There Was A Lot of Hoot This Week…
Its been a busy week: Giants v. Cardinals, then Orioles v. Royals, then Giants v. Cardinals…
Luckily you have us to catch you up on the other events of this week.
Netflix’s (NFLX) stock tanked Wednesday, losing 25% of its market value after an earnings call where CEO Reed Hastings announced that the digital media company saw soft growth in Q3. The company admitted that they over-estimated growth potential, seeing only 3 million new subscribers (Give us more Frank! We need more Frank!). The disappointing numbers are likely due to an increase in subscription price Netflix enforced this year. Unfortunately for Netflix, the going will only get harder for the company: HBO also announced Wednesday that it would enter the online media streaming business. Its stand-alone service will directly compete with Netflix.
We’re starting to wonder if the board of Deutsche Telekom AG (DTEGY) is filled with a crop of stubborn men. Why? Because they continue to reject other telecom companies’ bids to purchase its majority stake in T-Mobile (TMUS). Deutsche Telekom AG owns a controlling stake in T-Mobile, which it has been seeking to sell for close to a year. In early August the German company rejected an offer from SoftBank (9984) and Sprint (S) for the US company. Deutsche Telekom rejected the offer on grounds of antitrust risk. This week French telecom company Iliad SA dropped plans to acquire a controlling stake in T-Mobile, after a 4-month courtship and several proposals failed to woo Deutsche Telekom (even Marie Antoinette didn’t get that much serenading). Iliad SA just couldn’t offer those Germans enough cash for the transaction.
It is true. Poodles can be deceptively aggressive, which might be why Google (GOOG) named the security loophole it recently discovered, POODLE, after the oddly manicured K9. The tech behemoth explained that the loophole could enable hackers to access user accounts without a password by exploiting their cookies. Users should be aware of attacks in places that offer open wifi, like Starbucks. While Google stated that they do not believe the loophole has been used, the revelation comes on top of a series of announcements from major US corporations about hackers stealing consumer information. The FBI issued a warning Thursday stating it believes the Chinese government is sponsoring the cyberattacks against US corporations.
Third quarter earnings reports rolled in this week for most public US companies. Following the reports, the stock market tanked. The plummet indicates that the economy, unfortunately, is still not as strong as we thought. One big stroke of “blah” across the economy continues to be the banking sector where growth remains flat. While there were a couple of stunners in the mix, overall the sector continues to bumble along, strapped by legal fees, necessary consolidations, and adjustments to new regulations. Citibank (C) and Goldman Sachs (GS) both posted stronger than expected returns, while analysts had mixed views on the reports from JP Morgan Chase (JPM), Wells Fargo (WFC) and Bank of America (BAC). Citi, JPM and BofA all cited steep legal fees on their balance sheets, saying they needed to hoard away cash to pay their brothers at the law firms (…we know who’s bringing the turkey home this Thanksgiving).
Several retail giants started ramping up hiring in anticipation of strong holiday sales projections. Amazon (AMZN) is set to hire 80,000 additional elves for the season, marking a 14% increase from last year (but a smaller increase than during the 2012 and 2013 seasons, when it grew its workforce by 40%). Kohl’s (KSS) and Macy’s (M) also reported intentions to increase their seasonal hiring targets. However, some toy shops aren’t seeing the same growth. eBay (EBAY), which trimmed its revenue forecast for 2014 this week, will likely not increase hiring volume. Walmart (WMT) also revised down its holiday season sales projections.
Follow the companies mentioned in this blog post on Owler:
Netflix | HBO | Deutsche Telekom | T-Mobile | SoftBank | Sprint | Google | Citibank | Goldman Sachs | JP Morgan Chase | Wells Fargo | Bank of America | Amazon | Kohl’s | Macy’s | eBay | Walmart