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More Wins For Amazon Means More Wins For Everyone

By
Andy Parker
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Mozart in the Jungle

Amazon will be celebrating its Golden Globe-winning series “Mozart in the Jungle” in style. Amazon.com, Inc. (NASDAQ:AMZN) will be offering big discounts on Amazon Prime in a sort of celebration that will run from Friday 9.00pm through to Sunday 11.59 pm.

The two-day Prime membership sale will enable shoppers to ship tens of millions of items for free in addition to being able to access free TV shows, music and books which will come along with unlimited cloud storage of photos. The first two seasons of the comedy show will also be available for free streaming at no extra cost from the Amazon Instant Video app or a dedicated online link.

The series features the wild inner workings of the New York Symphony and won the Golden Globe Award for Best Musical Series. The award followed Best Actor in a Musical or Comedy Series for lead actor Gael Garcia Bernal. Last year, Amazon’s first season of “Transparent, Free” won two awards at the Golden Globes.

This is not the first time that Amazon is running a celebratory promotional discount. The same thing happened last year. It is now up to shoppers to respond to the weekend deal.

Amazon is now also looking forward to having Jim Jarmusch’s Paterson and Star Wars: The Force Awakens’ star Adam Driver make the company’s next original movie. At the same time, the Oscars are expected to increase Amazon’s propensity to give more discounts. What viewers should understand is that the more Amazon wins awards, the better the chances of getting good deals.

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GoPro Needs To Troubleshoot Its Camera Problems

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Hero4, Gopro

A small rebound in oil prices kept the Wall Street in the green yesterday, but unfortunately the brief jump did not translate to GoPro Inc (NASDAQ:GPRO), which was in freefall throughout the day. The stock dove down nearly 14.6% to close at $12.48. If that were not enough, shares continue to be in red by nearly 4% during the pre-market session.

What went wrong?

The real cause of problems centers around the company’s weak Hero4 Session camera sales. CEO Nick Woodman cited deep price cuts as the reason for the weak quarter. The company had set Hero4 Session at $400 in July but had cut the price to $199 in December to boost sales. Things did not work the way they were expected to as the company didn’t even meet the mid-point level of revenue guidance of $512 million, reporting fourth-quarter revenue at $435 million. That number is 20% far off mid-point guidance.

Concerns and support

In view of the difficulties GoPro announced a workforce reduction of 7%, which will eliminate roughly 100 jobs. Non-GAAP gross margin declined to 35% from the third quarter’s 47% level after factoring in returns, price cuts, excess inventory and retooling.

Following the release of the disappointing quarter, GoPro did garner some support from analysts who lent their words of advice to the camera maker. Alex Gauna of JMP Securities said that the company should bring a new camera to the shelves that is appropriately priced. The research firm maintains a ‘buy’ rating on the stock while Gauna sees sufficient resources available to the company to invest and recreate its technology and brand.

Some analysts are still optimistic that the company’s drone, which is yet to be released, will be its saving grace. Charles Anderson of Dougherty & Co. believes that the new drone can source $17 million in sales this year, maintaining a buy rating on the stock.

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Raytheon Merges with Websense, Rebrands To Forcepoint

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Raytheon Websense

In what is being seen as the formation of a strong new brand, Raytheon Company (NYSE: RTN) and Websense have merged, rebranding to what will now be known as Forcepoint. Raytheon spent $1.9 billion on the merger deal that took place back in May 2015. Raytheon-Websense also acquired network security vendor Stonesoft from Intel Corporation (NASDAQ:INTC), through a $389 million deal in what it explained to be an expansion of capabilities.

According to John McCormack, CEO of Forcepoint, a change is as good as a rest and having been in security for 20 years, McCormack confirms that modern security challenges require a broader approach, which the three entities are striving to achieve.

Recently, many companies have been struggling with the running of 25 to 50 different applications to tighten cybersecurity coverage. However, McCormack was quick to note that this was leading to the exhaustion of chief information security officers (CISOs), a challenge that Forcepoint is aiming to solve to unify an integrated platform.

As much as Forcepoint was formed to attend to the harder challenges of modern cyber-security, McCormack says that it will require billions of dollars of investment in order to deliver the integrated platform. Nevertheless, the new company has assured its local customers that it will be business as usual.

While letting go of the Websense brand was a slight diappointment, Forcepoint Asia-Pacific vice president of sales Maurizio Garavello said that their aim was to give the market a better product. McCormack backed up Garavello’s statement by adding that they want to form a roadmap for what they stand for, and that a stronger name epitomizes their vision.

