|Day's Range||328.00 - 328.00|
Alphabet’s Waymo unit is the clear leader in the race for autonomous driving leadership, according to a team of analysts at Wedbush.
(Bloomberg) -- First there was the financial crisis of 2008. Then years of negative interest rates. Now, banks face what one financial regulator calls the “real game changer.”Jesper Berg, the head of the Financial Supervisory Authority in Denmark, says the next big threat for banks is the rapid spread of big tech into financial services. The competitive tool is personal data and the playing field is far from even, he says.“The banks are constrained in what they can do with data, even using data across business lines, not to mention sharing it,” Berg said in an interview in Copenhagen.The concern is that banks need to comply with strict regulatory requirements to protect client data. But their industry is being infiltrated by competitors that aren’t necessarily subject to the same rules. Berg suggests that political intervention might be the way forward, if banks are to have a fighting chance.“The biggest issue that needs to be decided at a high level of politics is, do we somehow make rules in relation to sharing and use of data similar, or do we keep a difference?” Berg said. “We need to think about whether, and when, we set rules that are different for different types of companies, where the activity is basically the same.”Berg oversees a financial industry that has dealt with negative interest rates longer than any other, after Denmark’s central bank first went below zero in 2012. That’s weakened the finance sector, potentially putting it on the back foot as it tries to strengthen its defenses against new competitors. Lars Rohde, the governor of the Danish central bank, has warned that banks will need to rethink their entire business model to adapt to the new world.The BehemothsBecause of the vast pools of information they collect, tech giants like Google, Amazon and Alibaba already enjoy a competitive advantage over banks, Berg says.According to a February report by the global Financial Stability Board, the proprietary consumer data that big tech extracts from social media, combined with the industry’s access to cheap funding, mean it “could achieve scale very quickly in financial services.”Part of the ascent of tech companies within financial services has to do with PSD2, a European directive designed to open up the payments industry to competition. In practical terms, it means banks need to pass on their data for free to non-banks, provided customers agree.“You could say that we’ve gone to the extreme with PSD2,” Berg said. “Not only can banks not use the data fully internally, but they cannot sell it. They have to give it away.”ChinaThe FSB’s February report makes the point that reducing entry barriers for big tech might ultimately hurt competition in financial services. As an example, the FSB highlights China, where just two big tech firms account for over 90% of the mobile payments market.“Big data lives off selling information about you and me, so that other companies can target us more specifically,” Berg said. “The potential real game changer is big data, depending on what they choose to do.” That’s because “they know more about us than anyone else.”Tech companies that offer loans or take deposits will need to apply for licenses and abide by the same rules as banks, Berg said. But the requirements are far murkier for those that decide to operate as a platform for other financial service providers, and that puts banks at a competitive disadvantage.“The link to customers would essentially be with big tech,” Berg said.“And everyone knows that whoever has the link to the customers” ends up being able to “cream the profit,” he said.To contact the reporter on this story: Frances Schwartzkopff in Copenhagen at email@example.comTo contact the editor responsible for this story: Tasneem Hanfi Brögger at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Amazon.com Inc.’s bid to buy into one of the U.K.’s most successful startups may get caught up in antitrust authorities’ fear that they made mistakes in the past.The Competition and Markets Authority has until Wednesday to decide whether to continue a two-month-old probe that froze Amazon’s bid of around $500 million for a minority stake in food-delivery service Deliveroo.