Author: Ken Martin

DIS – Disney World unions say no to latest contract offer

Written by Ken Martin on . Posted in DIS, Stock Report.

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It is back to the drawing board for Disney and its union members at Walt Disney World.

Union members voted down a contract proposal covering tens of thousands of service workers at the Florida theme park.

The proposal reportedly didn’t go far enough toward helping employees face cost-of-living hikes in housing and other expenses.

The unions said 13,650 out of 14,263 members who voted on the contract on Friday rejected the proposal.

GROUP OF UNIONS CALL ON DISNEY WORKERS THEY REPRESENT TO VOTE AGAINST CONTRACT OFFER

Walt Disney and Mickey Mouse in front of the Cinderella castle

Theme park guests walk near a statue of Walt Disney and Mickey Mouse in front of the Cinderella castle in the Magic Kingdom at Walt Disney World in Lake Buena Vista, Fla.  (AP Images)

Talks on a new deal have been going on since August.

The contract covers around 45,000 service workers at the resort outside Orlando.

Disney World service workers who are in the six unions that make up 

The Service Trades Council Union coalition had been demanding a starting minimum wage jump to at least $18 an hour in the first year of the contract, up from the starting minimum wage of $15 an hour in the previous contract.

The proposal rejected on Friday would have raised the starting minimum wage to $20 an hour for all service workers by the last year of the five-year contract, an increase of $1 each year for a majority of the workers it covered. 

DISNEY A FOCUS OF FLORIDA SPECIAL LEGISLATIVE SESSION NEXT WEEK

Certain positions, like housekeepers, bus drivers and culinary jobs, would start immediately at a minimum of $20 under the proposal.

A cast member at Walt Disney World

Union members voted down a contract proposal covering tens of thousands of Walt Disney World service workers,  ((Photo by Matt Stroshane/Walt Disney World Resort via Getty Images) / Getty Images)

The company said that the proposal had offered a quarter of those covered by the contract an hourly wage of $20 in its first year, eight weeks of paid time off for a new child, maintenance of a pension and the introduction of a 401K plan.

“Our strong offer provides more than 30,000 Cast Members a nearly 10% on average raise immediately, as well as retroactive increased pay in their paychecks, and we are disappointed that those increases are now delayed,” Disney spokesperson Andrea Finger said in a statement.

The Florida Legislature will convene this coming week to take up the issue of a state takeover of Disney World’s self-governing district. 

FLORIDA MAY REVERSE DECISION ON DISNEY’S REEDY CREEK DISTRICT: REPORT

Reedy Creek sign

Reedy Creek Improvement District Fire Department Station 4, on Dec. 8, 2021.  (Ricardo Ramirez Buxeda/Orlando Sentinel/Tribune News Service via Getty Images / Getty Images)

In April, the Florida legislature voted to dissolve Disney’s 55-year-old special tax district following a public feud between Gov. Ron DeSantis and then-chief executive Bob Chapek.

That district allows Disney to tax itself to cover the costs of providing water, power, roads and fire services in the area.

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The conflict was over a new state law restricting discussion of LGBTQ issues in classrooms. 

Ticker Security Last Change Change %
DIS THE WALT DISNEY CO. 110.71 -2.50 -2.21%

Chapek stepped down from the position, with former CEO Bob Iger returning, and it’s believed his return will help pave the way for a resolution.

The Associated Press contributed to this report.

INTC – Intel slashes some worker, exec pay following PC market fall: report

Written by Ken Martin on . Posted in INTC, Stock Report.

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Intel Corp has taken the net step following the release of a disappointing earnings report last week.

The chipmaker has made broad cuts to employee and executive pay.

Last week, Intel issued a lower-than-expected sales forecast driven by a loss of market share to rivals and a PC market downturn.

The reductions will range from 5% of base pay for mid-level employees to 25% for Chief Executive Pat Gelsinger.

FOR CHIP MAKERS, THE FLIP FROM SHORTAGE TO GLUT INTENSIFIES

Intel ceo

Intel CEO Pat Gelsinger (Fox Business Travel)

The company’s hourly workforce’s pay will not be cut, said a person familiar with the matter who was not authorized to speak publicly.

Intel spokesperson Addy Burr said in a statement that the “changes are designed to impact our executive population more significantly and will help support the investments and overall workforce.”

Last week, Intel said its profit margins were plunging as the PC market cooled after several years of growth during the pandemic.

INTEL TO CUT THOUSANDS OF JOBS AS PC DEMAND SLOWS: REPORT

Intel chips

Intel logo and semiconductors (istock / iStock)

Gelsinger also conceded that Intel has “stumbled” and lost market share to rivals.

Advanced Micro Devices said Tuesday that quarterly sales were above Wall Street’s expectations.

In addition to the mid-level pay cuts, vice president level employees will see 10% reductions, and the company’s top executives other than the CEO will get 15% cuts.

