QUOTE OF THE DAY
“Bubble basket”—Hedge fund manager David Einhorn on the technology stocks he thinks are accidents waiting to happen. On top of the list? Tesla.
MARKET CORNER
Market Snapshot
- The Nasdaq closed north of 6,000 for the first time ever as positive earnings reports poured in. Investors are eagerly awaiting President Trump’s tax plan, set for release today.
- A new U.S. tariff on imported lumber sent the Canadian dollar slightly down. The euro rose again to its highest level in five months.
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Marissa Mayer’s Golden Parachute
Yahoo (+0.52%) CEO Marissa Mayer is set to receive a massive payout of almost $200 million (aka a golden parachute) once the company’s sale to Verizon is complete—much larger than the previously reported $23 million. Much, much larger.
It’s surprising, considering Yahoo used to be an industry leader (emphasis on "used to"), but some pretty massive blunders during Mayer’s five-year tenure have taken their toll. Managerial missteps like lavish parties and overdue spending cuts have hampered the 22-year-old company’s turnaround.
Wow—how often does this happen?
Large severance packages have made headlines left and right. Fox News’ Bill O'Reilly and ex-Wells Fargo CEO John Stumpf made off with $25 million and $133 million respectively in recent months.
Marissa Mayer did forgo her bonus after news of massive data breaches came out, but she still owns over 7 million units of Yahoo stock. Depending on the stock’s price ($48.40 as of yesterday) that $200 million is easy money. Not too shabby.
So why do golden parachutes exist?
Three decades ago, hostile takeovers were an everyday occurrence, so companies began adopting golden parachute clauses to incentivize CEOs to stick around after a buyout, or at least depart in style. By 1986, roughly a third of the 250 largest American companies had implemented them.
In recent years, though, we tend to hear more about golden parachutes going to execs who resign or are fired, instead. Mayer’s case is tricky because it technically involves both… Either way, it’s not a bad way to bow out.
Shareholders will vote on Mayer’s compensation package, as well as the $4.5 billion Verizon sale, in June. Both are likely to pass with flying colors… barring any more hacks.
Two American Classics—Two Very Different Quarters
What’s more American than a Big Mac washed down with an ice-cold Coca-Cola? Not much. McDonald’s (+5.57%) all-day breakfast and new restaurant format once again helped the fast food chain reach better-than-expected results on Tuesday. Looks like Mac Jr. and Grand Mac are hits after all.
But Coca-Cola's (-0.39%) didn’t go down quite as well. The soft drink maker’s profits plunged 20% as consumer tastes change to healthier options, with bottled water sales passing soda this year. CEO Muhtar Kent said struggles in Latin America were to blame, and plans to stomach the losses by selling some company-owned bottling facilities. Despite the setback, Kent says the company is still on track to have a solid year—possibly due to Warren Buffet’s can-modelling? You tell us.
Third Time's the Charm
Dole Foods, the company behind everybody’s favorite fruit cups, is going public for the third time in its 166-year history. The U.S. fruit and vegetable producer was taken private in 2013 to remedy profit struggles, volatile demand and low banana prices (only in the food industry do banana prices bring a multinational to its knees).
Since getting beaten to a pulp, Dole has cleaned up its act by cutting costs and diversifying product lines. It’s also now growing fresh produce as a health-conscious wave sweeps America. The time is ripe for change.
Uber vs. Everyone
Uber has been scrambling to get its affairs back in order, and smaller competitors are seizing the moment. Taxi-hailing service Gett is in the midst of acquiring its peer Juno––a deal that could put the merged company head-to-head with Lyft and provide enough scale to take on Uber in hot markets like New York.
Uber definitely isn’t going down without a fight, though. Want proof? Yesterday, Uber’s product chief announced plans to test flying taxis by 2020. We’re holding you to that, Uber.
What Else Is Happening…
- The SEC will review its rejection of the Winkelvoss’ (Winkelvi?) Bitcoin ETF listing earlier this year
- Google is changing its search algorithms to help avoid false news stories and scams
- J. Crew will cut 150 jobs at its corporate headquarters as sales continue to fall
- Wells Fargo’s (+1.70%) first shareholder meeting post-scandal was interrupted by protesters
Economic Calendar
- Monday: Halliburton (+), T-Mobile (+) Earnings
- Tuesday: 3M (+), AT&T (+/-), Chipotle (+), Coca-Cola (-), JetBlue (+), Lockheed Martin (+/-), McDonalds (+), Texas Instruments (+), Xerox (-) Earnings; Consumer Confidence (-), New Home Sales (+)
- Wednesday: Alaska Air, Boeing, Boston Beer, Hershey’s, Norfolk Southern, PepsiCo, Procter & Gamble, Twitter Earnings
- Thursday: Alphabet, Amazon, American Airlines, Comcast, Domino’s, Dow Chemical, Expedia, GoPro, Microsoft, Southwest Airlines, Starbucks, Under Armour, Union Pacific Earnings; Weekly Jobless Claims
- Friday: Morningstar, Steve Madden Earnings; GDP
WATER COOLER
No Ivy Degree? No Problem
Silicon Valley is hiring from top universities, but maybe not the ones you would expect. New data show tech companies hired more graduates from non-Ivy universities than Ivies. In fact, an Ivy League school doesn’t even show up until 15th on the list (looking at you, Cornell). Here’s what else the report covers:
- Ivy League alumni may not dominate the tech scene because Silicon Valley loves to hire from its own backyard. UC Berkeley and Stanford top the list, with Pittsburgh’s Carnegie Mellon coming in third.
- Graduates were most likely to accept jobs as a software engineer (no surprises there), followed by project manager and account manager. Gotta do more than just engineering, after all.
- In-demand skills are constantly in flux, but Python topped Java this year as hiring managers’ most desired skill, followed by Linux and cloud computing.
THE BREAKROOM
Interview Question of the Day
What is the sum of all numbers from 1 to 100? (Answer)
Startup of the Day
It’s not everyday that you have the opportunity to disrupt a multi-billion dollar industry. But, that’s just what sleep startup Casper is doing. It turned the $14 billion mattress industry on its head, and hit more than $100 million in cumulative sales in the process.
Their value prop? Simple. Produce one high quality mattress at an affordable price, offer a 100-day trial period and ship for free. Nothing fancy, but it makes a world of difference. Time for you to check ‘em out.
Stat of the Day
$150,000—That’s at least how much enthusiastic livestream watchers donated to a zoo in upstate New York as they eagerly awaited the birth of a baby giraffe. Good news: the feed is back up, and you can vote on the calf’s name (Giraffe-y McGiraffe-face, anyone?)
