Business

China surprises everyone and devalues the yuan

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As has previously been reported both on this site, and elsewhere, it has been an interesting summer for the Chinese economy. And with an announcement coming today out of Hong Kong that seems to have surprised truly everyone, that trend continues.

Indeed, as is being reported by CNN Money and other sources, the Chinese government has moved to devalue the yuan, as the People’s Bank of China is allowing the currency to depreciate close to 2% against the US dollar they announced Tuesday. The purpose for doing this, of course, is to keep export prices attractive, as that sector of the Chinese economy composes about 19% of total GDP.

But of course, the concern here, as alluded to in the embedded video, is a currency war. If China, the largest exporter in their region, has now devalued their currency close to 2%, will other exporters like Viet Nam and Japan be forced to as well? Mr. Woo, in the video, alludes that the effects might be felt as far as European countries like Germany, who’s exports to China account for around 3% of their respective GDP.

China has announced though, that this is a one-time-only move, necessitated by a recent policy change that stipulated that the PBOC will no longer set a daily midpoint value on the yuan, instead setting the price according the previous day’s closing value.

Warren Buffett executes huge, cash deal for Precision Castparts

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Warren Buffett is known as a brilliant investor, not a flashy one. And his latest deal, the second largest in the history of Berkshire Hathaway, follows not only that one, but many of the legendary investors principles.

As first reported by Bloomberg, and other sources, the investment company, headed up by Buffett, will acquire a leading aerospace hardware supplier, Precision Castparts, for $37.2 billion; almost half of Berkshire Hathaway’s cash.

But although the investment is a substantial one, it appears to be a relatively safe one as well. Precision Castparts pulls in close to $3 billion in pre-tax profits per year, so from a cash flow perspective, this is right in line with where it should be. Furthermore, the company is in an industry with little competition, and has actually moved to successfully acquire many of the competitors they do have, so their marketshare is solid as well. They serve the biggest companies in the aerospace field, including Airbus and Boeing, and obviously, the aerospace hardware industry obviously has some pretty high barriers to entry. Analysts don’t expect Buffet to make many major changes to the operations of his newly acquired company, and his history would support those claims.

The move is indicative of a major change for Berkshire Hathaway though, as the company continues to pivot away from picking stocks, to fully acquiring entire companies. What do you think of the new move? Another savvy one by Buffett, it appears to be.

Philanthropic new start up model begins to take hold

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Via: Source

In recent years, start up companies like Tom’s Shoes and Warby Parker glasses have taken off, not only because they provide stylish goods at affordable price points, but also because they offer a unique bonus for each purchase their customers make.

Both companies have a huge charitable aspect to them; for each pair of shoes Tom’s sells, a child in need gets a pair as well. Same for Warby Parker, except with their glasses. Truly a win-win-win situation.

Now another company is joining the ranks of these philanthropically-minded start ups, a backpack company called Just Porter. Started in 2006 by Chris Bahr, the company was inspired by a humantarian trip Bahr took to the Philippines. While there, he had the idea one day to buy some school supplies for the local children.

(Via LinkedIn)

How happy the children were to receive his donations stuck with Bahr, and now 9 years later, whenever one of his backpacks is sold, the company donates one, filled with school supplies to a child in need. And, business is good.

As we said before, it truly is a win-win-win situation.

1st Apple Watch sales metrics start to accumulate

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Via: Source

For well over a decade now Apple has seemed to be able to do now wrong. Preceding even the iPod was the legendary series of colorful iMac computers which really put the company back on the map following Steve Jobs’ return after his previous ousting.

Remember these? (Via Creative Review UK)

Then, in 2001, began the reign of ‘i’ products, a reign which continues to this day as the iPhone continues to absorb an ever-increasing share of the smartphone market. The traditional iPod is actually now out of production, but other versions of the product like the Touch continue to be a solid revenue stream for the tech giant.

However, one of Apple’s most recent products may not be joining the legendary ranks of these products that became so successful and popular that they have quite literally changed the way we live our lives everyday. And that entry is the Apple Watch.

While Apple has released no official sales numbers on their watch as of this writing, their suppliers have been releasing data, and it’s not painting the prettiest of pictures for the success of the watch thus far.

Advanced Semiconductor Engineering, a Taiwan-based company that packages and produces semiconductors for Apple products, has recently announced that they did not hit their break-even mark of 2 million units per month in the second quarter, and that it also did not expect to hit that mark during the holiday-laden third quarter, either.

In terms of what this means for Apple, there are a few theories. Perhaps wearable technology is still a year or two away from true market integration? Perhaps the functions of the device have not been made impactful enough? Would calling the device an ‘iWatch’ have helped with branding? Either way, the success of any one Apple product does not make or break the company. Not even close.

Ferrari set to file for IPO

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Via: Source

Even if you can’t quite afford one of the legendary Italian supercars, you may soon still be able to own a piece of Ferrari itself. No, there’s not some new supercar-crowdfunding/crowdsharing app (dibs that idea) set to debut, but in fact, the legendary automaker is set to become a publicly traded company for the first time in their illustrious history. Let’s take a look at some of the facts on Ferrari ahead of the IPO.

The question investors ponder with Ferrari is simply, is this a good investment? Or is this simply an investment everyone is going to WANT to make. Or does that fact that everyone is going to likely want in on the Ferrari action make it a good play in itself? Indeed, there is a lot to consider.

