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Smart for Life Stock is Not a Smart Buy: Target for Short Sellers 2024-05-30 14:42:00+00:00 - Key Points Smart for Life is surging after completing restructuring, but the news is not enough to keep the stock price up. Smart for Life may not retain its NASDAQ listing and faces numerous headwinds for the business. A short-squeeze is in play, but the downtrend is unlikely to end soon. 5 stocks we like better than Smart for Life Smart for Life NASDAQ: SMFL shares are surging and could continue to increase, but there is no good reason to buy them unless you are a short-seller closing out a position and getting ready to reposition for the next leg lower. The news surrounding this penny stock is a bottomless pit of reasons to sell, including a few notices from NASDAQ. Get Smart for Life alerts: Sign Up Smart for Life is in a Downward Spiral Smart for Life has been in the crosshairs for years. Not only was the IPO overblown, issued at the peak of pantry-hoarding and inflationary pressure, but it was set up to fail. The IPO was sold in units that included warrants that put a cap on any upward movement and opened the door to significant dilution. Since then, the stock has plunged as close to 100% as a stock can due to reverse stock splits and the dilutive impact of share sales. The last report filed with the SEC is for Q4 2023, including a 930X increase in shares issued. Smart for Life Today SMFL Smart for Life $5.97 +2.06 (+52.69%) 52-Week Range $2.27 ▼ $90.71 Add to Watchlist Why is NASDAQ sending notices to Smart for Life? For numerous reasons. The surge in the stock price was sparked by an 8-K current report outlining the shortcomings. They include failing to file a year-end report for 2023, failing to file a Q1 report for 2024, not holding an annual meeting in 2023, and a persistently low stock price. The company has completed its turnaround plan and restructuring, but there is no guarantee it will retain its listing, let alone remain solvent. The best news in the 8-K is the company’s balance sheet. Including the impacts of restructuring and repositioning efforts, the company estimates shareholder equity at $2.5 to $6 million—enough to get the market’s attention but insufficient to alter the outlook. The last filing is not promising; revenue fell about 30% YOY, executive compensation is 75% of the net, and the operating loss is significantly larger than revenue. The balance sheet may have some equity, but how much is relative to what the company has lost? It is the real question, and it is a small figure. Market Support Exists for Smart for Life: Don’t Count on it To Keep Shares Up There is some market support for Smart for Life, a consumer staple stock, but not much. No analysts rate this stock, but a few institutions hold it. The latest data shows five holders commanding about 8% of the stock. Those include UBS Group, BNP Paribas, and Buckingham Strategic Wealth. Buckingham Strategic Wealth is a fiduciary, evidence-driven wealth advisor using peer-reviewed research to guide its decisions. Insiders are listed as 30% owners, but this data may be faulty. Marketbeat.com tracks no insider activity since the IPO and only a single large sale by early investors. That was by Trilogy Capital Group late in 2022, shortly after the IPO. Short-Covering is in Play for Smart-for-Life Short-covering is in play with this stock. The latest short-interest data shows interest running hot near 15% and down 50% from the prior month. This activity helped put the bottom in the market ahead of the 8-K filing and set it up for short-squeeze, which is happening now. However, the squeeze put the market back to an attractive selling level, which is seen in the charts. It is likely that short-sellers are leaning into this pop and will drive the market back to its lows near $2.86 or lower. At this point, the best that investors might expect is for the company’s assets to be bought out, and the benefit of that is dubious. Before you consider Smart for Life, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Smart for Life wasn't on the list. While Smart for Life currently has a "hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
AMC Entertainment: Time to Take Step Back Into This Meme Stock? 2024-05-30 14:20:00+00:00 - Key Points AMC Entertainment is the world’s largest movie theater operator and is still trying to turn a profit. AMC stock rallied over 300% at the end of May, driven by the brief meme stock resurgence. AMC raised $250 million in proceeds, selling 73.5 million shares at an average of $3.45 during the rally. 5 stocks we like better than AMC Entertainment The world's largest cinema operator, AMC Entertainment Holdings Inc. NYSE: AMC, has already had a rollercoaster year, spiking over 300% in a matter of days in May 2024. The meme stock resurgence led by GameStop Co. NYSE: GME quickly came and went. AMC shares have fallen back down to support levels in the $4s. Is it time to step back into this meme stock as an investment? While this consumer discretionary sector company competes with movie theater stocks like Cinemark Holdings Inc. NYSE: CNK and IMAX Co. NYSE: IMAX, it also moved with meme stocks like GameStop, Blackberry Inc. NYSE: BB and Koss Co. NASDAQ: KOSS. Get AMC Entertainment alerts: Sign Up AMC Entertainment's Long Road to Recovery AMC Entertainment Today AMC AMC Entertainment $4.23 -0.27 (-6.00%) 52-Week Range $2.38 ▼ $62.30 Price Target $5.54 Add to Watchlist The COVID-19 pandemic crushed the motion picture business as studios like The Walt Disney Co. NYSE: DIS, Paramount Global NASDAQ: PARA and Warner Bros. Discovery Inc. NASDAQ: WBD experienced major production cancellations. Their migration to streaming significantly impacted movie theater chains causing many of the smaller ones to close shop permanently. With the help of the meme stock mania, AMC was able to raise funding to continue to be one of the last chains standing. The company had to go through major dilution and debt burdens to stay afloat but has yet to turn a profit. Daily Ascending Triangle Pattern Failing on AMC Stock AMC displays a daily ascending triangle pattern that appears to be starting to break down. The ascending trendline formed at $ 4.32 on May 20, 2024. This was the bottom after shares peaked at $11.88 and collapsed. The flat-top resistance at $5.37 was able to cap bounce attempts as shares started to break down under the ascending trendline at $4.80. The daily relative strength index (RSI) has been flat but may also be starting to slip to the 50-band. Pullback support levels are at $4.32, $3.59, $2.84 and $2.38. AMC's Q1 Revenues Beat Estimates, Losses Lower Than Expected AMC reported a Q1 2024 EPS loss of 62 cents, 13 cents better than consensus estimates for a loss of 75 cents. Net loss improved to $163.5 million compared to $235.5 million in the year-ago period. Adjusted EPS net loss improved from $1.71 to 62 cents from a year-ago period. Adjusted EBITDA was a loss of $31.6 million compared to a profit of $7.1 million in the year-ago period. That profit came from the benefits of an early terminated lease last year. The company used net cash of $188.3 million for operating activities with a balance of $624.2 million in cash and cash equivalents at the end of the quarter. AMC's Effective Strategies for Reducing Debt Levels The company reduced its debt load by $17.5 million in the quarter by exchanging 2.5 million common shares. Since Jan. 1, 2022, AMC has reduced the principal balance of debt and deferred rent by over $974 million. The company has also raised an additional $124.1 million in gross proceeds from the sale of 38.5 million shares since the end of Q1 2024. The company was also able to negotiate a private exchange of 23,280,295 shares of class A stock in exchange for $163.85 million aggregate principal amount of its 10%/12% Cash/PIK Toggle Second Lien Subordinated Notes due 2026, valuing shares at $7.33 per share. AMC Capitalizes on Meme Rally, Raises $250 Million in Equity On May 13, 2024, AMC raised $250 million of new equity capital by selling 72.5 million shares at an average price of $3.45 per share, before commissions and fees. The following day, AMC shares gapped up to $11.88 and sold for the next three days to $4.50. AMC Entertainment's CEO Sees the Glass Half-Full AMC Entertainment CEO Adam Aron remained upbeat as moviegoing bounced back in March 2024. However, he cautioned that last year's Hollywood strikes will affect the Q2 2024 box office numbers. However, the second half of 2024 and through 2025 have a strong upcoming film lineup. Aron pointed out that its surging revenues per patron and surging profit per patron numbers put AMC on a path to hit pre-pandemic EBITDA levels and even more so if the movie industry recovers. Aron commented, “Moviegoer sentiment is clear. Guests want to see movies on a huge silver screen, and they are consistently willing to pay more for the best possible experience. That certainly favors AMC as we have more premium large format screens, namely IMAX, Dolby Cinema and Prime, than any other cinema operator in the world.” Aron concluded, “Consumers are also paying up for innovative food and beverage offerings and AMC continues to outsell all our major competitors in F&B. All moviegoers also are now buying movie-themed merchandise from us, online, and in our concession stands in quantities that we have never before seen.” AMC Entertainment analyst ratings and price targets are on MarketBeat. Before you consider AMC Entertainment, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and AMC Entertainment wasn't on the list. While AMC Entertainment currently has a "hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
There’s a Program to Cancel Private Student Debt. Most Don’t Know About It. 2024-05-30 14:00:12+00:00 - More than a million borrowers who were defrauded by for-profit schools have had billions of dollars in federal student loans eliminated through a government aid program. But people with private loans have generally been excluded from any relief — until recently. Navient, a large owner of private student loan debt, has created, but not publicized, a program that allows borrowers to apply to have their loans forgiven. Some who succeeded have jubilantly shared their stories in chat groups and other forums. “I cried, a lot,” said Danielle Maynard, who recently received notice from Navient that nearly $40,000 in private loans she owed for her studies at the New England Institute of Art in Brookline, Mass., would be wiped out. Navient, based in Wilmington, Del., has not publicized the discharge program that helped Ms. Maynard. Other borrowers have complained on social media about difficulties getting an application form. When asked about the program and the criticisms, a company spokesman said, “Borrowers may contact us at any time, and our advocates can assist.”
