Enjoy your December 19th hand-crafted Brew!
QUOTE OF THE DAY
“Boring, it’s what we do” — Elon Musk, tweeting while stuck in traffic that he’s gonna start a company to fix traffic called “The Boring Company.” You can’t make this stuff up, people.
Market Snapshot
Two Bad 2016’s
…Might make for one good 2017. Over the weekend, Chipotle (+2.54%) and activist investor Bill Ackman reached a deal to name four new board members, including two aligned with Ackman’s hedge fund, Pershing Square. What’s in it for Chipotle? Ackman will limit his maximum stake in the company, and he’ll keep all activist comments on the down low for the next two years. In a year that’s seen Chipotle stock down 30% from a food safety crisis while Ackman has been destroyed on his Valeant position, joining forces might spell redemption in the new year.
Trouble in Board of Directors Paradise
…The Redstone saga continues. Viacom (+0.89%), the media giant that owns networks like MTV and Comedy Central, has been in a leadership struggle for most of 2016. To sum it up: 93-year-old Sumner Redstone and his daughter, Shari, ousted former Viacom CEO Philippe Dauman earlier this year, claiming that Sumner was unfit to lead the business due to mental incompetency. Here’s the real kicker, though: many believe that Shari has been manipulating her father to wrestle control of the company. Power play or not, Shari’s come out on top—Sumner Redstone has announced that he will step down from Viacom’s board in February, leaving Shari in charge of National Amusements, the company that owns 80% of Viacom and CBS.
Mylan Has Its Own Saga Too
…Remember Mylan (+0.16%), the controversial maker of the EpiPen? Well, Mylan is hoping it’s not too late to say sorry—the company announced that it will release a generic version of the EpiPen that will cost half of the current $600 brand price. It might not be enough to appease everyone, though—20 U.S. states filed a joint lawsuit on Thursday, targeting generic drugmakers like Mylan and Teva for accusations of price-fixing. So yes, it might be a bit too late to say sorry.
Vine Rises from the Dead
…Kind of. Twitter (-0.80%) announced on Friday that it actually won’t be entirely killing Vine. Remember, Twitter bought the six-second video app back in 2012, but announced a few months ago it would be shutting it down amidst lagging growth. Not so fast though—instead, Twitter will actually be releasing a new app in January called Vine Camera. Vine Camera will allow users to create videos like before, but there won’t be a Vine feed within the app itself. And if you’re Vine-famous, don’t fear, your videos aren’t going anywhere: the company has announced plans for a Vine archive. Twitter CEO Jack Dorsey maintains that profitability is paramount on the company’s checklist for 2017. Vine may have proved to be too expensive for the company to maintain, but it’s just too fun to do away with entirely.
It Was Fun While It Lasted
…U.S. housing starts ended their winning streak in November. Homebuilding took a tumble last month, falling 18.7% in November from its nine-year high and undoing many of October’s gains. Should you be worried? Not yet—housing permits (which give permission to start construction of future homes) still looked solid for November, hitting a nine-year high. This signals that plans for homebuilding are underway even though the actual construction hasn’t started yet, giving us reason to shake off the drop in housing starts. The dip also follows super strong October numbers, so it still fits in with overall trends of gradual growth and increasing demand in the housing market. Long story short, no need to be spooked.
Other Stories
Economic Calendar
Is It Christmas Yet?
According to most workers, the answer is basically yes. Peakon, a Danish start-up, surveyed 3,000 British workers about their work mindset around the holidays. The results showed that most workers check out over a week before Christmas. So if you’re reading this at work and your mind is already on the holidays, you aren’t alone. Here are the facts:
Interview Question of the Day
How do interest rates affect a bond’s coupon rate? (Answer)
Startup of the Day
Airbnb, everyone’s favorite hospitality disrupter, has filed for another $153 million in Series F funding. At a valuation of around $30 billion, Airbnb trails only Uber in the U.S. startup rankings. What does this funding filing tell us? Looks like Airbnb won’t be having its IPO anytime soon.
Food for Thought
Fact or fiction? China owns the most U.S. debt. Fiction! Technically, Americans and the U.S. government hold the most U.S. debt. But until October, China was the largest foreign holder of U.S. debt with around $1.3 trillion. Now what country holds the American foreign debt crown? Japan, with $1.13 trillion compared to China’s $1.12 trillion.