Meanwhile, with the current competition in the security world of 2016, Forcepoint says it is ready to compete against Symantec Corporation (NASDAQ:SYMC) and Cisco Systems, Inc. (NASDAQ:CSCO), among others. Nonetheless, McCormack said that theirs will be a unique strategy in the industry. Forcepoint’s product portfolio will include various state-of-the-art technologies, hence the reason it is willing to spend billions on the investment. Shared synergies in multiple areas could benefit security intelligence.

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China Enters Bear Market, European Markets Extend Losses

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Markets extend losses

Friday was no different than the earlier sessions as both the Asian and European markets continued their southbound journey. Though the U.S. markets closed on a positive note, the falling oil prices and lack of encouraging news from China dominated the overall market sentiment.

State-induced measures see no result

Among the Asian markets, the Shanghai SE Composite Index recorded the biggest fall of 3.55% and settled at a level of 2,900.97, depicting a 21% fall from its December high. The better-than-expected Chinese trade readings did not help cheer the markets as investors concerns over the economy grew deeper. The Chinese stocks have entered the bear market territory for the second time in seven months as the government interventions appear to be ineffective in calming the nerves.

The fall is mainly driven by the new development reported by the International Finance News, which said that the Shanghai banks have decided not to accept shares of smaller companies listed on exchanges as collateral. The investors have read it as another sign of trouble in raising cash from equities, thus, sending the index down on the day.

Europe and the U.S.

Back in Europe, the major stock indices extended losses on the back of dwindling oil prices, China’s economic crisis and auto worries. France’s CAC 40 shed nearly 1.08%, followed by Europe’s Euronext 100 that was down by 0.94% to 837.32.

Meanwhile, the previous day rally in the U.S. markets was partially induced by a speech from St. Louis Federal Reserve President James Bullard, who said that the exception for U.S. inflation is falling, which is a point of concern. Analysts are breaking this speech into an indication that the rate hike by the Federal Reserve is much far than anticipated.

Oil retreated from its early day losses and was seen trading above $30 per barrel after dipping to a level below it. However, the price of Brent crude remains under pressure the entire day.

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Market Update Wall St. Bounces Back

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Stocks buying right now

Wall Street bounces back as the oil prices become stable

Wall Street saw a lot of upheavals but finally the S&P 500 reclaimed the 1900 key mark as the steadying oil prices brought new vitality to the energy companies. Fizzling of early technology stocks sale off also worked as a catalyst.

Anheuser-Busch InBev Issued $46 Billion Bond

Anheuser-Busch InBev issued bond of $46 billion, the second largest in the history. The brewing agent amassed $110 billion through investor orders for funding the acquisition of SABMiller, its rival.

The bond of seven-tranche was only a bit less than the $49 billion bond record of Verizon sale in 2013. With the demand swelling up, the market players had already anticipated that the deal would be closing beyond $40 billion. The global coordinators for the bond include Bank of America Merrill Lynch, Deutsche Bank and Barclays whereas Santander, Mitsubishi UFJ and Societe Generale are the joint book runners.

Market experts believe that the new deal can improve the tone of the market, as it was a bit shaky at the beginning of the year.

Slowdown in Apple’s iPhone sale cause of worry for TSMC

Taiwan Semiconductor Manufacturing Co. (TSMC) has expressed concern over the slowdown in the sale of Apple’s iPhone. With the speed of revenue generation, lowering unexpectedly, the iPhones chip manufacturer has forecasted that the first quarter revenue will slow down by 10.8% as compared to last year.

The Credit Suisse reports that the slowdown is due to weakness in demand for the high-end Smartphones. Apple is the highest buyer of the TSMC chips (20%), the largest contract chipmaker in the world.

European shares hit lowest in 13 months

Around 14 European equities hit the lowest in 13 months, with the automobile sector affected the worst. Shares of Renault reached all time low, an after effect of the inspections of its three sites in an emission investigation. The shares of the French carmaker declined by 10% the biggest index slump after its decline of 20% at the start of the day wiping its market value by billions of dollars.

The pan-European FTSEEurofirst 300 index slumped by 2.2% at 1,324.70 points hitting its lowest since December 2014 at 1309.70 points.