‘Genuinely a con’: Lego enthusiasts bemoan half-empty room at Birmingham NEC event 2024-05-30 13:53:00+00:00 - An event advertised as the “UK’s biggest Lego festival” has been called a “complete rip-off” by attendees who described it as a half-empty room with piles of bricks. Brick Fest Live, which took place at the NEC in Birmingham over the bank holiday weekend, was promoted by organisers as “the world’s largest hands-on Lego event” with more than a million bricks on display. It promised that “children and adults will be amazed by lifesize Lego models”, and visitors would be able to visit a “marketplace where avid builders will be able to find rare collectibles not available anywhere else”. But images of the event showed large open spaces in a hall containing one gift shop, an inflatable slide, a colouring-in area and tables with piles of Lego bricks. There were also some large Lego builds, including a throne and some Pokémon characters, and an area where people could contribute a Lego build to a large mosaic. Visitors described the event as “rubbish” and compared it to the Willy Wonka experience in Glasgow, which was supposed to be an “immersive experience” but left children in tears when they arrived at a sparsely decorated warehouse with plastic props. View image in fullscreen Visitors to Brick Fest Live complained that the hall was half empty. Photograph: Maureen Halsey/SWNS One mother who attended Brick Fest Live told BirminghamLive: “It’s as bad as that Willy Wonka experience in Scotland, hardly anything there, both of my kids were so disappointed. I heard some people making official complaints. “We thought it would be a nice treat for the half-term, we all left so disappointed. It was terrible.” After previously running in Milton Keynes and Edinburgh, Brick Fest Live was at the Birmingham NEC from 25-27 May, with tickets starting from £20. One couple, who are Lego creators and run a YouTube channel called Block Party, said they paid £40 each for VIP tickets for the event. Kevin Chapman said in a video called “Brick Fest Live at NEC Birmingham: Complete Rip-Off!” on their channel: “I can’t believe we’ve spent £80 to be here for this. We’ve been to bigger ones in primary school sports halls.” He added: “How they can call it the largest one in the UK – are they defining that on the fact it’s the biggest room? Even though it’s basically empty. This is genuinely a con. I just want to protect other people from wasting their money and coming here.” He criticised the event for featuring no independent traders or Lego builds, and said it felt like it was mainly geared towards children even though it was advertised as being for “children and adults”. “A quarter of the room is just empty tables and piles of bulk Lego,” he said. “They can’t call themselves the UK’s biggest brick festival because there’s nothing here. This is rubbish.” One comment under his video read: “Drove from Sheffield with my 10-year-old who was so excited to see rare Lego, custom mini-figs etc. Could’ve cried for him when we had walked around the whole thing and he asked but where the Lego stalls. “Hopefully we all get refunds because they shouldn’t be allowed to get away with this blatant false advertising.” Brick Fest Live, which has no connection with Lego Group, said in a statement: “In the last month, there have been tens of thousands of guests that have been through this event in Edinburgh and Milton Keynes, with children and families taking part in this interactive, hands-on festival. “Where many have given us positive feedback, we are aware that Brick Fest Live is potentially not delivering for adult-level enthusiasts. We’re reading all customer feedback and dealing with comments.” The NEC has been contacted for comment.
Why American Airlines’ Plunge Is a Golden Buying Opportunity 2024-05-30 13:46:00+00:00 - Key Points Shares of American Airlines had a tough day on Wednesday after lowering forward guidance. However, one analyst still sees a 50% upside from where shares closed last night. Technically, there are also several reasons to support the buy argument. 5 stocks we like better than American Airlines Group A 13% drop in a single session is the stuff of nightmares for most companies, and American Airlines Group Inc NASDAQ: AAL is no different. That happened in Wednesday’s session, as the major carrier gave up effectively all its gains since last November. For context, at one point in March, American Airlines' shares had logged close to 50%, but they’ve struggled since then, and yesterday’s drop will have caused further damage to investors’ confidence. The catalyst for the plunge was a bearish update from the company itself, as they lowered forward guidance for Q2 adjusted EPS. With it now expected to land somewhere between $1.00 and $1.15, it was well below the $1.27 consensus estimate. However, the negative news didn’t stop there. Get AAL alerts: Sign Up American Airlines: Tightening Margins American Airlines Group Today AAL American Airlines Group $11.44 -0.18 (-1.55%) 52-Week Range $10.86 ▼ $19.08 P/E Ratio 19.07 Price Target $16.93 Add to Watchlist American Airlines’ margins are also set to tighten. Q2’s adjusted operating margin is now forecasted to be between 8.5% and 10.5%, well off the previously forecasted range of 9.5% to 11.5%. While the company’s total revenue per available seat mile (TRASM), a key metric for the airline industry, had been expected to fall between 1% and 3%, the expected drop here is now forecasted as between 5% and 6%. It was a bad update, and it was the last thing a stock struggling to catch a break this year needed. While American Airlines' shares managed to rally into the close and finish well above their low of the day, they still came within $0.50 of last year’s multi-year low. Around the $10.90 mark, this support line was, and maybe still is, the only thing standing between American Airlines’ shares and their lowest prices from the COVID pandemic. Bullish Outlook for American Airlines But it’s not all doom and gloom, especially for those on the sidelines who love a bargain. Despite the lowered guidance and plunging stock, there are reasons to think this could be a solid buying opportunity. Consider that in the aftermath of yesterday’s update, the team over at TD Cowen immediately reiterated their Buy rating on American Airlines’ shares. Sure, they lowered their price target from $18 to $16, but from where the stock closed on Wednesday evening, that’s still pointing to a targeted upside of some 40%. That’s not an upside to be sniffed at. Those of us thinking about getting involved will certainly need an iron stomach, as there’s a fair bit of risk, but accordingly, there’s a fair bit of potential reward. Backing up the entry opportunity thesis is the fact that American Airlines stock has a solid level of support around the $10.90 mark. Technical Support This is where the bears ran out of steam last year during the 60% plunge, and it’s fair to expect the bulls to put up a big fight if shares dip down there again. This level was tested several times in 2020, as the stock started its long recovery rally. It held each time, which adds weight to the theory that it will hold again this time. Don’t forget, it was only last month that American Airlines issued strong full-year profit guidance. American Airlines Group Inc. (AAL) Price Chart for Thursday, May, 30, 2024 Technically, there are signs that American Airlines is very undervalued right now. The stock’s 25% plunge over the past two weeks has sent American Airlines' relative strength index (RSI) down to 24, indicating extremely oversold conditions. While those considering a position must take yesterday’s lowered guidance seriously, there’s a compelling opportunity available now that may not last much longer. Before you consider American Airlines Group, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and American Airlines Group wasn't on the list. While American Airlines Group currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Buy Alert: A Chronically Undervalued Cruise Stock with 50% Upside 2024-05-30 13:30:00+00:00 - Key Points Shares of Norwegian Cruise have been struggling this month following a lackluster earnings report. However, they just raised their forward guidance, and multiple analysts call for up to 50% upside. Things should get interesting if the bears cannot take shares lower before the weekend. 