“The CMA is very interested in tech giants extending their tentacles into other markets,” said Alan Davis, a competition lawyer at Pinsent Masons in London. Antitrust regulators “are paranoid about it at the moment because they are concerned they have not looked at these mergers enough in the past, like Facebook-WhatsApp.”Authorities were put off over Facebook Inc.’s change of position on how it handled data from WhatsApp, prompting EU officials to accuse the company of misleading them to win approval for the takeover in 2014. Big Tech is a flash point now for antitrust across the globe. In the U.S., there are probes into Google, Facebook and Amazon over allegations they unfairly hinder competition. The CMA is investigating how Google plans to use Looker Data Sciences Inc. data before approving that $2.6 billion takeover.While the CMA’s mission is in part to ensure big deals won’t hamper competition, it doesn’t usually investigate bids for minority stakes. It may have been moved to act this time because of Amazon’s access to an unending reservoir of data from its many businesses. And CMA’s Chief Executive Officer Andrea Coscelli has said that it was a mistake to allow deals like Facebook’s purchase of Instagram.“U.K. regulators may have some antitrust concerns with the proposed investment,” said Bloomberg Intelligence analysts Aitor Ortiz and Diana Gomes. “One of them could be whether Amazon could get access to Deliveroo’s user data, leveraging the delivery giant’s position in other markets besides on-demand restaurant delivery, such as online groceries.”Amazon, Deliveroo and the CMA declined to comment on the matter.Cut-Throat CompetitionThe food-delivery business is no stranger to the regulator’s attention. Two years ago the agency began investigating Just Eat Plc’s merger with a smaller rival Hungryhouse, eventually allowing it to go through because of the competition in the sector.Since then the delivery business has seen a wave of acquisitions and international expansion. Just Eat agreed to a 5 billion-pound merger ($6.6 billion) with Dutch firm Takeaway.com NV in July, while Uber Technologies Inc. was reported to be showing interest in Spanish startup Glovo. However, according to food-service consultant Peter Backman, competition in the sector remains strong.“It’s getting more intense because the pressure to get scale is becoming more intense,” said Backman, a former director of Horizons FS. “Although the market has gotten bigger, they are under huge pressure to become profitable.”Deliveroo has never turned a profit, losing 232 million pounds last year despite a 72% increase in global sales. A ruling against Amazon would be a setback for the U.K. company, which has already raised $1.53 billion in investor funding.In August, it was forced to make an abrupt retreat from Germany after struggling to get a grip on the market.For Amazon, the stakes aren’t as high, but if the CMA decision goes the wrong way, it faces yet another embarrassing exit from a market it has found difficult to crack. It closed its own U.K. food delivery unit Amazon Restaurants U.K. in December 2018, with its American counterpart following suite last summer.To contact the reporter on this story: Eddie Spence in London at email@example.comTo contact the editors responsible for this story: Anthony Aarons at firstname.lastname@example.org, Christopher Elser, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Google, Alibaba and other "Big Tech" companies could be forced to share data on financial services customers with banks and financial technology firms to prevent unfair competition. As Facebook's plan for its Libra "stablecoin" faces scrutiny, a global body of regulators from the world's main financial centres said that Big Tech's growing tentacles raised questions for financial stability, competition and data privacy. The Financial Stability Board (FSB) called in a report released on Sunday for "vigilant monitoring" of Big Tech's shift into financial services, which it said could crimp the ability of banks to generate capital through retained profits.
We talked about Game Creek Capital about 8 months ago. Game Creek Capital is founded by Scott Mayo and taken over by Sean Murphy after Scott's death in 2010. Before Game Creek, Sean Murphy cut his teeth at Vardon Capital Management as a senior analyst covering telecom, media, and consumer stocks. Murhpy has a B.A. […]
Other featured articles discuss a consumer finance stock that looks attractive now and a struggling retailer in need of a miracle. "5 Funds and 5 Stocks to Ride the Small-Caps Rally" by Avi Salzman and John Coumarianos examines why shares of companies with market values of $5 billion or less, such as Darling Ingredients Inc (NYSE: DAR), could thrive if the economy holds up. See why Barron's thinks Capital One Financial Corp. (NYSE: COF) is cheap and looks attractive right now.
