Daily Archives

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Mid caps

L Brands is shutting down this store after 123 years in business

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If you are unfamiliar with Henri Bendel… don’t worry because most people are in the same boat. The brand was founded in 1895 and became best-known for its designer purses and shoes. L Brands, the owner of big-time brands like Victoria’s Secret and Bath & Body Works, acquired Henri Bendel around 30 years ago.

 

And after 123 years in business… the company will be closing up shop in its remaining 23 locations, including its iconic Saks Fifth Avenue spot which opened way back in 1913. This move comes at a time where L Brands stock is down 55% on the year; that number alone is pretty bad, but those results are magnified by the fact other retailers are having record-breaking years.

 

Here’s why they are shutting down… L Brands is trying to “improve company profitability and focus on our larger brands that have greater growth potential.” Sound familiar? This is something we have seen play out multiple times this year – companies cutting ties with weaker brands and going all-in on what’s working (or sort of working). Still, 123 years is one helluva run.

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Miscellaneous

Chill, man…legalizing marijuana takes time

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Legalizing weed… is not as easy as it sounds. Believe it or not, Uruguay was the first country to legalize the drug nationally in 2013. And Uruguay wants to do things the right way; but doing things the “right way” involves a lot of time and restrictions to show everyone that the country itself is in control of the system. This means only 14 pharmacies in the entire country can legally sell marijuana.

 

Here are the issues… first, only two companies are licensed to grow in Uruguay, Symbiosis and Iccorp. Next is the fact that pharmacies in Uruguay go through United States banks which cannot serve accounts that are involved in the marijuana biz.  This means marijuana transactions must be cash-only which has presented a barrier for most pharmacies to get involved. But if more do get involved, the currently supply will not be enough from just two distributors.

 

Drug dealers hate it… because regulated cannabis has slowed the black market for it down – it is estimated about 55% of marijuana users are using the regulating system to get their fix. Marijuana is also priced in-line with the black market to hinder competition from illegal sources. So some good has come out of legalization after all; but the other “good” things will take time…

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Blue Chip

SpaceX might just send YOU to space – find out today

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SpaceX has its first victim… er, passenger, we should say. That’s right – the first person to fly around the moon in the company’s BFR has been selected. What is a BFR, you ask? It is the ‘Big Falcon Rocket’ which consists of two parts: A massive rocket booster that will out-power anything every built and a spacecraft that will shoot right out of the Earth’s atmosphere – brought to you by SpaceX.

 

Today’s announcement marks the first steps… to sending regular people to the moon and SpaceX will be identifying the first person to go today! Up to this point, Elon Musk has kept quiet about the identity of this individual and the financial terms of the deal.

 

Don’t get too excited… because the BFR is probably several years away from its initial flight. However, the spaceship portion of the rocket could start testing as soon as 2019. SpaceX COO said that the rocket is likely to take flight within a decade, which probably a more realistic timeline given Musk’s overly-optimistic way of thinking. So it is probably more than several years away…

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Blue Chip

The ‘Tesla Fighter’ stock is waaay up!

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Nio has hit the NYSE… and shares were up 76% on Thursday, just the second day of trading. These results are particularly interesting because Nio had to lower their IPO to the lower end of their price range before the big day. On the first day of trading, the stock closed up 5% but was down as much as 15%.

 

Nio is just four years old… and is the company that vows to battle Tesla in China, the world’s most significant electric vehicle market. The company has investors that include Tencent and Baidu and now has $1 billion from the IPO. Still, the electric-car company remains small in scale, but certainly has huge aspirations for the future.

 

It could be a bumpy road ahead… for Nio which is entering a market with fierce competitors that include Tesla, Byd (which Warren Buffet invests in), and Byton. Volkswagen and Ford are also eyeing the electric car market, and specifically in China. But if everyone let ‘too much’ competition stop them, where we would be today?

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