5 stocks we like better than Norwegian Cruise Line It’s been an unusual month for shares of Norwegian Cruise Line Holdings Ltd NYSE: NCLH. Despite beating analyst expectations for its earnings at the start of the month and logging its highest number of bookings ever, the stock gave up all the gains it had made since December. Considering that by the end of March, shares of Norwegian Cruise had gained more than 70% since November, it was a worrying turn of events for investors. It appears as though the culprits in their Q1 numbers earlier this month were a slight miss on topline revenue and lighter-than-expected forward guidance. This latter point, in particular, tends to spook investors more than anything else. While a stock’s past performance plays a large role in the direction it takes, it’s really a stock’s expected future performance that determines if it flies or sinks. Get Norwegian Cruise Line alerts: Sign Up Bullish Signals Emerge as Norwegian Cruise Line Stabilizes Norwegian Cruise Line Today NCLH Norwegian Cruise Line $16.45 -0.04 (-0.24%) 52-Week Range $12.70 ▼ $22.75 P/E Ratio 23.50 Price Target $21.25 Add to Watchlist So, with the company setting more conservative guidance than expected, despite indications that it would be another quarter of record bookings, investors naturally headed for the exit. However, while the stock set dipped significantly the days after the report, it hasn’t gone below the low it set on May 8th. If anything, the sideways action that’s been happening suggests that Norwegian shares are consolidating, and the bulls could soon be back in control. This theory is backed up by several analysts who, in the past few weeks, have been calling this dip in Norwegian Cruise shares a serious buying opportunity. Take Mizuho and Truist Financial, for example. Earlier this week, both firms upgraded their rating on the stock from Neutral to Buy and increased their price targets. Analysts Predict Significant Upside for Norwegian Cruise Line Stock Truist is looking for Norwegian shares to get to $21, while Mizuho is targeting $24. Considering the stock closed below $17 on Wednesday night, that’s suggesting an immediate upside of some 40%. Going even further than Mizuho was the team at Stifel Nicolaus, who last week reiterated their Buy rating and boosted their price target to $26, pointing to an upside of more than 50%. The common themes driving this positive outlook reflect a growing bullish sentiment around Norwegian’s stock. A favorable industry supply backdrop, with only a small increase expected this year, should be a tailwind to their earnings. At the same time, the company’s cost control measures seem to be having the desired effect. There’s also the fact that, as we reported on Monday, Norwegian has just raised its EPS guidance for Q2. Getting Involved: Investment Opportunities in Norwegian Cruise Line Norwegian Cruise Line MarketRank™ Stock Analysis Overall MarketRank™ 4.90 out of 5 Analyst Rating Hold Upside/Downside 29.3% Upside Short Interest Healthy Dividend Strength N/A Sustainability -4.45 News Sentiment 0.65 Insider Trading N/A Projected Earnings Growth 29.20% See Full Details Looking beyond these analysts' all-out Buy ratings and bullish price targets, even the analysts with a Neutral rating on Norwegian believe it is significantly undervalued. On Tuesday of this week, the Goldman Sachs team reiterated their Neutral stance on Norwegian shares while upping their price target from $19 to $21. Considering that’s suggesting the stock is due a rally of close to 30%, it’s a wonder they didn’t make it an all-out Buy rating. It was a similar story with Citigroup, who maintained a Neutral outlook last week while increasing their target to $19. There’s just no getting away from the sense that Norwegian is extremely undervalued at its current share price of $16.50. Last week, the stock tried and failed to set a fresh low, which could well have been the bear’s final effort. If they have indeed thrown in the towel, then the upside potential could soon start to be realized. The fact that the stock closed near its high of the day on Wednesday bodes well for its prospects ahead of the weekend, and investors should be ready to pounce if it shows signs of closing above last week’s high of $17.40. Before you consider Norwegian Cruise Line, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Norwegian Cruise Line wasn't on the list. While Norwegian Cruise Line currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Live Updates: Trump Guilty on All Counts in Hush-Money Case 2024-05-30 13:05:22+00:00 - With Donald J. Trump’s unprecedented felony conviction on Thursday, what has long been a remote and abstract concept could move closer to a stunning reality: a former president of the United States behind bars. But that wouldn’t happen fast. A jury in Manhattan convicted Mr. Trump of 34 counts of falsifying business records in the first degree, a crime that under New York State law carries a possible sentence that ranges from probation to four years in prison. But Mr. Trump is no ordinary defendant. And while most experts think a prison sentence is unlikely, the judge in the case, Juan M. Merchan, has made it known that he takes white-collar crime seriously. The judge set sentencing for July 11. If Justice Merchan hands down a punishment that lands the former president behind bars — what is known as a custodial sentence — Mr. Trump would be no ordinary prisoner. That’s because the United States Secret Service is required by law to protect former presidents around the clock, which means its agents would have to protect Mr. Trump inside a prison if he was sentenced to serve time. Image The prospect of the former president ending up on Rikers Island has already been the topic of discussion among federal, state and local officials. Credit... José A. Alvarado Jr. for The New York Times Even before the trial’s opening statements, the Secret Service was in some measure planning for the extraordinary possibility of a former president’s incarceration. In the days before the trial began in April, prosecutors asked Justice Merchan to remind Mr. Trump that attacks on witnesses and jurors could land him in jail even before a verdict was rendered. Shortly thereafter, officials with federal, state and city agencies had an impromptu meeting about how to handle the situation, according to two people with knowledge of the matter. That behind-the-scenes conversation — involving officials from the Secret Service and other relevant law enforcement agencies — focused only on how to move and protect Mr. Trump if the judge were to order him briefly jailed for contempt in a courthouse holding cell before or during the trial, the people said. The far more substantial challenge — how to safely incarcerate a former president if he were to be sentenced to prison — has yet to be addressed directly, according to interviews with some of a dozen current and former city, state and federal officials. That’s at least in part because a drawn-out and hard-fought series of appeals, possibly all the way up to the U.S. Supreme Court, would be almost a certainty. That would most likely delay Mr. Trump’s serving any sentence for months, if not longer, said several of the people, who like other experts have suggested that a prison sentence is unlikely. Justice Merchan, whom Mr. Trump has continually attacked as “biased” and “corrupt,” could well decide to sentence Mr. Trump to probation rather than prison time. That would raise the bizarre possibility of the former — and possibly future — commander in chief reporting regularly to a civil servant at the city’s Probation Department. Mr. Trump would have to follow the probation officer’s instructions and answer questions about his work and personal life until the term of probation ended. He would also be barred from associating with disreputable people, and if he committed any additional crimes, he could be jailed immediately. Image The United States Secret Service is required by law to protect former presidents around the clock even if they are in prison. Credit... Haiyun Jiang for The New York Times Incarceration would present a far greater challenge, especially because Mr. Trump is the presumptive Republican nominee for president. “Obviously, it’s uncharted territory,” Martin F. Horn, who has worked at the highest levels of New York’s and Pennsylvania’s state prison agencies and served as commissioner of New York City’s correction and probation departments, has said. “Certainly no state prison system has had to deal with this before, and no federal prison has had to either.” Protecting Mr. Trump in a prison environment would involve keeping him separate from other inmates, as well as screening his food and other personal items, officials said. If he were to be imprisoned, a detail of agents would work 24 hours a day, seven days a week, rotating in and out of the facility, several officials said. While firearms are strictly prohibited in prisons, the agents would, most likely, nonetheless be armed. Former corrections officials said there were several New York state prisons and city jails that have been closed or partly closed, leaving large sections of their facilities empty. One of those buildings could serve to incarcerate the former president and accommodate his Secret Service protective detail. Anthony Guglielmi, the spokesman for the Secret Service in Washington, declined in a statement to discuss specific “protective operations.” But he has emphasized that federal law requires Secret Service agents to protect former presidents, adding that they use state-of-the-art technology, intelligence and tactics to do so. Thomas J. Mailey, a spokesman for New York State’s prison agency, has said that his department could not speculate about how it would treat someone who has not yet been sentenced, but that it has a system “to assess and provide for individuals’ medical, mental health and security needs.” Frank Dwyer, a spokesman for the New York City jails agency, recently said only that “the department would find appropriate housing” for the former president. While each count carries the possibility of up to four years in prison, Justice Merchan would most likely order any sentence to run concurrently, meaning Mr. Trump would serve prison time on each of the counts simultaneously. Under normal circumstances, any sentence of one year or less would generally be served on New York City’s notorious Rikers Island, home to the Department of Correction’s seven jails. (That’s where Mr. Trump’s former chief financial officer, Allen H. Weisselberg, 76, is serving his second five-month sentence for perjury.) Any sentence of more than a year would generally be served in one of the 44 prisons run by New York State’s Department of Corrections and Community Supervision. And what if Mr. Trump is elected president in November and is still serving a sentence of probation or prison when he takes office in January? He could not pardon himself because the prosecution was brought by New York State, not the federal government.