(Bloomberg Opinion) -- At this time last year, everyone was waiting for Santa Claus and his rally — and he never showed up. Instead, there was a brutal stock market sell-off. A year later, we have a surprise visitor: Goldilocks.The cliche has it that a Goldilocks economy is neither too hot (to push up rates and inflation) nor too cold (to push down share prices and employment). It is an irritating way to describe ideal conditions for markets and the economy. For the decade since the financial crisis, it has seemed absurd to suggest the U.S. economy is in any such fairy tale. The Federal Reserve saw a risk of over-heating and spent 2018 tightening monetary policy, only to be forced by the horrified market reaction into executing a U-turn in 2019.As the year comes to an end, Goldilocks is back. The unemployment rate, at 3.5%, is as low as it has been in half a century, while core inflation, at 2.4%, remains comfortably within the target range of between 1% and 3% — which it has occupied for a quarter of a century.If we use President Jimmy Carter’s old concept of the Misery Index, adding the core inflation and unemployment rates, we find misery is close to its lows of the last 50 years:There’s also something distinctly Goldilocksy about market views of the Fed. After two years of persistent bets that the U.S. central bank would be forced to cut far further than it wanted, fed funds futures are now implicitly pricing only one more quarter-point reduction from the current level, and see any additional cuts as unlikely until 2020 is half over. Fed Chair Jerome Powell has already said that he thinks monetary policy is in a good place and that he sees little reason to move it; approaching the last rate-setting meeting of the year in a few day’s time, it appears the market at last cautiously agrees with him.Many believe that the Powell Fed has listened to good advice, and thus thwarted an incipient recession. That helps to explain why the S&P 500 Index is now up more than 25% for the year, and within a whisker of its all-time high set in November, amid low volatility. But the very strength of that sense of relief now opens the risk that the economy moves in short order toward running too hot.It is very unusual for the Fed to cut rates three times in quick succession when the economic backdrop otherwise looks this strong. The only comparison that comes close is 1998, when the central bank under Alan Greenspan cut the fed funds rate by 75 basis points in the wake of the market disruption caused by the meltdown of the Long-Term Capital Management hedge fund. That fueled one of the most dramatic stock market rallies in history, which ended with the bursting of the dot-com bubble in 2000, and a recession.In retrospect, those rate cuts appear to have been a mistake. Will history come to view this year’s U-turn toward cheaper money in the same way?The LTCM debacle, which followed Russia’s debt default and the Asian crisis, was a special and very different case. Corporate credit markets ground to an almost total halt, in a dry run for the credit crisis that would follow a decade later. The Fed felt obliged (rightly or wrongly) to act to stop a financial accident, and in the process provided the money for a stock market mania.Markets have at no point this year looked anything as extreme as they did during the LTCM crisis. But there is a critical similarity: As in 1998, we saw a sudden summer resurgence of recession fears. Google searches for the word “recession” in the U.S. spiked in August to levels unseen since the country was last in recession: There were reasons for the fear. The trade war intensified during the summer; the European Union’s manufacturing sector fell into recession; long-term bond yields went negative in much of the world; and the U.S. Treasury yield curve inverted in what is usually a sure-fire indicator of an imminent slump. This was enough to “create a recession in the minds of most,” as Leuthold Group’s chief investment strategist Jim Paulsen put it. Hence the unambiguously strong employment data for November — published at the end of a week which had also revealed plenty of data suggesting a recovery in global manufacturing — feels almost like exiting a recession to many investors. The reality is, as in 1998, the U.S. economy has remained strong throughout. The 1998 analogy cuts both ways. The economic recovery carried on for a while, and late 1998 proved to be a great time to buy stocks. The problem was that this soon turned into an economic over-heating, prompting the Fed to begin a series of rate hikes in May 1999. And of course anyone who bought stocks needed to be prepared to sell them quickly. Even though economic misery is near all-time lows, then, we will probably soon start questioning whether the Fed cut rates too much. And while the conditions seem good for a Goldilocks boom in share prices, the Fed has cut at a point when stocks already looked very expensive (in another echo of 1998). Just as in 2000 (also a presidential election year), we can expect questions about asset-price bubbles in 2020. To contact the author of this story: John Authers at email@example.comTo contact the editor responsible for this story: Beth Williams at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.John Authers is a senior editor for markets. Before Bloomberg, he spent 29 years with the Financial Times, where he was head of the Lex Column and chief markets commentator. He is the author of “The Fearful Rise of Markets” and other books.