American Outdoor Brands to Split With Smith & Wesson
American Outdoor Brands (NASDAQ:AOBC) will be separating its gun business, run by Smith & Wesson, from its other outdoor products and accessories business, citing a change in the political climate. The split will be completed by the second half of 2020, just before any Democratic challenger bent on national gun control regulations would win the presidency, if that happens. Until now, the election of a Democratic candidate to president has pushed up the stock prices of gun firms mainly because the fear of gun control legislation fuels sales as gun purchasers hasten their purchases in light of the legislative threat. The fact that Smith & Wesson is now splitting off from the rest of the company indicates that the company is genuinely fearful now that gun control legislation could pass and seriously hurt the business, hence quarantining it from the broader company in advance. In corporate spin language, Barry M. Monheit put it this way, “We believe that separating into two independent public companies will allow each company to better align its strategic objectives with its capital allocation priorities.”
More Impeachment Hearings, More China US Trade Chatter
These stories will be ongoing for the foreseeable future and changing hourly. For the latest updates, check Twitter.
Germany Technically Avoids Recession, But Not Really
The engine of the European economy, Germany, is technically driving forward at 1 kilometer per hour while the ground under it is moving backward in the opposite direction much faster. This is because, while the economy officially “grew” at a rate of 0.1% last quarter, the inflation rate last recorded was 1.1%, meaning the economy is shrinking in real terms. Still, it’s not like anything fundamental or crucial changes when “growth” becomes “negative” other than the feelings of a few politicians who may or may not be able to retain their offices depending on the numbers crunched out of some bureaucratic office in Berlin. Speaking of those feelings, Economy Minister Peter Altmaier, who spends his time ministering to the economy, said, “We do not have a technical recession, but the growth numbers are still too weak.” The most important sector of the German economy, the automobile industry, is still particularly dependent on extremely low interest rates though in order to finance new car purchases, so whenever interest rates finally rise, the German economy is likely to tank hard.
WeWork Becomes Negative Unicorn with Inverted Horn
Unicorns are typically defined as initial public offerings at valuations of over $1 billion. WeWork is now an aborted unicorn with an inverted horn, having all the disadvantages of the public knowing how much it has lost this past quarter while never actually making it public to raise the money it wanted. WeWork lost $1.25 billion in the third quarter, leaving the company with very little cash and its only lifeline the planned bailout by its financier, SoftBank (OTCMKTS:SFTBY). WeWork has existed for less than 10 years, being born at the same time that the Federal Reserve started printing inordinate amounts of money, financing much of the smaller tech players in Silicon Valley that are being funded by firms that are at the trough of that spigot. WeWork had already spent the money it was expecting to raise through its IPO, but then when that didn’t happen the money quickly went dry, while its former CEO was given a golden parachute worth hundreds of millions of dollars. The firm is on pace to lose over $3 billion in 2019.
Facebook Linked With Low Grades
If you want to fail in school, post more stuff on Facebook (NASDAQ:FB), but only if you’re a below average student. Superior students are less effected by heavy social media use apparently, according to research published in Computers & Education. Students canvassed in the study spent an average of 2 hours on Facebook, and some more than 8 hours, which is pretty much the entire day. Those that spent more than three hours a day on the site scored 10% lower on exams than students at 2 hours or below. “It appears that for students with lower academic achievement, the use of social networking sites replaces study time, whereas high-achieving students are able to juggle both,” said the study’s lead author James Wakefield. He recommended turning off notification on phones, which kind of seems like a decent idea if you want to get things done.
Carl Icahn Wants Xerox-HP Merger
Carl Icahn, the billionaire investor who got Eldorado Resorts (NASDAQ:ERI) to buy Caesars (NASDAQ:CZR) this year, has shown his hand consisting of a $1.2 billion stake in HP (NYSE:HPQ) nad a 10.6% stake in Xerox (NYSE:XRX), and he wants the two companies to come together. Xerox has already made an offer to buy HP for $33 billion. Icahn, still very much at it at 83, believes the cost savings alone warrant an union, estimated by Xerox to by about $2 billion annually.