Fintech targeted by climate skeptics banks $37 million from likes of UBS, CommerzVentures 2024-05-30 11:24:00+00:00 - From left to right: Johan Pihl, Doconomy's chief creative officer and co-founder, and Mathias Wikstrom, chief executive officer and co-founder. Doconomy Swedish climate-focused financial technology startup Doconomy told CNBC on Thursday that it's raised 34 million euros ($36.9 million) from leading European banks, including UBS and CommerzVentures. Doconomy, which offers tools to help bank customers measure the carbon footprint of their everyday spending, raised the cash in a Series B financing round co-led by UBS Next and CommerzVentures, the venture arms of UBS and Commerzbank , respectively. Credit ratings agency S&P Global came on board as a new investor, while existing shareholders Motive Ventures, PostFinance and Tenity also participated. Founded in Sweden in 2018, Doconomy works with the likes of Boston Consulting Group, Mastercard, S&P Global, and the United Nations Framework Convention on Climate Change to calculate the climate cost associated with financial transactions. Among the firm's tools is the AIand Index, a cloud-based service for banks that helps their customers convert every transaction into its corresponding CO2 footprint. The index is used by more than 100 financial institutions in more than 40 countries. watch now Doconomy plans to use the fresh cash to drive expansion into North America and roll out new products, CEO and co-founder Mathias Wikstrom told CNBC in an interview. "Going forward, we want to enable every bank in every corner of the world to engage their clients in the ESG [environmental, social, and governance] work of the bank," Wikstrom said. "We see a connection between the E and S, the environmental and the social. We can't isolate those two different streams." Wikstrom said he was "very happy" to see partnerships emerging with the likes of UBS and Commerzbank, describing it as an "alliance of the winning both money and intellect into getting this issue under control. Politicization of climate News of Doconomy's latest funding follows the firm's February 2023 deal to acquire Dreams Technology, a platform that uses behavioral science to boosts customers' digital engagement and financial wellbeing. Wikstrom said that Doconomy's valuation in its Series B round is unchanged from the price at which it raised funds in its Series A, which saw the firm raise cash from the likes of Citi Ventures, Mastercard , and Ikea parent company Ingka. Doconomy's growth story hasn't come without its challenges. More recently, the firm faced attacks from right-wing online commentator Jordan Peterson and his followers. It's not really hurricane season anymore, it's fear season. Mathias Wikstrom CEO, Doconomy Last week, Peterson targeted the company in a post on social media platform X, labelling it the "soft positive planet-saving voice of the worst imaginable corporate/fascist/green tyranny." The Canadian psychologist, who gained internet fame critiquing so-called political correctness, is a noted skeptic who described climate change as "the idiot socialist get-out-of-jail-free card." He once framed rising greenhouse gas emissions as a positive for making the planet "green in the driest areas." Climate scientists say this is misleading, as it doesn't take into account the negative effects intensified droughts, wildfires and heatwaves caused by global warming have on plants and ecosystems. Wikstrom told CNBC that the situation concerning Peterson's attacks on his firm "illustrates that we need to educate a lot of people." "Fear will lead to frustration and frustration will potentially lead to protests, and protests will lead to violence and violence will lead to damage done," he told CNBC. Wikstrom said that he hopes that the more the likes of Peterson and other climate skeptics keep "banging the drum," the likelier that their sentiments will eventually sound "hollow." "Looking at what's happening in Hawaii, in Canada, in France, in Spain, in Greece — we have the floods, we have the fires, we have so many concerns now," he said. "It's not really hurricane season anymore, it's fear season." Climate fintech is a niche area of financial technology that has attracted heightened interest from investors, as world governments push corporates to hit ESG targets and reduce carbon emissions associated with their operations. Michael Baldinger, chief sustainability officer of UBS, said the bank's venture investment into Doconomy "underscores our focus on fostering innovation to provide the data and actionable insights our clients need to make informed choices about their investments and effect the change they want to see."
Bullish Nvidia Trade Soars as Day Traders Bet on Leveraged ETFs 2024-05-30 03:50:00+00:00 - (Bloomberg) -- The latest Nvidia Corp. frenzy is fueling an unprecedented rally in the booming industry of leveraged-up ETFs as retail traders go all-in on the world’s “most important stock.” Most Read from Bloomberg A GraniteShares fund, which gives investors two times the daily return of the Jensen Huang-run company, is now up 450% over the past year, with a record $4.7 billion in trading volume last week. The $2.8 billion GraniteShares 2x Long NVDA Daily ETF (ticker NVDL) launched in December 2022. Nvidia, the posterchild of the artificial intelligence craze, is fueling the bull market to multiple records with the now $2.8 trillion chipmaker posting a fresh blockbuster earnings report as bullish call options boom. On the flipside, bears have got crushed with the GraniteShares 2x Short NVDA Daily ETF (NVD), which tracks the daily inverse return of the underlying stock, down 86% this year alone. Read more: Nvidia Stock Surge Fueled by Short-Dated Call Option Squeeze With speculative euphoria running wild in markets, the creator behind the amped-up products is prepping an avalanche of new options-fueled strategies tracking everything from gold and Big Tech to Bitcoin. Put another way, Nvidia is increasingly the new Tesla Inc. as tech-bullish retail traders pounce on new ETF strategies. “If we were having this conversation three years ago, I would say we’d be talking exclusively about Tesla. That was where the enthusiasm was. That’s where all the flows were,” Will Rhind, chief executive officer of GraniteShares, said on Bloomberg Television’s ETF IQ. “Now, obviously the whole conversation is dominated by Nvidia that is why I think Nvidia is the most important stock in the world right now. And it goes without saying we got an ecosystem around Nvidia.” Leveraged funds have gained favor this year, amassing $11 billion of inflows so far, on track to keep pace with last year’s $20 billion, according to data compiled by Bloomberg Intelligence. Demand for this breed of funds has increased as investors seek new vehicles to bet on the market’s biggest themes. But they have also garnered mixed reviews due in part for exposing retail traders — who are often dubbed as less sophisticated than institutional ones — to high risk. Story continues GraniteShares has filed for at least 25 ETFs that track the performance of other single-stock ETFs that have daily 2x and 3x leveraged strategies. “What we are providing is institutionally priced leverage to the masses — that’s the big breakthrough,” he added. “With leverage comes risk and these products are not without risk.” --With assistance from Denitsa Tsekova. Most Read from Bloomberg Businessweek ©2024 Bloomberg L.P.