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Chris Ballinger came away from a year of crunching numbers at Toyota Motor Corp.’s Silicon Valley skunkworks convinced that his dream of automotive automation was no more fanciful than his bosses’ ambition to make a vehicle that can drive itself.So the former derivatives trader who spent 14 months as finance chief at Toyota’s innovation hub launched a non-profit that aims to turn cars into rolling wallets able to autonomously make and receive payments in a virtual currency. Drivers would earn small sums for sharing data on everything from traffic congestion to weather and be debited for infrastructure use and contribution to pollution.‘’Everyone focusing on autonomous vehicles thinks they’ll be able to drink cognac in the back, but machines will do many other things autonomously before they can surmount a problem of driving around somewhere like Bangalore or in particularly bad weather,” said Ballinger, a 62-year-old resident of Los Angeles, where he runs his Mobility Open Blockchain Initiative. “It’s a very hard engineering problem, but setting up machine-to machine payments is comparatively very simple.”Simple is a relative word. The vision is as futuristic as it is ambitious. It depends on a myriad of technological advancements, not to mention regulatory change and cooperation among traditional rivals. While cars already have ever more computing power, changing long-held views on infrastructure funding, vehicle ownership and even the nature of money could prove insurmountable. And then there’s the law of unintended consequences.“When tech is applied to cities and transportation by smart people who understand tech but don’t understand cities, the outcome can actually be bad for cities and create new or bigger problems,’’ says Brent Toderian, former chief city planner in Vancouver. “There’s a danger to boosterism with these kinds of ideas, and a need to be cautious and critical in a way that tech folks often aren’t.’’ As an example, he said new technology could lead to more driving, reducing any positive environmental impact such advances were supposed to deliver.Whatever the challenges, the mobility sector is -- in industry jargon -- a burning platform, meaning urgent change is required to head off obsolescence. While artificial intelligence and blockchain could make Ballinger’s vision possible, the dominance of a small club of Silicon Valley heavyweights means automakers risk being left behind in the digital age, said Jamie Burke, an adviser to MOBI and founder of Outlier Ventures, which invests in companies developing such technologies.Facebook Inc.’s Libra stablecoin, a global currency that social networking behemoth is developing, is like gasoline on the burning platform he said.“We don’t have the luxury of tinkering around anymore, we need to get our acts together to accelerate action toward what is moving already,” said Ballinger. “Everybody is asking should every market have its own token and do we need to have one?”Ballinger co-founded MOBI last year with the likes of BMW AG and Ford Motor Co among its founding members. The consortium, which now has about 90 members from International Business Machines Corp. to Honda Motor Co., is exploring how blockchain and related technologies can contribute to a safer and more efficient transport system, while also reducing congestion and pollution.The first blockchain — a public ledger -- was created to track Bitcoin transactions, and the technology has since been adopted far beyond the realm of cryptocurrencies for everything from enabling international payments to verifying products in a supply chain. The digital currency universe has also expanded rapidly in the past decade, with low-volatility digital tokens known as stablecoins among the fastest growing sub sectors.For the vision to materialize, city infrastructure will have to be equipped to communicate with vehicles. Smart cities, urban metropolises pulsating with sensors and powered by artificial intelligence, are on the drawing board. Alphabet Inc.’s urban innovation unit Sidewalk Labs LLC is working on creating a “city of the future” on Toronto’s waterfront.The building blocks exist, making the bigger challenge getting the various technologies and devices to communicate, according to Maria Minaricova, head of business development at Fetch.ai, a Cambridge, U.K.-based company focused on AI, blockchain and internet of things technologies that is also a member of the MOBI consortium.“There are already so many sensors -- cars have sensors, so do traffic lights and cameras, and so on -- but they’re currently disconnected and what’s also missing is interoperability,” said Minaricova. “Historically if you produced somethingm, you would keep it on your platform and it could only communicate with your devices, but the new generation will need to open this up so all devices can speak to each other.”MOBI is now working with BMW, Ford, Honda, General Motors Co. and Renault SA to develop a trusted digital identity for vehicles as a first step toward enabling a mobility payments network. Last month MOBI hosted a gathering of industry executives in Los Angeles to discuss how such a payments system might work.MOBI could develop an industry stablecoin, as low volatility virtual currencies are known, or use an existing coin to make and receive micropayments on a blockchain network, says Ballinger. The project would not only change how vehicles and cities interact but could also provide a real world use case for digital currencies beyond speculation.