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AT&T Joins Apple In Attempt to buy Time Warner

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Stocks buying right now

AT&T Inc. (NYSE: T) today joined Apple Inc.(NASDAQ:AAPL) in vieing for the potential acqusitions of Time Warner Inc (NYSE:TWX). AT&T, which already owns DIRECTV, would add Time Warner to its media collection.

Time Warner chief executive officer Jeff Bewkes is against the sale saying that it would destroy the company’s value. Long-term investors are increasingly running out of patience with the company and may support either a breakup or sale.

Meanwhile, Apple is keeping close tabs on the potential sale of Time Warner. The purchase of Timer Warner would be a big move for Apple, kick starting its TV streaming services that are scheduled to be launched this year. Lately, Time Warner has come under immense pressure from its shareholder base to either spin off some assets or sell itself entirely. Time Warner shares are currently trading at $71, down from an $85 offer made last year by Twenty-First Century Fox Inc (NASDAQ:FOXA). and this among other reasons are inducing shareholders to pile pressure on Timer Warner.

 

Apple is expected to start its streaming services this year after last year’s negotiation went slow with TV networks. Apple could see an acquisition as a way of speeding up operations on that front.

Time Warner owns CNN, TBS, TNT, NBA TV, HBO, Cartoon Network and Warner Bros movies and TV shows. If Apple owns these, it would only have to negotiate with ABC, NBC, CBS, and Fox to kick off its operations in the space.

Apple already has Apple TV in its fourth user generation. Users have the chance the stream on demand content and major apps including MLM.TV and ESPN among others. Rumor has it that Apple is considering a package deal that is similar to SlingTV, an internet-based $20 per month TV package that has close to 20 major channels. Sony’s PlayStation Vue is another similar offering though it would be more expensive.

Though Apple has not yet confirmed the rumor, a source close to Apple stated that its senior vice president of Internet software is keeping close tabs. It will particularly interesting to see how a traditionally tight-focused company like Apple will handle running a Hollywood studio.

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Aeropostale Resorts To Cost Reduction To Beat Sluggish Business Woes

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aeropostale

Teen’s apparel retailer Aeropostale Inc (NYSE: ARO) continues to struggle with diminishing mall traffic and excessive competition, finally announcing its aggressive cost reduction plan.

Slashing jobs

The strategic move adopted by the company will axe 100 positions, representing 13% of its corporate headcount and helping it save anywhere in between $35 million to $40 million before taxes in fiscal 2016. The company anticipates its pre-tax cash expenses to amount $1.5 million during the fiscal year 2015.

Despite such an aggressive push, the retailer has kept its fourth-quarter outlook intact, implying the close of the fiscal year with further losses.

Over and above that, the company announced that its CEO, Julian R. Geiger, had voluntarily surrendered one million stock options, which will be utilised to retain key members of the company.

Continued efforts

Aeropostale has been unable to recover from the gloomy teen apparel retail environment. Consequently, it is staring at its third consecutive year of losses. Also, the company has to work towards regaining its compliance with the New York Stock Exchange. The current NYSE listing rules mandate the company to maintain the average closing price of its stock above $1 for 30 consecutive trading days and market capitalization above $50 million.

However, the company’s stock has not seen the $1 light since September 2015 while its market capitalization sunk below $20 million. It is believed that the company might resort to a reverse stock-split in order to meet compliance rules of NYSE, though that move would not help its market cap.

In the past, the company had undertaken both national and international expansions in a bid to counter slackening revenues. To this end, the company had signed licensing agreements to set its foot in markets such as Ireland, Indian, Egypt and Thailand, but these moves didn’t help its bottom line.

The stock is up 3.38% in early morning trading and ended the previous session at $0.245 per share.

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Apple and Alphabet Cannot Disrupt the Auto Industry, and Here’s Why

By
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Google

The tech world is adrift with rumors that Alphabet Inc (NASDAQ: GOOGL) and Apple Inc. (NASDAQ: AAPL) can meaningfully disrupt the auto industry. Although traditional tech wisdom does provide some support for this contention, it does not have any clear base. The word disruption is an overly used term, especially in connection with automakers.

Google and Apple, the two tech giants, have registered Google.car and Apple.car recently and ever since then the rumors of these two causing disruption in the auto industry are making rounds.

BMW executive dismantles the notion

With Apple tripling the size of its automotive development team, some of the automakers have already started tracking its progress. However, it seems that the big players in the business are not much worried. Bob Lutz, a former General Motors Co. (NYSE: GM) and BMW executive said on CNBC that Apple does not even have a fighting chance of making a small dent in the auto industry.