Boeing’s ongoing CEO search led to a $150M-plus potential payday for Carrier chief 2024-05-30 03:16:00+00:00 - Following the infamous door-plug blowout on Air Alaska flight 1282 on January 5, the Boeing board tore up its succession plan. Only three weeks earlier, Boeing had announced that Stephanie Pope, who'd served as CFO at both the Global Services and Commercial Airplanes divisions, and then headed the former unit for the previous fifteen months, would ascend to chief operating officer on January 1. The promotion clearly marked Pope as heir apparent to current CEO David Calhoun, the 67-year old GE veteran who'd championed her as the best choice for his successor. But the disaster at 16,000 feet over Portland delivered a shattering shock that reduced Calhoun's clout and gave the board second thoughts on succession. On March 25, Boeing announced that Calhoun would depart as CEO by year end, and that former Continental Airlines chief Larry Kellner would step down as chairman, replaced by Steve Mollenkopf, retired CEO of Qualcomm and a Boeing director since 2020. The board fired the head of the troubled Commercial Airplanes unit that produces the 737 Max and 787 Dreamliner series, and put Pope in charge, adding to her role as COO. Calhoun's still backing Pope to lead Boeing, as he stated on April 29, both on CNBC and during Boeing's earnings call that day. But under the leadership of Mollenkopf, an engineer who acquired a deep understanding of production processes on the fab floors at Qualcomm, and who's spearheading the search, the Boeing board now favors another brand of leader. Not a financial specialist like Pope but a seasoned manufacturing ace who masters airplane building from nose cone to rudders, and harbors the expertise to install safeguards ensuring the highest caliber wrench-turning, riveting and shimming required to restore the Boeing's now severely tarnished reputation for quality and safety. The directors reckon that Boeing needs a radical change agent who'll transform the broken culture that's keeping the planemaker from regaining its place among the world's greatest manufacturers. By mid-January, according to my sources, the board had decisively switched to favoring an outsider featuring strong experience in making the most challenging in technologically complex products, including in aerospace. The leading candidate was Dave Gitlin, CEO of Carrier Global, the heating, ventilation and AC giant, and a Boeing director since mid-2022. Gitlin boasted a superb resume for the job. He'd spent 23 years at United Technologies Corp., including stints as president of UTC Aerospace Systems and Collins Aerospace respectively, gaining a solid grounding in the output of everything from avionics to landing gear to aircraft wheels and brakes. When UTC spun out its Carrier unit in the spring of 2020, it chose rising star Gitlin to run the newly-independent enterprise. Story continues At Carrier, he's arguably proven America's most successful industrial leader for rewarding shareholders. In four years at the controls, Gitlin's multiplied Carrier's market cap from around $12 billion to $58 billion and delivered annualized total returns of roughly 50%. During that span, Carrier's stock has outperformed the shares of Microsoft, Apple, Alphabet and every other member of the Magnificent Seven save Nvidia. Spotlighting Gitlin's prowess is Carrier's performance under COROA, or "cash operating return on assets." Developed by accounting specialist Jack Ciesielski, COROA measures the cash companies generate for each dollar still invested in the business. From 2022 to 2023, Carrier increased its adjusted asset base by $3.3 billion, and made an additional almost $1 billion in "operating cash flows" (a measure that includes cash paid for interest and taxes) on those newly added resources, for a return of 30%. Hence, Gitlin's proven his worth as a excellent general manager, in addition to harboring deep expertise in aerospace. Gitlin says no to Boeing, and captures a huge reward from Carrier for staying on Prior to the current crisis, you'd hear occasional talk that Gitlin might succeed Calhoun, including speculation from Reddit bloggers and infrequently, securities analysts. But after the January 5 cataclysm, the view that the board would pick a newcomer took hold, and Wall Street and the business press buzzed that Gitlin appeared the ideal choice. Picking a CEO from the company's board is a time-honored solution—especially for repairing a player in crisis. The advantage: the director's already steeped in the company's finances and operations, and really knows what he or she would be getting into. Calhoun had been a board member when he followed Dennis Muilenburg, who was fired in the wake of the two 737 Max crashes in late 2018 and early 2019 that killed 346 passengers and crew. Likewise, GE had plucked Larry Culp from its roster of directors in 2018, and he'd done a spectacular job reviving the then-failing jet engine, power and healthcare conglomerate. At age 54, director Gitlin not only knew Boeing intimately, he had a runway of a decade or more at the controls, a span long enough to bridge overseeing the development of its first all-new plane in decades. But on Carrier's Q1 earnings call, Gitlin silenced all the chatter about a move to Boeing. In response to an analyst's question, he declared, "I've removed my name from consideration as a potential CEO of Boeing. I'm staying put, 100% committed to Carrier. We're in the early innings of what...will go down as one of the biggest transformations ever, and I'm so excited to be on a journey with 70,000 or so of the team members at Carrier." So what happened? Gitlin's declaration that "I've removed my name..." implies that at the very least, Boeing showed interest in hiring Gitlin. My sources also confirm that Gitlin mulled considering the opportunity. The Carrier board apparently took notice in a big way. On January 30, four weeks after the close of a year when Gitlin had already received a long-term incentive award targeted at $11.15 million, Carrier issued an 8K filing that unveiled a lucrative new "supplemental equity award" or "rentention" package fashioned to keep him in Palm Beach Gardens, Fla. running the HVAC-maker—and take a move to Boeing off the table. The 8K characterized Gitlin's continued leadership as critical, since he's in the midst of a "pivotal moment" in recasting Carrier's product portfolio, a recasting that includes the recent $13 billion purchase of German heat pump-maker Viessmann Climate Solutions, and the sale of its fire security and commercial refrigeration arms, all moves designed to refocus on highest growth and margin segments. Carrier also nodded to the outside interest that prompted the big award, undoubtedly a response to the Boeing's overtures and their concerns that the opportunity might entice their coveted CEO. "The Board considered the extremely competitive market by direct peers and broader industrial companies for...high profile CEOs such as Mr. Gitlin," the filing stated. "Mr. Gitlin's market attractiveness is further heightened through a very successful period for Carrier." Carrier declined to comment on Boeing's CEO search. Gitlin's package is big, but he'll have to deliver and stay at Carrier for years to collect As the 8K discloses, Gitlin's getting a single "supplemental equity" award that comes in two parts. The first component: A "target" grant of 446,110 performance share units. The actual number of PSUs he'll receive hinges on achieving increases in adjusted EPS from 2024 to 2026 that are not specified in the 8K, though in its proxy Carrier calls its EPS goals "rigorous" benchmarks" that are "stretch but attainable [targets]." If Gitlin achieves the highest EPS metrics, he gets a maximum of double the target number, or almost 900,000 PSUs. The second category: 1.725 million stock appreciation rights with a strike price of $56.33, where Carrier's shares closed the day the 8K appeared. No performance requirements for receiving the SARs are disclosed in the filings. Overall, the package is designed to ensure that Gitlin stays at Carrier for a long time. The PSUs vest from 2027 to 2029 and the SARs vest all at once in 2029. If Gitlin leaves before the end of 2029, he'd sacrifice all but a relatively small portion of the grants. Fortune has learned from outside sources that Carrier valued the award at $50 million as of the January 30 issue date, when its stock closed at $56.33. Since then, its shares have risen 16%, already making the package a lot more valuable. Let's tally how much Carrier could be paying, over the life of the plan, to retain its redoubtable helmsman. Keep in mind that Gitlin must keep performing well to get anywhere near the maximum payout. If Gitlin achieves the top EPS metric, he'd garner those almost 900,000 PSUs, or double the target. Substantially raising earnings means the stock price would flourish. Let's say Gitlin lifts Carrier's shares by 10% annually over the six year span he's basically committed to. That record would hoist Carrier's stock to $116, a 77% increase. His PSUs would then be worth roughly $100 million. What about the SARs? At $116 a share in 2029, they'd harvest an additional $100 million or so (the 1.725 SARs at a gain of $61 each over the strike price of $56). Hence, the potential payout for keeping Gitlin at Carrier could easily reach $200 million. Experts I spoke to regard this retention arrangement as extremely generous, but hardly over-the-top. It's also a good move, since even the top payment would equal a fraction of the value Gitlin's added for Carrier's shareholders, and as the board logically reasons, the deal's a fair trade versus what he could contribute over the next six years. What Gitlin's gambit may be telling us about the Boeing job On the one hand, the Boeing CEO job, at least in good times, towers as one of the most prestigious positions in global business. In the years to come, any figure who can restore the fortunes of this fabled manufacturer would rank in the pantheon of business leaders for this half-century. But in sundry other ways, the Boeing post, at least right now, looks highly undesirable to prestigious candidates. The Gitlin experience is revealing. Boeing's financial performance is now so poor that even a turnaround wouldn't guarantee that a new CEO delivers the results needed to pocket a huge long-term comp windfall of the size Gitlin's likely to receive at Carrier. What's more, a Boeing CEO always has to worry that a Boeing plane will suffer a new accident like the explosion over Portland, or God forbid, a fatal crash. The cause could be parts or systems made years ago that the new CEO had nothing to do with. Put simply, the Boeing CEO job is a hard-sell for its board. Top leaders who were at one time possible candidates in the eyes of the directors, including Dave Gitlin, Larry Culp and chairman Steve Mollenkopf, haven't warmed to a task that's critical to the future of the airlines and the flying public. Of course, Gitlin and Culp were already heading highly successful companies, and Mollenkopf had established an excellent record at Qualcomm. Yet the job's daunting risks may be a reason that so far, the top talent keeps saying "no." My sources also note that the pool of top promising candidates is surprisingly shallow. Hopefully, the opportunity of turning around what's arguably America's most important company, and be remembered as a corporate hero, will prove irresistible to leader who will display the greatness that will once again lift Boeing to glory. This story was originally featured on Fortune.com