“Everyone is excited by the promise of technology and waiting for the first killer app, for what will be to digital currencies what email is to the internet,” he says. “That is, where does it get used in a way that consumers find it adds value compared to existing payment systems, and we think mobility and machine-to-machine payments are likely to be one such area because we have big issues with funding public infrastructure and charging for congestion and carbon.”To contact the author of this story: Alastair Marsh in London at email@example.comTo contact the editor responsible for this story: James Hertling at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Democratic Representative Alexandria Ocasio-Cortez and Presidential candidate Bernie Sanders are taking a victory lap after Amazon.com Inc. and other technology giants leased millions of square feet of office space in New York City -- without the billions of dollars in government support that Amazon tried to negotiate earlier this year.Amazon signed a lease on Friday for 335,000 square feet in the Hudson Yards neighborhood, enough space for more than 1,500 workers. The largest U.S. e-commerce company said it wasn’t getting tax benefits or other incentives.A few weeks earlier, Facebook Inc. leased more than 1.5 million square feet in the city, and the social-networking giant is looking for 700,000 more square feet, according to the Wall Street Journal. Google is also in the midst of a major expansion in the city, adding thousands of employees in coming years.The moves suggest that New York’s deep pool of talented workers is still attracting tech companies even after Amazon abandoned a much larger expansion in the area following fierce public criticism of almost $3 billion in tax breaks and subsidies promised to the company.https://t.co/AC64pG0nZI pic.twitter.com/xzCepkX4AV— Alexandria Ocasio-Cortez (@AOC) December 6, 2019 Ocasio-Cortez, who represents parts of the Bronx and Queens, was a vocal critic of Amazon’s doomed HQ2 deal, and she tweeted that the company’s recent lease proved she was right.Sanders, who has slammed Amazon for warehouse working conditions and the company’s low federal tax rate, weighed in this weekend, too.Their comments were pilloried by some on Twitter, who said that 1,500 Amazon jobs are a fraction of the company’s earlier plan to bring about 25,000 workers to the area.Ocasio-Cortez responded by arguing that Amazon’s larger jobs pledge was longer-term and would have cost the city more.To contact the reporter on this story: Alistair Barr in San Francisco at email@example.comTo contact the editors responsible for this story: Tom Giles at firstname.lastname@example.org, Virginia Van Natta, James LuddenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The co-founders of Google, Larry Page and Sergey Brin, stepped down on Tuesday, but that announcement just cemented the end of the company’s slow transformation from an idealistic search engine to an unfeeling tech monolith.
Sundar Pichai, who recently took over as Alphabet's CEO, will face a host of tricky regulatory, financial and operational challenges in the new year.
(Bloomberg) -- Less than a year after Amazon.com Inc. walked away from a planned headquarters in New York, the e-commerce giant has announced a significant expansion in midtown Manhattan.The company signed a lease for 335,000 square feet in the Hudson Yards neighborhood on the west side. The new office will accommodate more than 1,500 workers and is slated to open in 2021, according to an e-mailed statement.“As we shared earlier this year, we plan to continue to hire and grow organically across our 18 Tech Hubs, including New York City,” the Seattle-based company said.Amazon abandoned plans in February to build an additional headquarters in New York’s Long Island City neighborhood following fierce public criticism of tax breaks promised to the company, and concerns about the impact on housing costs and transportation. The move sent shock waves through New York’s real estate community, which worried that the city was becoming inhospitable to business.But recent months have shown that companies are still attracted to New York and its deep pool of talented workers. Facebook Inc. announced that it was leasing more than 1.5 million square feet at Hudson Yards last month. And Google is also in the midst of a major expansion in the city.Amazon said it is not receiving tax benefits or other incentives for its new office, which will be located in SL Green Realty Corp.’s building on 10th Avenue between 33rd and 34th Streets. The outpost will be roughly the same size as the company’s other corporate offices in New York, where it currently has more than 3,500 employees in its tech hub.Dow Jones reported the lease earlier on Friday.To contact the reporter on this story: Noah Buhayar in Seattle at email@example.comTo contact the editors responsible for this story: Craig Giammona at firstname.lastname@example.org, Linus Chua, Stanley JamesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Alphabet’s revenue grew 20% in the latest quarter, but earnings haven’t kept pace. Here’s a road map to boosting profits and the stock.
