Yahoo to Spin Off Core Business Instead of Alibaba Stake
Yahoo Inc. reversed course on Wednesday, caving in to shareholder opposition to its planned spinoff of shares in Alibaba Group Holding Ltd. Instead, the once-dominant Internet giant will package all of its Web assets into a new publicly traded company, as suggested by activist shareholder Starboard Value. Investors had expressed concern about the tax implications of the Alibaba divestiture, despite arguments from company leaders that the spinoff would be tax free for shareholders. The decision to shift focus is considered a major blow for Yahoo CEO Marissa Mayer, who was hired away from Google in 2012 to bring life back into the once-mighty Internet portal.
Seattle Great Wheel Hit By Drone
An unmanned drone crashed into the Seattle Great Wheel on Wednesday afternoon, though no damage occurred to the 175-foot tall Ferris Wheel. Police noted that no injuries occurred as a result of the drone, which fell to the ground after colliding with the wheel, crashing through a table. Police are investigating the incident, which took place about 4:45 PM, and it is unclear at this time who was controlling the drone. Police say that drone accidents are unusual in Seattle, but this is the second time one occurred this year. At Seattle's Pride Parade, during the summer, a drone flew into a downtown building, tumbling to the ground and striking a woman in the head. Police were able to identify the man controlling that drone, and he was charged with reckless endangerment for the incident.
Activision Blizzard Acquires King Digital
Activision Blizzard revealed Thursday it has agreed to acquire King Digital Entertainment, the Irish based maker of Candy Crush Saga, for the tidy sum of $5.9 billion. The purchase price works out to just about $18.00 per share, or a 20 percent premium over King Digital's closing price on Wednesday. The deal has already been approved by the board of directors at each company, but King Digital shareholders must still approve the sale. The deal must also gain approval of Irish regulators before the deal is finalized, which the companies hope to occur by next spring.
Initial Jobless Claims Hold Steady
The US Labor Department reported Thursday that initial unemployment claims held steady last week, fueling the sentiment that the Federal Reserve may raise interest rates next month. According to the report, initial claims came in at a seasonally adjusted 276,000 for the week ended November 7th, the same number of claims as there were in the previous week. Economists noted that the number is consistent with a stable labor sector, and could encourage the Fed to make a move on rates. Claims have now been below 300,000 for a staggering 36 weeks, and claims numbers are approaching levels not seen since the 1970s. The unemployment rate, meanwhile, has fallen to 5.0 percent, the lowest US jobless rate in more than 7 years. The Fed has held the benchmark overnight interest rate near zero since the end of 2008, and will discuss raising the rate at next month's policy meeting.
Angie's List Rebukes $512 Million Buyout Offer from InteractiveCorp
Angie's List shares jumped almost 12 percent in after-hours trading Wednesday after the company rebuked a $512 million buyout offer from InterActive Corp (IAC). The offer represented a 10 percent premium over Wednesday's closing price on Angie's shares. IAC made the offer public late in the day, saying it would also consider merging its HomeAdvisor platform with Angie's small business review business, creating a company that would bring in revenue exceeding $700 million. Executive leadership at Angie's has been under public pressure to consider the Home Advisor merger since October, when TSC Capital publicly suggested the union would give Angie's "the much-needed scale to compete successfully in the $300 billion home services market."
Joe's Crab Shack To Begin Testing No-Tipping Policy
Joe's Crab Shack this week began testing a no-tipping policy in 18 of its 130 restaurants across the country, paying servers a higher hourly rate, raising prices to compensate and removing the tip line from credit card receipts. The move makes the company the first national chain to test a no-tipping policy after a handful of smaller, local chains have tried the concept. Servers typically earn $2.13 per hour plus tips, but that federally-mandated minimum hasn't been increased since 1991. Most recently, New York-based Union Square Hospitality Group did away with tipping at its 13 New York eateries, including the Gramercy Tavern and Union Square Cafe. A spokesman for the company said that menu prices would increase about 20 percent as a result of the move.
World's Two Largest Brewers Agree to Merger
AB InBev revealed Wednesday it has agreed to pay $107 billion to acquire SABMiller in a deal that would merge the world's two largest beer makers. The combined company will produce nearly a third of the world's beer, causing antitrust concerns to regulators, especially in the US market. To ease those concerns, SABMiller has agreed to sell off its controlling stake in a venture with Molson Coors, including the rights to the Miller brand name. Molson Coors will pay $12 billion for the SABMiller stake, and will assume full control of daily operations of Miller Lite, Miller High Life, and other brands. A name for the combined company has not yet been determined.
Macy's Cuts Full-Year Forecast, Retail Sector Stocks Slide
Macy's Inc. reduced its full-year expectations on Wednesday, sending shockwaves of concern among investors over the crucial retail industry. Wednesday's move was the result of several factors, including a warmer-than-usual winter that hurt sales of heavy winter apparel. Macy's also revealed it would not create a real estate investment vehicle for its stores, alarming some investors and causing shares of the company to lose 14 percent of their value on the day. The concern filtered over to other retailers, as Urban Outfitters lost 7.4 percent on Wednesday, and Michael Kors and Fossil each lost more than 4 percent.
Alibaba Breaks Singles' Day Sales Record
Alibaba reported Wednesday that it has broken the Singles' Day sales record thanks to clever marketing and the use of several Hollywood celebrities to promote the event. The company said it generated 91.2 million yuan ($14.3 billion) on the day invented as China's answer to Valentine's Day. Top-sellers included Nike shoes, Levi's Jeans and baby-related products, which helped the company surpass last year's sales record of $9.3 billion by the middle of the day. The company went to drastic measures to boost sales for Singles' Day 2015, moving the event headquarters to Beijing and bringing in celebrities like James Bond star Daniel Craig and Kevin Spacey to take part in a four-hour variety show promoting the event.
Kroger Acquires Chicago Grocery Chain
The nation's biggest supermarket chain got bigger Wednesday as the Kroger Co. agreed to purchase a Chicago area grocery chain named Roundy's, which operates 34 Mariano's grocery stores. The purchase price of $800 million, or $3.60 a share, represents a healthy 65 percent premium over Tuesday's close, when Roundy's shares were trading at $2.19 per share. According to a press release, the boards of directors at Roundy's and Cincinnati-based Kroger have already approved the merger. In a statement, Roundy's chairman Bob Mariano lauded the merger with Kroger, calling it a “great win for our customers, communities, employees and our shareholders.” Marianio's stores will be run as a Kroger subsidiary, lead by senior members of Roundy's management team. No store closings are expected to result from the merger.