American Airlines hits rough air after strategic missteps 2024-05-29 22:40:00+00:00 - American Airlines is cutting its financial outlook, with CEO Robert Isom acknowledging the carrier misjudged travel demand before the peak summer season. The carrier's total revenue per available seat mile is expected to be off about 5% to 6%, versus its previous forecast calling for a decline of about 1% to 3%. "The guidance cut seems to e a combination of both higher domestic competition (competitor fare sales and higher capacity) as well as a loss of corporate share given a de-emphasis post-pandemic," BofA Global analysts Andrew Didora and Samuel Clough said in a research note. In a regulatory filing, American said it now forecasts second-quarter adjusted earnings in a range of $1 to $1.15 a share, versus its prior forecast was of $1.15 to $1.45 a share. Analysts surveyed by FactSet forecast second-quarter earnings per share of $1.20, on average. The airline's shares tumbled nearly 14% Wednesday to close at $11.62. The nosedive came a day after American disclosed that Vasu Raja, its chief commercial officer, would depart in June. Raja oversaw an apparently backfired effort to push customers to book travel directly from American through its app and website instead of third-party sites. The strategy including eliminating American's corporate sales team, which helped save on distribution costs. But "American is now losing share as corporate travel recovers," Didora and Clough noted. Isom offered a similarly bleak view at an industry conference on Wednesday. "Our expectation for domestic performance has worsened materially since we provided guidance in April for a few reasons," Isom said. "We're seeing softness in customer bookings relative to our expectations that we believe is in part due to the changes that we have made to our sales and distribution strategy." After praising Raja as an "innovator, a disruptor" and good friend, Isom added "sometimes we need to reset." In February American announced that as of May 1, customers would have to buy tickets directly from the airline, its partner carriers or preferred online travel agencies if they wanted to earn points in its AAdvantage loyalty program. When the changes were announced, Raja said in a prepared statement that American was looking to make travel more convenient for customers and that by booking directly with the airline customers would get the best fares and it would be the most rewarding for its loyalty program members. But the changes were met with criticism by some, who voiced displeasure with restrictions placed on how they could earn points for the loyalty program. Isom said at the conference that American no longer plans to differentiate who earns AAdvantage miles and who doesn't, based on where they booked. "We're not doing that because it would create confusion and disruption for our end customer, and we're going to make sure that we take care of it," he said. "We're listening to feedback. We're learning and adapting." —The Associated Press contributed to this report.
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Stocks making the biggest moves after hours: Salesforce, UiPath, Capri, Pure Storage and more 2024-05-29 22:04:00+00:00 - The logo for Salesforce is displayed on the Salesforce Tower in New York City on March 7, 2019. Check out the companies making headlines in extended trading: Salesforce — Shares plunged more than 14% after first-quarter revenue of $9.13 billion missed consensus estimates of $9.17 billion, according to LSEG. Adjusted earnings of $2.44 per share beat a consensus estimate of $2.38, but current-quarter guidance fell below estimates on both top and bottom lines. UiPath — The software company tanked 30% after saying its CEO Rob Enslin will resign, effective June 1. He will also be stepping down from the board of directors. Daniel Dines, former CEO of UiPath and current chief innovation officer, will return to the helm. HP Inc. — The manufacturer of personal computers rose 3%. HP posted adjusted earnings of 82 cents per share on revenue of $12.8 billion in its fiscal second quarter, above analysts' estimates of 81 cents a share and revenue of $12.6 billion, according to LSEG. Pure Storage — The software company rose 1% on better-than-expected fiscal first-quarter earnings. Pure Storage posted 32 cents a share in adjusted earnings on $693.5 million in revenue. Analysts surveyed by LSEG had forecast 21 cents a share on revenue of $681 million. Okta — The digital identity verification company added nearly 2% after top- and bottom-line numbers topped analysts' estimates in the first quarter. Okta's second-quarter revenue guidance range of $631 million to $633 million also beat the consensus estimate for $616 million, according to LSEG data. Capri — The Versace and Jimmy Choo fashion group shed 3% after fiscal fourth-quarter results missed analysts' estimates. Capri reported adjusted earnings of 42 cents a share, while analysts had estimated 65 cents, according to LSEG. Revenue of $1.22 billion also missed forecasts of $1.30 billion. Management cited softening demand for luxury goods and a slowdown in Asia. C3.ai — Shares of the artificial intelligence software company climbed more than 8% after reporting quarterly results above estimates. C3.ai lost an adjusted 11 cents per share on $86.6 million in revenue. Consensus estimates had called for a loss of 30 cents on revenue of $84.4 million, according to LSEG. Full-year revenue forecasts also beat estimates. American Eagle Outfitters — Shares pulled back nearly 6% after the clothing retailer's first-quarter revenue missed estimates and it issued weak forward guidance. American Eagle Outfitters reported $1.14 billion in revenue, lower than the average analyst estimate of $1.15 billion, according to LSEG data. Earnings beat estimates, but full-year revenue guidance was in a range of 2% to 4%, compared to forecasts for 3.4%. Agilent Technologies — The life sciences company tumbled 14% after lowering full-year earnings and revenue guidance. Agilent guided for earnings per share between $5.15 and $5.25 versus previous guidance of $5.44 to $5.55, according to FactSet. Revenue guidance was also pulled back to between $6.42 billion and $6.50 billion, compared to prior guidance in a range of $6.71 billion to $6.81 billion. Meanwhile, fiscal second-quarter earnings topped estimates, while revenue narrowly fell below the consensus estimate. Nutanix — The cloud computing company tumbled 14% after issuing its fiscal fourth-quarter revenue forecast of $530 million to $540 million that missed analysts' estimates of $546 million. Full-year revenue guidance of $2.13 billion to $2.14 billion compared to prior forecasts of $2.12 billion to $2.15 billion, and consensus estimates of $2.14 billion, per FactSet. — CNBC's Darla Mercado contributed reporting.
McDonald’s says $18 Big Mac meal was an ‘exception’ and news reports overstated its price increases 2024-05-29 21:52:03+00:00 - McDonald’s is fighting back against viral tweets and media reports that it says have exaggerated its price increases. In a post on the company’s website Wednesday, McDonald’s U.S. President Joe Erlinger said reports suggesting the price of the average Big Mac has doubled since 2019 were false. McDonald’s said the average U.S. Big Mac was $4.39 in 2019 and now costs $5.29, a 20.5% increase. “For a brand that proudly serves nearly 90% of the U.S. population every year, we feel a responsibility to make sure the real facts are available,” Erlinger said. Erlinger acknowledged that he and many franchisees were frustrated by a post on X last summer about a Big Mac meal in Connecticut that cost $18, calling the price “an exception.” He noted that franchisees own and operate 95% of U.S. McDonald’s locations and set their own pricing but “work hard to minimize the impact of price increases.” The average U.S. price of a Big Mac meal, which includes a sandwich, fries and a drink, currently is $9.29. Still, the Chicago burger giant said the cost of some items have seen bigger price jumps than the Big Mac. The average price of medium fries was $2.29 in 2019 and is $3.29 now, a 44% increase. McDonald’s said the average price of all menu items has risen 40% over the last five years, to account for a 40% average increase in the cost of labor, paper and food. That is higher than overall consumer prices, which have increased 21% since December 2019, according to government figures. McDonald’s saw a marked slowdown in store traffic in the first three months of this year as inflation-weary customers in the U.S. and other big markets ate out less often. As a result, the company promised more deals. Next month, McDonald’s is expected to introduce a $5 meal deal across the U.S. that will include a sandwich, a four-piece McNugget, small fries and a small drink. Erlinger said he hopes customers will find the company’s upcoming deals “meaningful.” “It’s clear that we — together with our franchisees — must remain laser-focused on value and affordability,” Erlinger said.