The stock market rally started the week with losses, but erased losses by Friday. DocuSign, Shopify and Progyny broke out on news while RH soared. Google founders left management roles.
Back in April, Pinterest (NYSE:PINS) came public in a high-profile offering, with the shares jumping 28% on its first day of trading. The stock price would hit a high of $36 by late August. But since then, things have not gone too well. Keep in mind that Pinterest stock is actually below its initial offering price, which was $19. This puts the market cap at about $10.5 billion.Source: tanuha2001 / Shutterstock.com Part of the reason for this has been the rotation away from consumer internet initial public offerings (IPOs). For example, Uber (NYSE:UBER) is off 33% from its IPO while Lyft (NASDAQ:LYFT) is down even more. All in all, investors are looking beyond the top line and instead want to see a pathway to profitability.In a way, this is actually good news for the PINS stock price. Note that -- at least on an adjusted basis -- the company has been able to show modest profitability.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut unfortunately, it has still not been enough. The latest earnings report was not necessarily encouraging, and yes, this was the main reason that Pinterest stock has taken a dive.Now the company did beat on the bottom line, with adjusted earnings of 1 cent a share. By comparison, the consensus was for a loss of 4 cents a share.The problem? Well, revenues were off a bit. They came in at $279.7 million, while the forecast was for $281 million. No doubt, in today's tough environment, there is little room even for a small miss!Yet, I think this has been an overreaction. * 7 Hot Stocks for 2020's Big Trends Let's face it, Pinterest is still growing at a torrid pace. The quarterly ramp in revenue was 47% year-over-year -- and it is also important to note it is getting tougher to churn out the growth as the revenue base increases.Besides, Pinterest is continuing to invest in bolstering the platform. For example, there is more relevancy and personalization, such as with using algorithms for recommendations. This should not only allow for a more engaging experience, but also improved click-through rates and monetization.Next, Pinterest has revamped the design for its Apple (NASDAQ:AAPL) iOS and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) Android apps. Much of this is the result of extensive user feedback. There has also been more of an emphasis on lessening the friction of the user experience.Oh, and Pinterest is broadening the concept of topics for pinning. To this end, there is a collection for well-being activities, such as to deal with stress and anxiety. As seen with the huge success of the Noom app, this approach does have lots of potential. Bottom Line on Pinterest StockWhen it comes to social networks, there needs to be great care with the monetization. As a result, Pinterest has been methodical -- but this does not mean it has been a laggard either. The company has continued to improve the ad features, in terms of bidding, targeting and analytics. There have also been interesting partnerships for shoppable pins, such as with Shopify (NYSE:SHOP).But perhaps the biggest opportunity for PINS stock is the global market. During the latest quarter, worldwide monthly active users (MAUs) increased by 28% to 322 million. There was double-digit growth in nearly all countries. In fact, Pinterest currently sells ads in 28 countries, up from 19 in the second quarter.Something else: the global average revenue per user (ARPU) is 90 cents; That is, there is room for improvement here.Thus, Pinterest should be a solid growth play. The company also provides an immersive user experience, which is critical for today's e-commerce shopper and is unique when compared to other platforms like Amazon (NASDAQ:AMZN) and eBay (NASDAQ:EBAY). So, with the recent weakness in Pinterest stock, there is an opportunity here for investors.Tom Taulli is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Hot Stocks for 2020's Big Trends * 7 Lumbering Large-Cap Stocks to Avoid * 5 ETFs for Oodles of Monthly Dividends The post Pinterest Stock: Should You Pin It To Your Portfolio? appeared first on InvestorPlace.
