QUOTE OF THE DAY
I felt like 15 or 16 years was plenty of time to be CEO." –– GE CEO Jeff Immelt on stepping down by the end of the year. We feel ya, Jeff. Go take a nap or something.
MARKET CORNER
Market Snapshot
- In another pitiful day for tech, the Nasdaq led all major U.S. indexes into the red.
- The Vix responded to the tech sell-off and finished up 7.10%.
- The dollar held steady ahead of Wednesday’s FOMC meeting.
Want Morning Brew Daily Served Fresh to Your Inbox?
Drop Your Email Below...
The Electric General
The century-old electricity company and only remaining blue chip from the original Dow Jones lineup is calling an audible on its 16-year CEO, Jeff Immelt.
GE (+3.58%) will now hand the reins over to John Flannery. This seemed to please investors as shares rose 3.6%.
But a slight spike in share price and a WSJ headline don’t do justice to a more than decade-long story, in which Jeff Immelt faced an uphill battle from the get-go.
Jeff Immelt: against all odds
2001—an overwhelming time to be a CEO to say the least.
Immelt was called up to the big leagues on the eve of the dotcom bubble burst in addition to an Enron scandal, which led to a drastically skewed public perception of GE-sized corporations.
If that wasn't enough, his first day in office was September 7, 2001.
The Harvard MBA and 36-year industry vet had every reason to consider cashing out and heading for Del Boca Vista.
Still, Immelt remained steadfast. Through a series of key divestitures in plastics, insurance and television, he refocused GE on its core business and breathed some much needed life back into the stock price.
Just in time for the 2008 recession...
And in perfect financial crisis fashion, the house that Jack built was as levered as the houses that caused the crisis.
As the story goes, banks failed, credit markets froze and GE found itself stuck with an unfortunate balance sheet. By 2009, despite all of Immelt’s trials and tribulations, GE’s stock plummeted 70% to an all-time low.
Since Immelt came into the picture, GE’s stock has dropped 30%, while the S&P has increased 124%. A stat even 16 hard-fought years can’t shake off.
Now batting: John Flannery.
It’s For the Kids
National children’s clothing brand Gymboree is filing for chapter 11—by far the most adorable bankruptcy ever.
We should have seen the writing on the wall. Gymboree missed its last debt payment just 12 days ago and recently faced a downgrade to its credit rating (from "CC" to “D”).
For now though, Gymboree and its 11,000 employees have been thrown a $308.5 million lifeline, while the 1,300-store chain looks to cut $900 million in debt by restructuring.
And if that doesn’t work, maybe closing 375 stores will. So keep paddlin’ Gymboree… it’s for the kids.
If You Ain’t First, You’re Last
The Drone Racing League is coming to unrestricted airspace near you, landing $20 million in Series B funding and making BattleBots feel like a thing of the past.
You might not be up to speed, but there are over 75 million fans in over 75 countries who are.
These high-speed, first person races probably won’t be stealing eyeballs from NASCAR or F1 any time soon, but with epic crashes and a slew of strategic investors, we wouldn’t sleep on the DRL.
And they’ve got the money to prove it. Revenue has been pouring in from networks like ESPN, DisneyXD and Amazon Prime Video, all of whom are looking to get in on the broadcasting action.
Let Me Upgrade You
Electronic Arts’ (-1.41%) highly anticipated new game, Star Wars Battlefront II, is taking a page out of Office Space’s script: microtransactions.
The game is attracting buzz ahead of this week’s Electronic Entertainment Expo (E3) and appears to be ushering in a changing of the guard.
EA is scrapping the "expansion pack" revenue model, which lets e-athletes (e-thletes?) pay to play additional missions and maps by replacing it with virtual in-game “goods" that make very real money.
This model is nothing new in the mobile gaming space and has proven to be successful in limited console use, netting FIFA $800 million from the sale of virtual performance enhancements.
What Else Is Happening…
- Tyson Foods (+0.86%) is recalling $2.5 billion pounds of chicken because of an "unlabeled allergen."
- McDonald’s (-1.99%) is looking to hire about 250,000 employees this summer via Snapchat.
- GE won antitrust approval to merge its oil and gas business with its peer, Baker Hughes.
- Amazon (-1.37%) is gearing up to become an online car dealer in Europe.
- U.S. banks are collaborating on Zelle, a mobile payments app, to compete with Venmo.
Economic Calendar
- Monday: No events today
- Tuesday: Producer Price Index
- Wednesday: Fed Rate Announcement, May Retail Sales, Consumer Price Index, Crude Inventories
- Thursday: Kroger Earnings; Industrial Production
- Friday: Michigan Consumer Sentiment Index
WATER COOLER
(E3) By the Numbers
You know how it goes at this point. This week, we’re tackling E3 ahead of this years three-day event. So put down the joystick and pop on the headset. Time for the numbers to do the talking…
At E3 2016
90—E3 exhibitors that had new products to show off last year.
2,300—The number of products shown, including 130 new games and hardware.
50,300—Gamers and industry professionals that attended the event.
7 million—Tweets related to E3 during the event.
42 million—Global gamers that watched exclusive E3 content on Twitch.
Here’s the takeaway: whether you consider yourself a "gamer" or not, there are more than enough to go around. And that’s why gaming’s biggest conference of the year is BIG and only getting bigger. No wonder the U.S. gaming industry took in $30.4 billion last year.
THE BREAKROOM
Interview Question of the Day
A man has 53 socks in his drawer: 21 identical blue, 15 identical black and 17 identical red. The lights are out and he is completely in the dark. How many socks must he take out to be 100% certain he has a pair of black socks?
(Answer)
Who Am I?
- I am only the third CEO in my company’s 38-year history.
- My predecessor is famous for his courtside dance moves.
- I credit much of my leadership ability to playing cricket in India.
- It was recently announced that I will be a featured speaker at the Geek Week Summit this fall.
- I finished in the top 7% of all March Madness brackets by using the predictive search algorithm I helped create.
-
(Got any guesses?)
Stat of the Day
$4 billion
The total number of donations made on GoFundMe across a network of 40 million benefactors.
I think the answer to your interview question is wrong. Seems to me that it should be 34, not 40.
Could you explain how you arrived at that answer?
Me too.
I'm interested to know how you came up with that answer.
I take that back, I solved for Blue socks, not black socks. 40 is correct.
.
They're not saying that Immelt is 16 years old, but rather he's been the CEO for 16 years. This is accurate
Et quia neque minima quia delectus accusantium sunt. Eius suscipit dolor voluptatem porro. Rem temporibus doloremque suscipit perferendis. Dolores recusandae rem et nesciunt incidunt deserunt quos amet.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...