Trump's fate lies in the hands of 12 New Yorkers 2024-05-29 21:38:29+00:00 - Welcome back, Deadline: Legal Newsletter readers. We’re here with a special edition marking closing arguments and the start of deliberations in People v. Donald Trump. We’re officially on verdict watch. Closing arguments were a marathon Tuesday, with Trump lawyer Todd Blanche giving his summation to start the day and prosecutor Josh Steinglass ending his late in the evening. Blanche hammered away at key state witness Michael Cohen, calling him the “MVP” of liars. Steinglass then recalled the mountain of evidence in addition to Trump’s former fixer, arguing that it’s “difficult to conceive of a case with more corroboration than this one.” We could probably conceive of such a case, but the state’s election conspiracy cover-up narrative is supported well beyond Cohen. The question isn’t whether this is the most corroborated case of all time but, rather, whether Manhattan prosecutors have proved the falsifying business records charges beyond a reasonable doubt. “Use your common sense,” Steinglass urged the jury in answering this ultimate question, “and follow the judge’s legal instructions.” Those instructions came Wednesday morning and they’re crucial to the outcome. Manhattan prosecutors must prove that Trump not only caused the allegedly falsified records but also did so with intent to defraud that included an intent to commit, aid or conceal another crime. Merchan explained to the jury that the other crime at issue is a state law that bars conspiring to promote or prevent the election of any public official by “unlawful means.” Those means may include federal election law violations, tax violations or falsifying other business records — but the jury doesn’t need to unanimously agree on which unlawful means. (Trump and his surrogates later falsely wrote to their millions of social media followers that Merchan wasn’t requiring unanimity for the charges.) We don’t know how or when the jury will decide this historic case. But it has several options. It can convict the defendant on all 34 counts if there’s unanimous agreement that the state proved them beyond a reasonable doubt. It could acquit on all counts if jurors agree that the state failed to meet its burden. It could fail to reach a guilty or not guilty verdict, leading to a hung jury and possible retrial. Or the jury could reach a mixed verdict of guilty, not guilty and hung counts. Incarceration isn’t mandatory for a conviction on these low-level felonies. Merchan reminded jurors of that fact after Blanche told them in his closing arguments that they shouldn’t send his client to prison. It was a clear violation by the defense lawyer because the jury isn’t legally allowed to consider possible punishment, which is the judge’s job if there’s a conviction. All criminal lawyers know this. Yet, Blanche’s foul move effectively introduced the subject into the courtroom. We got a window into the jury’s thinking on Wednesday, a few hours into deliberations. When jurors have questions, they’ll send notes to the judge. That happened twice Wednesday afternoon. The first one asked for certain details from the testimony of Cohen and David Pecker, the tabloid publisher who testified to the catch-and-kill scheme at the center of the alleged election conspiracy that prosecutors say Trump covered up with false records. The second note asked to rehear Merchan’s instructions, which aren’t sent into the jury room. It can be dangerous to read too much into jury notes, but overall these clues may be more helpful to the prosecution rather than the defense. Jurors may be confirming the alleged election scheme and the law they must follow. Pecker was the state’s first witness, so they may benefit from a refresher on his words. Whatever the jurors are thinking, it looks like they’re thinking. But let’s not get ahead of ourselves. As I noted above, the jury has several options on the table for its verdict. Jurors are set to return Thursday morning to hear the requested testimony and instructions. Unless they have many more questions requiring extensive testimony or law read back to them, we could learn their verdict by Friday’s regular newsletter. Subscribe to the Deadline: Legal Newsletter for weekly updates on the top legal stories, including news from the Supreme Court, the Donald Trump cases and more.
American Eagle profit soars, but sales grow slower than expected 2024-05-29 21:38:00+00:00 - American Eagle on Wednesday said it’s making gains in boosting profitability as it works to improve its product assortment and tweak operations. Still, its fiscal first-quarter sales came in weaker than Wall Street expected. While revenue came in slightly below estimates, it was 6% higher than the year ago period and marked a new record for the company, it said in a news release. Shares fell about 5% in extended trading on Wednesday. Here’s how the apparel company did compared with what Wall Street was anticipating, based on a survey of analysts by LSEG: Earnings per share: 34 cents vs. 28 cents expected 34 cents vs. 28 cents expected Revenue: $1.14 billion vs. $1.15 billion expected The company’s reported net income for the three-month period that ended May 4 nearly quadrupled compared to the year ago period. American Eagle posted net income of $67.8 million, or 34 cents per share, compared with $18.5 million, or 9 cents per share, a year earlier. Sales rose to $1.14 billion, up about 6% from $1.08 billion a year earlier. American Eagle said its continuing to expect full-year operating income in the range of $445 million to $465 million, reflecting revenue growth of up 2% to 4% compared to the prior year. That’s slightly below estimates of up 3.4%, according to StreetAccount. Finance chief Mike Mathias told CNBC that American Eagle is maintaining a “cautious” view for the back half of the year as it prepares to lap some tougher comparisons, awaits interest rate decisions from the Federal Reserve and prepares for “noise” around the upcoming presidential election. He added the company is waiting to see how the back-to-school shopping season goes to get a better idea on how the rest of the year plays out. For the current quarter, American Eagle expects operating income in the range of $95 million to $100 million, reflecting revenue growth of high single digits, which is in line with the 7.4% uptick that analysts had expected, according to LSEG. The apparel company, which runs its namesake banner and intimates brand Aerie, is in the midst of a new strategy to boost growth. It’s looking to grow sales by 3% to 5% each year over the next three years and get its operating margin to about 10%. Some of its efforts are beginning to bear fruit. During the fiscal first quarter, American Eagle grew its gross margin by 2.4 percentage points. The gains were driven by better inventory management, lower product and transportation costs and leverage on expenses including rent, delivery and distribution and warehousing. American Eagle’s strategy has also focused on revamping its product assortment, removing items that weren’t working for its customers and drilling down on the categories that are resonating. Jennifer Foyle, American Eagle’s president and executive creative director, told CNBC that the company was just “over-skued” — meaning it had too many different individual products, often referred to in the industry as SKUs, for consumers to choose from. “We knew we could do more with less,” said Foyle. “So deeper investments in our bottoms but less SKUs so that we are servicing our customer on the fits that they’re demanding from us.” The company has also been working to revamp its stores and introduce new formats. It recently implemented a new store design for American Eagle, which is “outpacing the balance of the chain,” said Foyle. “We’re excited about remodeling our stores with a new feeling for the brand that I think expresses exactly what we’ve been up to,” said Foyle. “The customer, obviously is loving what they see in that store design based on the results.”
UiPath shares tank 30% after company announces CEO shakeup 2024-05-29 21:37:00+00:00 - Daniel Dines, billionaire and co-founder of UiPath Inc., at the automation software company's offices in Bucharest, Romania, on Thursday, May 20, 2021. UiPath shares plunged more than 30% on Wednesday after the software company said CEO Rob Enslin is resigning effective June 1, and being replaced by co-founder Daniel Dines, who stepped down as co-CEO on Jan. 31. "I am convinced that UiPath will continue to define what's possible for our customers and partners in the AI and automation market," Enslin said, adding his decision to resign came "after much reflection." Dines co-founded UiPath in 2005 with Marius Tirca. The company makes software which automates repetitive and "menial" tasks, but its stock has suffered under Enslin's sole leadership. Shares are down 26% year-to-date, after the company debuted in one of the largest U.S. software IPOs ever in 2021. The company also reported first fiscal quarter earnings on Wednesday, with revenue growing 16% year-over-year to $335 million, better than the LSEG consensus estimate of $333 million. UiPath's loss per share narrowed to 5 cents, compared to 6 cents in the year-ago period. But CFO Ashim Gupta also warned that sales cycles for larger, multi-year deals were elongating and that customers were subjecting UiPath to "increased deal scrutiny," and that those factors along with the leadership reshuffle weighed on its updated full-year guidance. The company lowered its guidance for full year revenue. It now expects revenue to fall between $1.405 billion and $1.41 billion, compared to its prior-quarter guidance of $1.55 billion to $1.56 billion. Enslin joined UiPath from Google Cloud. He was heralded by Dines at the time as an executive with "the right balance of experience and skills" and an operations background to grow UiPath, leaving Dines free to focus on "culture, vision and product innovation." Dines decision to bring in an operations executive was one that many founders have made. Facebook co-founder Mark Zuckerberg did something similar with former COO Sheryl Sandberg, a move that is credited with galvanizing the company into maturity. Enslin did not have the same effect. UiPath shares, barring a brief post-IPO bump, have never traded above their debut price. The stock is down nearly 76% from its May 2021 IPO. — CNBC's Ari Levy contributed to this report.