(Bloomberg) -- Peloton Interactive Inc. has been pilloried online and punished on the stock market following the release of a holiday ad for its stationary exercise bike that was deemed culturally insensitive. But the backlash could be a good thing for the company in the long run.The commercial, which features a woman documenting a year in her life with the Peloton bike her male partner gave her, struck some viewers as out of touch -- suggesting the already thin “Grace from Boston” was undergoing a strenuous workout in order to lose weight for the guy. The video, released about a month ago, went viral on social media, eliciting a scathing parody by comedian Eva Victor and prompting Peloton to close comments on the official YouTube video.As the internet buzz seemed to hit a peak earlier this week, Peloton’s stock fell 9%. But some experts say the increased attention could end up boosting sales. The shares were up 3.7% on Friday in New York.“They might benefit more because people are looking it up and learning more about it,” Laura Ries, president of advertising consultancy firm Ries & Ries, said. It’s still a short-term bump for a company that has historically been largely successful with marketing, with a total member base of 1.6 million people including more than 560,000 who have one of the proprietary bikes or treadmills plus a fitness subscription, according to Peloton’s most recent quarterly report. The official Peloton ad on the company’s YouTube channel has been seen by more than 3.6 million people.The controversy comes at a crucial time for the New York-based company, which is new to market scrutiny after listing shares in September, as it seeks to capitalize on the all-important holiday sales season and expand in new markets like the U.K. and Germany. The shares had gained 27% since its initial public offering before the wave of internet commentary dragged it down on Tuesday. The company is also facing increased competition in the booming at-home fitness market, especially among workout apps. Nike Inc., Aaptiv Inc. and apps like Kayla Itsines’s Sweat with Kayla have all gained followings for exercise programs available on a user’s phone.Peloton has been punished by Wall Street for its focus on growth over profitability. The company sells a stationary bike starting at about $2,000 and a treadmill that costs about $4,000, in addition to a basic “connected fitness” subscription plan at $39 a month for those pieces of hardware, and the separate digital apps that don’t require equipment. Its loss narrowed in the three months ended Sept. 30 to $49.8 million.The stock surged almost 10% last Friday after the company was reportedly seeing strong demand on Black Friday. And earlier this month, Peloton lowered the price of its digital subscription app to $12.99 a month from $19.49 in conjunction with the launch of new apps for Amazon’s Fire TV and the Apple Watch, a move that could entice new users. JMP Securities analysts raised their price target on the stock after the subscription reduction, saying it “broadens Peloton’s reach, improves conversion, and reduces purchase friction.” Ronald Josey, a JMP analyst, said there are “a lot of good things going on” at the company and that people will continue to buy the bike and other products despite the controversy.According to the most recent earnings report, Peloton expects its user base to grow to 680,000 or more by the end of its second quarter thanks to holiday sales and New Year’s resolutions.Scott Galloway, a professor of marketing a the NYU Stern School of Business, said the commercial itself is tone deaf and borderline offensive. But “in this attention-driven economy, anything that gets attention is arguably a positive,” he said in an interview. “It’s bringing Peloton into the social discourse on very regular basis, which is what ads are supposed to do.” If Peloton had to do it again, Galloway said, “I’d argue they probably would.”(Updates shares in third paragraph. A previous version of the story corrected a company error in the subscription price.)To contact the reporter on this story: Julie Verhage in New York at email@example.comTo contact the editors responsible for this story: Mark Milian at firstname.lastname@example.org, Molly Schuetz, Anne VanderMeyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The Communications Workers of America union filed a federal labor charge against Alphabet Inc's Google on Thursday, accusing the company of unlawfully firing four employees to deter workers from engaging in union activities. The complaint, seen by Reuters, will trigger a National Labor Relations Board (NLRB) investigation into whether Google violated the four individuals' right to collectively raise concerns about working conditions. Google fired the four named employees "to discourage and chill employees from engaging in protected concerted and union activities," the filing states.