Ferrari is a relatively unique automaker. They produce at an incredibly low volume compared to many other automakers (shipping just under 8,000 cars last year, as compared to over 36,000 shipped by Maserati), which makes their main customer base of serious collectors, enthusiasts, and actual performance and race car drivers incredibly loyal. But of course, low output can also put a limit on profits, although the company has always performed more than solidly in the past.

This IPO deal is interesting for another reason as well. It is mainly being done to decouple Ferrari from FCA, which currently owns 90% of the company, the other 10% being owned by Piero Ferrari, son of the company’s founder. After the deal, roughly 80% of equity will be in the hands of shareholders. What do you think? Is Ferrari a good long-term stock pick? Or would you be better off simply saving up for one of the gorgeous vehicles?

FINALLY a real-life hoverboard is set to debut

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As one astute comedian recently observed on Twitter, “They should go back and remake Back to the Future except instead of having hoverboards in 2015, everyone’s just offended by everything.”

That iconic movie sees Marty McFly travel ahead to 2015 (or was that Back to the Future 2?), where he uses, amongst other awesome things we don’t have yet, a hoverboard. But it appears that fact has finally caught up to fiction, and a real-life hoverboard will be arriving soon. Developing by Lexus, not too much is known about the device as of this writing. But, a new teaser video dropped online ahead of the products August 5th launch, which we have here for you below.

1stDibs is a website with an awesome name; even cooler purpose

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Via: Source

Filling in a digital space unfulfilled by eBay, Amazon, or any other online marketplace, website 1stDibs was created all the way back in 2001 to serve a different purpose; replicate the finest art gallery or auction house experience all online. Connecting art dealers with clients seeking their wares all across the globe seemed like an obscure mission a decade ago, but now, 1stDibs is uniquely, and excellently positioned to almost exclusively serve a huge market. How exactly did they do it?

Via: Sparkcapital.com

Indeed, as was previously mentioned, the company started all the way back in 2001; and from the get-go, the site sought to replicate the legendary Parisian Marche aux Puces; open air markets filled with art of all kinds. And now, close to 15 years later, the company has evolved into the leading online market place for fine art, furniture, jewelry, and other treasures; all listed by some of the best-known, and most reputable dealers in the world.

The company, now guided by CEO David Rosenblatt, removed dozens of pain points that kept both art dealers and collectors from having access to collections around the world, whether they are on the buying, or selling side. It is an area with a lot of demand, and not a lot of direct competition for 1stDibs, making them an incredibly interesting company to keep an eye on.

Colin Cowherd latest controversial figure to leave ESPN

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Via: Source

It’s been an up and down year for the Worldwide Leader in Sports, as a number of trends, and industry movements, seem to have created a tough set of circumstances for the now close to 40 year old company. And the latest symptom of these interesting and evolving times at ESPN is the departure of Colin Cowherd, the controversial but popular radio host who helps anchor their national morning lineup.

Radio host Colin Cowherd formerly of ESPN

Joining the likes of Bill Simmons and Keith Olbermann amongst the recently departed ESPN ranks, Cowherd finally was let go last week after a series of controversial remarks about Dominican people, which he did not apologize for. He was set to leave to company a week later after contract negotiations failed to produce a new deal between Cowherd and the company anyway, but the entire situation comes as somewhat of a surprise to fans of his 12 year run at the company.

But what do all these departures mean for ESPN? The company has undoubtedly led the way in cable sports coverage for the past few decades, a market area which has become increasingly valuable as almost everything beyond live sports is consumed along viewers own schedules; on demand, or via streaming online. Cable cutting is proving to be an issue for ESPN as people rely less and less on traditional cable packages, and more competition means more landing places for on-air ESPN personalities, even if in these cases, they only made Cowherd an offer to stay, and not the other two journalists.

Google to decouple a number of features from Google+

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It goes pretty much without saying at this point that Google+ hasn’t quite evolved into what Google had probably hoped it would have when they launched the site back in 2011. And now, a little more than four years after the initial launch date (there was an invite-only structure for a number of months before), it appears that the company might be making some moves to scale back that operation.

Via Social Media Biz

As reported by Tech Crunch, a number of functionalities and features are being disconnected from the site. In a few months, you’ll no longer need a Google+ profile to comment on Youtube videos (congratulations, trolls), and Google Photos is being phased out of the site as well.

Google+ will continue on though, with a closer focus on “becoming a place where people engage around their shared interests, with the content and people who inspire them,” as according to Google VP of Streams, Photos, and Sharing, Bradley Horowitz. This likely means a renewed focus on Google+ Collections and Hangouts.

Twitter Founder Jack Dorsey’s other company, Square, to file for IPO

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Via: Source

The man has had somewhat of a magic touch these past few years, as recently returned Twitter interim CEO Jack Dorsey is in line for another pay day courtesy of his mobile payments device and app, Square.

Via Business Insider

As of this writing, not much in known about the offering, as it was filed confidentially. This leaves investors guessing as to the exact value of the company, and how many shares will be available.

However, the mobile payments company, which provides business owners with a straight forward, customer-friendly system to accept credit and debit cards via a smart phone and tablet app, and card-swiping tool (as seen in the picture), processed over $30 billion in payments last year. So if and when it does become publicly traded, investors will certainly be clamoring for a piece of the action.