American Airlines CEO admits the airline messed up its plan to disrupt how tickets are sold 2024-05-29 21:36:10+00:00 - American Airlines slashed its revenue and margin outlook for Q2 2024 on Tuesday. The airline also announced the departure of chief commercial officer Vasu Raja. American's CEO said part of its struggles is due to recent changes in ticket sales strategy. Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . You can opt-out at any time by visiting our Preferences page or by clicking "unsubscribe" at the bottom of the email. Advertisement American Airlines lowered its earnings outlook for the second quarter of 2024 and announced the departure of its Chief Commercial Officer on Tuesday. Speaking at an event on Wednesday, CEO Robert Isom said the lower earnings guidance can be attributed to a weaker-than-expected marketplace and the airline's weaker-than-expected performance. A key factor behind lower bookings is the airline's recent changes to ticket sales strategy, Isom said. This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in .
China is developing systems to hunt US submarines from the air 2024-05-29 21:31:01+00:00 - By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . You can opt-out at any time by visiting our Preferences page or by clicking "unsubscribe" at the bottom of the email. China is developing new systems to hunt the US nuclear-powered submarines that could threaten a Chinese invasion of Taiwan, according to a new report. The Chinese navy views anti-submarine warfare, or ASW, as essential to any successful amphibious operation and intends to use its aircraft to protect a flotilla from submarine attack by the US or Japan. This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. "The PLAN [People's Liberation Army Navy] clearly views fixed-wing and vertical lift ASW capabilities as a crucial component necessary for any of its amphibious based contingencies, be that a seizure of an island or reef, or the successful implementation of a Joint Island Landing Campaign against Taiwan," wrote Eli Tirk and Daniel Salisbury in a study for the China Maritime Studies Institute at the Naval War College. "ASW capabilities would be crucial for safeguarding high value surface assets such as carriers or an amphibious landing group, protecting them as they are in port embarking forces, sanitizing the operational area of enemy submarines, and escorting these assets on their way to staging areas and operational areas." Also significant is that Chinese airborne sub hunters are tasked with protecting Chinese ballistic missile submarines as they sail to their patrol and launch locations. "The PLAN clearly views fixed-wing ASW as an important enabler of its at-sea nuclear deterrent," the report said. Advertisement The Chinese navy's current fixed-wing anti-submarine aircraft is the KQ-200, a four-engine turboprop aircraft that is China's equivalent of the US Navy's P-8 Poseidon. The PLAN has about 20 KQ-200s, which have a range of about 3,000 miles. Much like the US Navy, China's submarine force tends to be secretive. But by examining open-source literature, Tirk and Salisbury were able to discern the efforts China is making in anti-submarine warfare, including patents filed by Chinese researchers. Related stories For example, the state-owned China Electronics Technology Group Corporation filed a patent in 2020 for improved magnetic anomaly detection (MAD), a technology first used in World War II to detect subs by the effect of these big metal objects on the Earth's magnetic field. It's a useful but limited system that usually requires the aircraft to be flying within less than a mile of the target, and can only detect the presence of a sub rather than its course — which means a positive hit must be followed by laying a web of other sensors to be able to target the lurking submarine. Chinese scientists want to use highly sensitive atomic magnetometers, which use lasers to detect changes in the energy levels between atoms caused by fluctuations in a magnetic field. CETC's patent is for technology that would "enable an atomic magnetometer to sense the direction of a target rather than just its existence," Tirk and Salisbury noted. "According to the filing, previous research on highly-sensitive atomic magnetometers had focused on scalar results (i.e. only the magnitude of a target's magnetic field), but could not provide vectors (i.e. magnitude and direction). MAD is already a shorter-range capability usually used for more precise positioning after other sensors have provided a rough search area, but any additional information could potentially give operators an edge during search operations." Advertisement A US naval aircrewman checks sonobouys loaded onto a MH-60R Sea Hawk helicopter. MC1 Deanna C. Gonzales/US Navy A 2022 patent by Aviation Industry Corporation of China calls for a new system to operate sonobuoys, which are floating canisters, dropped by planes and ships, that detect subs by emitting active sonar signals or by passive sensors that detect the noise of a submarine. Current Chinese sonobuoys require "a complicated and labor-intensive series of manual button presses to configure sonobuoy parameters such as radio working frequency, working depth, working time, and pulse form to fit maritime conditions before deployment." These parameters aren't displayed on the sonobuoy control system. "This means the display and control system is unaware of whether a sonobuoy is on the rack or has been launched, what type of sonobuoys have been launched, or the parameters of any launched sonobuoys," Tirk and Salisbury wrote. "Instead, operators must manually input this data into the display and control system." Other patents are for lighter sonobuoys, and improved communications between sonobuoys and aircraft. In 2022, China surpassed America in number of patents filed. China has also been improving the quality of anti-submarine training. "The PLAN has acknowledged its limitations and has begun taking steps to improve the quality of its ASW training, both in simulators and in physical training environments," the report said. "PLAN ASW units are training under more realistic conditions, and breaking down administrative barriers which prevented them from generating more training opportunities in different operational environments." Advertisement For example, since 2015, training materials have stressed the need for ASW aircraft and ships to work closely together, which is standard practice in the US and Western navies. The PLAN is also using simulators to train sensor and weapon operators. One exercise involved a patrol aircraft transmitting target data to a command ship, "which then integrated it with information from other sources and checked the information against a target information database to confirm whether or not the target was an enemy submarine," the CMSI report noted. "This indicated both a potential command relationship from command vessels to ASW aircraft and confirmed that the PLAN trains to compare potential targets to a database, despite its small (but expanding) ocean surveillance and intelligence collection fleet and a nascent underwater surveillance capability." Michael Peck is a defense writer whose work has appeared in Forbes, Defense News, Foreign Policy magazine, and other publications. He holds an MA in political science from Rutgers Univ. Follow him on Twitter and LinkedIn.
Top McDonald's exec says $18 Big Mac meal is "exception," not the rule 2024-05-29 21:31:00+00:00 - A top McDonald's executive on Wednesday decried "poorly sourced reports" that the fast-food giant has hiked its prices faster than inflation. "I can tell you that it frustrates and worries me, and many of our franchisees, when I hear about an $18 Big Mac meal being sold — even if it was at one location in the U.S. out of more than 13,700," Joe Erlinger, president of McDonald's USA, said in a letter posted on the restaurant chain's corporate website. "More worrying, though, is when people believe that this is the rule and not the exception, or when folks start to suggest that the prices of a Big Mac have risen 100% since 2019." Erlinger said the average cost of a Big Mac is now $5.29, up 21% from $4.39 in 2019. McDonald's menu prices "remain well within the range of other quick service restaurants," added. "Inflationary pressures have affected all sectors of the economy, including ours," Erlinger said. "Our franchisees (who own and operate more than 95% of all restaurants in the U.S.) set menu prices for their restaurants, which account for the increased costs of running their businesses." Erlinger's letter comes nearly a year after a McDonald's customer in Connecticut went viral on social media for posting about a Big Mac combo meal priced at a $17.59. The average price of a Quarter Pounder with cheese grew is now $5.39, up 20% from $4.49 in 2019, Erlinger's letter states. The average price of an Egg McMuffin is $4.29, up 23% from $3.49 in 2019, while the average cost of a 10-piece McNuggets meal is $9.19, up 28% from $7.19 five years ago. But Erlinger also said McDonald's franchise owners have sought to keep a lid on prices. The letter comes amid signs that at least some Americans are reducing their fast-food consumption because of rising costs. A January poll by consulting firm Revenue Management Solutions found that roughly a quarter of consumers who earn less than $50,000 a year were cutting back on fast food because of concerns about the price. McDonald's is planning to launch a limited-time $5 meal promotion in an effort to attract budget-conscious customers, while rivals such as Burger King and Wendy's are offering similar deals. More than 90% of McDonald's franchisees now offer meal combos for $4 or less, Erlinger said. "I fully expect the prices at your local McDonald's to be an area of conversation and focus in the coming months," he said. "As it does, I hope you'll see the programs we're launching nationally and locally as meaningful to you."