds, “We have a broader range (of services) on the full T-Mobile brand.”
The companies declined to say how many customers they expect Walmart Family Mobile to have in the first year.
Contributing: Michelle Kessler
Bringing Subprime Sexy Back
by Andrew Leonard – Mar. 1, 2010 19:11 est
Salon.com
Near the end of “The Big Short,”
“How do you explain to an innocent citizen of the free world the importance of a credit default swap on a double-A tranche of a subprime collateralized debt obligation?” writes Lewis.
I’m betting Lewis was grinning as he wrote that sentence, because if you wanted to summarize “The Big Short” in just one line, it might be: the most lucid explanation yet offered to readers as to the importance of a credit default swap on a double-A tranche of a subprime collateralized debt obligation. Which might not sound like a whole lot of fun, but turns out to be a blast. As someone who has struggled for years to penetrate the obtuse world of structured finance and the role it played in blowing up Wall Street, I must give credit where credit is due. “The Big Short” is superb: Michael Lewis doing what he does best, illuminating the idiocy, madness and greed of modern finance.
Even though I have long been a huge Lewis fan, dating all the way back to “Liar’s Poker,” his hilarious and enlightening account of life as a bond broker in the go-go ’80s, I did not anticipate something this good, something capable of carrying its weight as a bookend to “Liar’s Poker’s” delights. My heart actually sank when the galleys of “The Big Short” arrived in the mail. A library of books exploring the financial crisis has already been published, with many, many more yet to come. My bedside table groans under the weight of their unfinished tomes. What could Lewis have to say that hadn’t already been said a million times over?
But then I made the mistake of glancing at the first chapter and literally could not put “The Big Short” down. Lewis achieves what I previously imagined impossible: He makes subprime sexy all over again.
The secret to Lewis’ success is a mixture of strategy and craft. Most books on the financial crisis find their locus inside the Wall Street firms at the heart of the action. The general theme: Hubristic banksters are oblivious to what they’ve wrought until it is too late. Chaos ensues. Lewis takes a different tack. “The Big Short” tells the stories of an odd collection of brilliant misfits who recognize that Wall Street is wearing no clothes, become convinced a massive calamity is nigh, and seek feverishly to profit off of their understanding. They are, in Wall Street parlance, the “shorts” — speculators who bet that the price of a given stock or bond or commodity or any derivative thereof will fall, rather than rise. Most shorts pick on a single company, or have a dour view of the direction of the price of corn or pork bellies. “The Big Short” is a little more ambitious: It’s a bet on financial sector collapse.
That’s the strategy. Today you can find plenty of people who claim to have seen financial disaster looming, but in “The Big Short” Lewis captures protagonists who put their money on the line. That they did so by employing Wall Street’s latest financial innovations against itself makes the story all the more fascinating. A typical Lewis “short” first figures out which mortgage lenders are making the absolutely crappiest loans, then determines which mortgage bonds (or collateralized debt obligations created out of slices of crappy mortgage bonds) are constructed from those loans, and then buys insurance, via credit default swaps, against the chance of those bonds or CDOs going bust.
In doing so these money managers have to war against their own self-doubt, the trepidation of their investors, the arrogance of Wall Street bankers, and the giddy momentum of financial markets that defy all logic for far longer than makes any rational sense. (There’s also a good question as to whether what they are doing should even be legal — the “shorts” are buying insurance on “properties” that they don’t even own!) But the loner-against-the-crowd mentality delivers a dynamic sense of tension that propels “The Big Short” merrily along. We know, as readers, exactly what will happen at the end, and yet still the ride feels nail-biting.
But what truly sets Michael Lewis apart from other writers is his craft. Watch him describe Steve Eisman, a man whose desire to make money shorting subprime mortgage-backed concoctions is inseparable from his growing sense of rage that Wall Street is getting away with a rigged game.
Great Stocking Gift Stuffer
The Slide
by Tony Pringle – Dec. 19, 2009
Market Mix Up
Looking for a great stocking stuffer for Christmas can sometimes be tough. But here at Market Mix Up, we found the best stocking gift that fits right into the stocking.
The Slide is a unique sunglass holder that fits right on your visor in the car. As common as it is to lose sunglasses, scratch them and even sit on them while getting in the car. Why not get your loved one a gift they’ll use forever, while allowing them to keep their expensive sunglasses shiny and new for a lifetime.
I just purchased the The Slide and I’m in love with it! I use to lose my sunglasses, scratch them and even break them. Now I have one less thing to worry about. The Slide never touches the lenses and secures your glasses gently by the temple bars. It’s the gift that keeps on giving!
For more info and to make an order, visit TheSlide.net.
Market Mix Up is a proud partner of The Slide!
Fool Search: Be GM’s Next CEO!
by David Williamson – Dec. 2, 2009
The Motley Fool
It’s time to update your resume!
Have you ever wanted to run an unprofitable relic in a challenging industry that’s saddled with debt and burdened by a questionable product portfolio? Do you enjoy the thought of having your decisions second-guessed by two separate federal governments, not to mention getting to reap the scorn of millions for taking taxpayer money?
If that sounds like the perfect job, then General Motors has the position for you!
With the sudden, unexpected resignation of CEO Fritz Henderson, GM Chairman Ed Whitacre and the rest of the GM board will begin the search for a new leader. Ideally, they’d like to find their very own Alan Mulally, an industry outsider who turned around rival Ford (NYSE: F) after rising through the ranks at Boeing (NYSE: BA). So, in this case, actual auto experience may be a detriment.
To help out the struggling American icon, we’ve decided to run our own search for GM’s next CEO. If you’re wondering what qualifies us to play headhunter, keep in mind that this isn’t our first rodeo. After Gil Amelio left the CEO job at Apple (Nasdaq: AAPL) but before Steve Jobs stepped in to fill the void, it was the Fool who stepped up with a community contest on how to save the struggling company.
When there was a vacancy at Yahoo! (Nasdaq: YHOO), thanks to Jerry “Microsoft (Nasdaq: MSFT) will never get this” Yang’s departure, we asked readers if they had what it takes to be Yahoo!’s next CEO. And maybe if Planet Hollywood had paid attention to our Save the Planet Contest (or at least not overexpanded in its quixotic quest to dominate the “mediocre food and tacky merchandise” sector), it would have staved off bankruptcy.
This contest is no joke. In the comments box below, tell us why you are the most qualified person to run General Motors and how you would turn its prospects around in 250 words or less. A complete list of contest rules can be found here.
We can’t promise the winner an actual job at GM, but we can give the winner a year’s subscription to Motley Fool Pro (a $1,999 retail value), which gives you access to Jeff Fischer and his incomparable team as they combine stocks, options, and ETFs to build a portfolio that can profit in any market.
But be warned: if you actually do get GM’s top job, company mascot Bob Lutz may sleep at the foot of your bed like the family pet.
Apply today!