Firstly, the automobile is an integrated system that cannot be handed down like a Smartphone since all of its functions including code, safety systems, driver assist technologies, hardware, wiring and radar tools have to work in unison.

It will be difficult for Google or Apple to develop a team with such manufacturing expertise that has evolved through many years of experience and investment of skill, time and money. Google and Apple may have capital, but not so much the knowhow for mass production of large pieces of integrated hardware. Prototypes are one thing. Mass production and sale is entirely different.

Apple recently employed a group of Tesla Motors Inc. (NASDAQ: TSLA) engineers indicating its serious intentions but it would be foolhardy to compare that to the real plants and manufacturing units of the major automakers with years of legacy.

According to Elon Musk, Tesla’s CEO, it is impossible to use the same outsourcing model for the cars as used for iPhone and Android mobiles. Moreover, Google and car design do not sound like an intuitively good match. Apple can certainly design, but gadgets and cars are very different things.

 

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Netflix is the Amazon of Digital Streaming

By
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bluebird

 Netflix, Inc. (NASDAQ: NFLX) is a flywheel. It keeps spinning faster and faster. The pricing and the access consumers have could cement Netflix as a long term streaming king much like Amazon.com, Inc. (NASDAQ: AMZN) is king of online retail with little to no serious competitors.

Netflix is currently valued at $50 billion though its efforts to reinvent TV from the bottom up could multiply that market cap. Its daring move is similar to what Amazon did for retail. Netflix is taking far-reaching steps towards dominating digital streaming on a global level.

Over the last few years, Netflix has enjoyed substantial and consistent growth and now claims about 70 million subscribers who pay approximately $8 to $10 million per month. Amazon similarly has huge movie and TV libraries that customers have access to once they subscribe to their services. Last year Netflix was rated as the best performing of the S&P 500 index. It climbed 125% over the last year.

Recently, Netflix CEO Reed Hastings announced that his company would be available to every country in the world except China. This would double its potential market. Most analysts had anticipated that Netflix would roll out globally though most never thought the move would be carried out in one go. Market access to 130 countries is a similar scope to what Amazon has.

Netflix is sparing no expense to cement its business lead in streaming. The company is also gathering large amounts of market data concerning their users and habits.

When Amazon was rolling out globally in the late 90’s and early 2000’s, it primarily invested in warehousing while Netflix is investing in new content. Ted Sarandos, head of content acquisition, stated that Netflix is all set to produce 600 hours worth of original programs in 2016.

As Netflix gets more data and more money, it will have the opportunity to bring in more customers with ever wider market access. Netflix currently charges around 14 cents per hour which is quite favorable to the consumer as cable is between 25 to 30 cents per hour.

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Brent Oil Tests 12-year Lows, Recovers to $30 Per Barrel

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oil

Brent oil futures extended its losses to test a fresh low of below $30 a barrel. The level marks the

commodity’s new 12-year low today, further fuelling the global oversupply concerns. On London’s

ICE Futures Exchange, Brent oil for March delivery made a day’s low at $29.70, a barrel, a level last

seen in January 2004. However, the commodity futures recovered slightly to $30.44.

Analyst speak

Brent futures traded on London exchange have dropped 19% in 2016 on the back of worries that

the oil supply glut will continue to haunt for a longer time than anticipated. Also, the supply glut

situation can worsen if Iran will join the global oil market after being released from western

imposed sanctions. According to analysts, Iran has the capacity to add up to 500,000 barrels to the

oil production, which can further send the prices deep red.

Meanwhile, the world has been seeing global oil production outpacing the overall demand after

the supply ramped up in the U.S. shale oil combined with the decision of the Organisation of the

Petroleum Exporting Countries (OPEC) to continue with the existing production to maintain

market share, thereby ruling out any supply cut. If analysts are to be believed, then the supply

situation is set to worsen as oil production continues to accelerate in Saudi Arabia, North America

and Russia.

U.S. crude showing improvement

On the New York Mercantile Exchange (NYMEX), February crude oil was trading at $30.80, up

1.05%. The oil futures settled at $30.48, up by 4 cents during the previous trading session. A

weekly report issued by the U.S. Energy Information Administration showed a sharp rise in both

gasoline and distillate supplies over the last week, implying sluggish demand for oil.

U.S. crude has been showing some revival signs in comparison to Brent following the Congress’

recent decision to lift a ban on oil exports, signalling to improved oil market conditions in the

coming months.

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