Nostalgia is a powerful force when it comes to consumer trends. You need look no further than the resurgence of turntables and vinyl records at a time when everyone is streaming music on a monthly subscription plan to see this effect. Record sales are seeing double digit growth while CDs and digital download purchases slump.Source: RistoH / Shutterstock.com That same nostalgia is at play in the mobile phone industry. Motorola has resurrected the iconic Razr flip phone as a premium smartphone with a folding OLED display. BlackBerry still offers a handful of smartphones with physical keyboards through a licensing agreement with China's TCL. However, the most successful nostalgic mobile phone reboot belongs to Nokia (NYSE:NOK). * 7 Hot Stocks for 2020's Big Trends Under a 10-year licensing agreement signed in 2016 with HMD Global, the Nokia brand returned to mobile phones after a disastrous deal with Microsoft. Manufacturing is handled by a Foxconn spinoff called FIH Mobile. The partnership quickly bore fruit and the first of the new Nokia Android smartphones launched at Mobile World Congress in 2017. Also released were new versions of the company's iconic and hugely popular feature phones.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Reception to New Nokia PhonesBreaking into the smartphone business is difficult. The players are established, and trying to convince consumers to take a chance on a newcomer instead of buying one of those "it" phones from Apple (NASDAQ:AAPL) or Samsung is tough. Amazon (NASDAQ:AMZN) took a stab at it in 2014 with the Fire Phone and quickly gave up. Alphabet's (NASDAQ:GOOG, NASDAQ:GOOGL) Google has been trying hard with its Pixel smartphones, but after four generations and class-leading camera technology, the Google Pixel has failed to crack the market in a meaningful way.Nokia's new smartphones including the Nokia 6 were eagerly anticipated. By promising a combination of quality, the latest version of Android, and budget-friendly pricing, the new smartphones also appealed to international markets. With a Full HD display, Qualcomm (NASDAQ:QCOM) Snapdragon 430 processor and a 16MP camera, the $229.99 Nokia 6 was sold through Best Buy in the U.S., and then released globally. The company also released updates of the classic Nokia 105, 130 and 3310 feature phones.In 2017, it was estimated that 8.7 million Nokia smartphones were sold globally, along with an impressive 59.2 million feature phones. In comparison, roughly 1 million TCL Blackberry smartphones were sold that year.By Q2 2019, HMD (Nokia) was in the top 10 list of global smartphone vendors -- despite an overall 1.2% decline in smartphone sales -- with 4.8 million units shipped that quarter. Cashing in on NostalgiaOn the smartphone front, HMD is depending on the Nokia brand, combined with quality design and affordable pricing. But it's on the feature phone front where the company is really cashing in on consumer nostalgia. The updated Nokia 3310 was infamous for a battery that lasted forever and its virtual indestructibility. Last year, it was a reboot of the 8110 slider "banana phone" made famous by its appearance in The Matrix.A few months ago, the $99 Nokia 2720 flip phone was launched. It's updated with a 2.8-inch color display (plus a 1.3-inch external display for notifications), 27-day battery standby, and support for apps like Twitter (NYSE:TWTR), Facebook (NASDAQ:FB), and Google Maps.Also released in September was the Nokia 9 PureView, its most powerful Android smartphone yet, and one that leverages the company's famed camera capabilities. The new flagship smartphone (which goes for $449.99), features a 60MP and five camera PureView system with ZEISS optics. Does Nokia Actually Make Any Money From Phone Sales?The full financial terms of the licensing deal with HMD Global weren't revealed. However, InvestorPlace's Will Ashworth has been told that Nokia makes between $11 and $23 per smartphone in patent and licensing fees. Several years into the deal with HMD Global, whether the Nokia mobile phone revival will ultimately be a success is still up in the air. Either way, Nokia gets brand recognition from those cool retakes on its classic phones, while finally getting its foot in the door with Android smartphones. And it does so without risking its own money, instead making a small profit off each device sold.As of this writing, Brad Moon did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Hot Stocks for 2020's Big Trends * 7 Lumbering Large-Cap Stocks to Avoid * 5 ETFs for Oodles of Monthly Dividends The post Those Cool New Nokia Phones Arenat Made by Nokia appeared first on InvestorPlace.
As the newly anointed chief executive of Alphabet Inc., the Google CEO is now in charge of all operations at the $850 billion behemoth that includes a laundry lists of challenges from a federal antitrust investigation to employee backlash over harmful business practices and a slowing core ad business.
This week's most important stories include a record-breaking Cyber Monday, Google's co-founders stepping down and a new prediction that Apple's 2021 iPhone will be completely wireless.
Actor Sacha Baron Cohen has come out criticizing Google's founders after announcing the duo is stepping down from their CEO positions. Cohen has been outspoken about media companies being an active part in the spread of white supremacy and misinformation. Yahoo Finance’s Dan Roberts, Kristin Myers and Heidi Chung break it down on YFi AM.