The WSJ reports that the current IPO frenzy featuring the likes of Lyft, Uber, Pinterest, Postmates, and Slack Technologies is different than the IPO frenzy in 1999. Then, many of the firms coming public had little more than a half-baked business plan. The current crop of IPOs includes more established businesses with average annual revenues approaching $200 million. Despite the higher revenue generation, profitability is just as elusive for firms coming public in 2019 as it was in 1999. Maybe this time isn’t so different after all. The WSJ has more details below. One trait that … [Read more...]

Anheuser-Busch InBev and Keurig Dr Pepper are teaming up with a plan to make single-serve cocktail machines similar to Keurig's hot beverage machines. A joint venture between the two companies called Drinkworks, will "automate home bartending" with the machine. Jennifer Maloney reports for the WSJ: The Drinkworks machine is offered for preorder for $299 and is on sale in St. Louis for $399. Using liquid-filled pods, it adds water and carbonation to serve up cocktails like a Moscow Mule, an Old Fashioned, a mojito or a gin and tonic—plus three brands of beer and cider. The machine chills … [Read more...]

The pols are out trying to punish firms that buy back their own shares. The left wants to ban buybacks unless a company agrees to a litany of their demands. The right wants to put buybacks and dividends on equal footing by taxing buybacks. Neither approach is a good idea. If the government bans buybacks, acquisitions and conglomeration are likely to increase—both have a higher probability of destroying value. The politicians are attacking this from the wrong direction. As we have written in the past, buybacks started to soar in the 1990s after executive pay for public firms became … [Read more...]

In a recent interview with CNBC, famed investor Jeremy Grantham explained that despite new stimulus from the ECB, and a halt on tightening measures by the Fed, he isn't optimistic that a boom in stock prices is forthcoming. Mark Decambre reports at MarketWatch: Jeremy Grantham, an investor credited with predicting the 2000 and 2008 downturns, told CNBC on Thursday that investors should get inured to lackluster returns in the stock market for the next two decades, after a century of handsome gains. “In the last 100 years, we’re used to delivering perhaps 6%,” but the U.S. market will be … [Read more...]

Big brewers like AB InBev are looking to turn around a market for their products that has been extremely difficult to navigate of late. Saabira Chaudhuri reports on the brewer's efforts to boost growth, writing in The Wall Street Journal: In response to the slowdown, AB InBev has launched pricier, limited-edition or flavored variants of its flagship brands and worked to diversify. Earlier in February, it bought a maker of ready-to-drink canned cocktails and high-end spirits, adding to its growing portfolio of nonbeer offerings, including spiked seltzer and energy drinks. It has also pushed … [Read more...]

Hedge funds have been moving out of most stocks, but the few stock purchases they are making are increasingly concentrated among the big American and Chinese tech names. Bloomberg's Lu Wang and Melissa Karsh write that Goldman Sachs data shows "the top 10 holdings on average made up 70 percent of a fund’s long portfolios, the highest since at least 2002." The narrow band of stocks being traded by the hedge funds are highly correlated and basically constitute one trade. If the sector is hit, the lack of diversification could send hedge funds reeling. Wang and Karsh write: As a group, … [Read more...]

The meat packing business is historically cyclical, and bad times can put unprepared companies into bankruptcy. That's why John Tyson, chairman of Tyson Foods, is trying to shift the company's business into branded prepackaged and prepared foods that perform better during market swings. Jacob Bunge reports for The Wall Street Journal: For 16 hours at a stretch, the stream of deep-brown strips and other products continues across Tyson’s 50 U.S. plants that together disassemble 37 million chickens each week, turning them into nuggets, wings and breasts. By now, another 10.5 pounds have filled … [Read more...]