Market Morning: Lam Cracks Down, Alibaba FlyZoo Hotel, Seltzer Spiked, HP Cuts

Stock Market Roundup

She Won’t Go Like a Lam To the Slaughter

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Hong Kong’s Beijing-appointed chief executive Carrie Lam has invoked emergency powers that allow her to, among other things, insist that protesters stop wearing masks, so as to be able to identify them later in order to arrest them. The protesters who are wearing the masks aren’t too happy about this, so they came out to the streets wearing masks, in order to indicate their displeasure. Many would have been arrested for breaking the emergency powers directives, except that they were wearing masks so nobody knows who they are.

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The invocation of emergency powers allows Lam and her people to invoke any regulation whatsoever, as long as somebody says it’s in the public interest, meaning her government’s interest. She might try curfews, censorship, and a lockdown of trade, like a siege of one’s own city. This probably won’t be very great for Hong Kong stocks. “Almost all protesters wear masks, with the intention of hiding their identity. That’s why they have become more unbridled,” said Lam. “We can’t keep the existing regulations idle and let violence escalate and the situation continue to deteriorate.”

Alibaba’s FlyZoo Hotel a Hit

In a bit of good news coming out of China for a change, Alibaba’s (NYSE:BABA) FlyZoo hotel is a big hit. The whole hotel is cashless and there are no keys. It’s all automatic. The hotel has robot assistants that bring you room service accoutrements, and an integrated system responds to voice commands to turn on lights or TVs or maybe even flush toilets. Customers use AliPay to unlock the refrigerator in the room if they want to eat something. “Everybody loves the ease of getting into the hotel faster. No one would say ‘I want to go to the front desk and do more.’ It’s getting good traction, but there are still steps in the process that require you to go the front desk so we haven’t eliminated it completely, but when we do, I think people will adapt to it quite quickly,” said Peggy Fang Roe, Marriott International’s (NASDAQ:MAR) chief marketing officer for Asia. Alibaba wants to license these hotels out to companies like Marriott. The FlyZoo hotel does not contain a flying zoo. Yet.

Seltzer Gets Alcoholic In Latest Constellation Twist

Bubbly water is about to get spiked. Constellation Brands (NYSE:STZ) will be launching hard seltzer next year, and the marketing team is touting it as the “next big innovation” for Corona, the brand name the seltzer will be subsumed under. Perhaps just like bottled water took the world by storm when someone figured out that people would pay a huge premium for the privilege of buying water that comes in a bottle, now someone figured out that watered-down alcohol with bubbles could also be a big hit. Somehow, the drinks have 90 calories but zero carbohydrates, which should really be impossible barring the seltzer containing a serious amount of protein or fat. The seltzer will be available in tropical lime, mango, cherry, and blackberry lime. Exploring the pun world, another hard seltzer making company Crook & Marker CEO Ben Weiss reportedly sees a “bevolution that’s brewing”, clarifying that the pun is intended, but which pun exactly (bevolution or brewing) is unclear.

HP To Cut At Least 7,000 Jobs

HP (NYSE:HPQ) is downsizing. Personal computer sales are down, so the jobs are, too. The company is planning to cut between 7,000 and 9,000 jobs next year as part of a broad restructuring plan. The cuts will be by attrition, including employee exits and voluntary early retirement. HP is aiming to save $1 billion over the next two years. The PC market grew 1.5% in Q2, and HP’s sales grew by 2.6%, second behind Lenovo (OTCMKTS:LNVGF). In the meantime, the HP board has approved another $5 billion in stock buybacks.

Softbank Walloped by WeWork

SoftBank Group (OTCMKTS:SFTBY) founder and CEO Masayoshi Son is having a hard time raising money for a tech investment fund ever since WeWork got cold feet on its initial public offering. People seem to be suddenly concerned with the idea of profitability again. Called the Vision Fund 2, the original target for the fund was $108 billion when it was announced in July, but the only substantial commitment is $38 billion from Softbank itself. Softbank had poured $10 billion into WeWork, which is now in danger of going bankrupt if it can’t get another infusion of cash, because it isn’t even close to pulling a profit. Had an IPO gone forward, it would have been worth about $10 billion.


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