Intel chips

Intel Processor Core i5 2500K (iStock / iStock)

INTEL SHARES HAVING WORST DAY IN 15 MONTHS

The company has also lowered its 401(k) matching program from 5% to 2.5% and suspended merit raises and quarterly performance bonuses, the person said.

Ticker Security Last Change Change %
INTC INTEL CORP. 28.26 +0.31 +1.11%
AMD ADVANCED MICRO DEVICES INC. 75.15 +2.70 +3.73%

Annual performance bonuses based Intel’s overall financial performance will remain, although they are expected to be lower.

Reuters contributed to this report.

AMZN – Amazon axes free grocery delivery on some Prime orders

Written by Ken Martin on . Posted in AMZN, Stock Report.

Public Ventures President Lou Basenese joins ‘Varney & Co.’ to discuss the markets and how Microsoft’s performance could impact tech and Amazon shares.

Amazon Prime members will no longer get free delivery on some grocery orders starting next month.

Amazon Fresh orders under $150 will no longer qualify for free delivery.

Customers will be charged between $3.95 and $9.95, depending on the order size, the company said in an email to Prime members Friday.

The new policy starts February 28.

AMAZON BEGINS CUTTING 18,000 WORKERS IN ITS BIGGEST LAYOFFS EVER

Amazon Fresh truck

An “Amazon Fresh” delivery truck is seen parked in Brooklyn, New York. (REUTERS/Brendan McDermid / Reuters Photos)

Right now, the company offers members free grocery deliveries on orders above $35, except for New York, where it’s $50.

“We will continue to offer convenient two-hour delivery windows for all orders, and customers in some areas will be able to select a longer, six-hour delivery window for a reduced fee,” Amazon said in the email.

Amazon Fresh delivery

An Amazon worker delivers groceries from the Amazon Fresh service in the Brooklyn Borough of New York. (REUTERS/Brendan McDermid  / Reuters Photos)

Prime has more than 200 million members worldwide who pay $139 a year, or $14.99 a month.

AMAZON SELLING BAY AREA OFFICES TO UNWIND COVID EXPANSION

Under the new policy, the company said delivery charges will be $3.95 for orders between $100-$150, $6.95 for orders of $50 to $100, and $9.95 for orders under $50. Amazon Fresh deliveries over $150 will remain free.

Amazon Fresh sign

Amazon Fresh Pickup Store Opens in the Ballard Neighborhood of Seattle, Washington (iStock / iStock)

The move comes as the company looks to trim costs in the current economic environment.

AMAZON SHUTTING DOWN AMAZONSMILE CHARITABLE PROGRAM

Amazon joined numerous companies this month, cutting its workforce.

Ticker Security Last Change Change %
AMZN AMAZON.COM INC. 102.24 +3.02 +3.04%

The ecommerce giant announced it has axed unprofitable areas of its business, paused hiring and layed off 18,000 workers.

The Associated Press contributed this report.

HOOD – Robinhood prices IPO at $38 per share raising $2B

Written by Ken Martin on . Posted in HOOD, Stock Report.

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Robinhood Markets Inc. will begin trading as a public company on Thursday following the pricing of its initial public offering.

The company says it priced 55 million shares at $38 a share, which comes in at the low end of the $38 to $42 offering range.

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 The offering should raise more than $2 billion and puts Robinhood’s valuation at about $32 billion.

This makes it one of the most valuable U.S. companies to have gone public year-to-date, according to Reuters.

The offering breakdown involves 52,375,000 shares from Robinhood and 2,625,000 shares are being offered by existing stockholders.

The shares are expected to begin trading on the Nasdaq under the ticker symbol “HOOD.”

The Robinhood IPO is being led by Goldman Sachs Group Inc. and JPMorgan Chase & Co.

ROBINHOOD’S IPO: FIVE FACTS ABOUT THE TRADING APP

In seven years, Robinhood has gone from its launch as a startup to an IPO.

It currently has a total of 17.7 million monthly active users and manages more than $80 billion in assets.

The company estimates second-quarter revenue between $546 million and $574 million and a net loss between $487 million and $537 million. It also forecasts a total of 21.3 million monthly active users.

Robinhood jumped into the spotlight earlier this year when millions of amateur investors downloaded its app to participate in the explosive rally in meme stocks like GameStop.

ROBINHOOD CEO INTERESTED IN OFFERING RETIREMENT ACCOUNTS

The company made the decision to restrict trading in as many as 50 stocks, including GameStop and AMC Entertainment Holdings. The move was made after a surge in trading volume strained its abilities to cover clearinghouse deposit requirements. The company was forced to raise $4 billion from early investors in order to meet the requirements.

Robinhood has faced a wave of legal trouble in the past year, some of which contributed to a record $70 million fine in June to settle Financial Industry Regulatory Authority allegations that the company misled investors about margin trading and was lax in its oversight of approvals for options traders.

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It also reached a $65 million settlement with the Securities and Exchange Commission in September after allegations the company misled investors on how it made money and for failing to get the best price for customer orders. In both cases, Robinhood has neither admitted nor denied wrongdoing. 

SBUX – Starbucks shares fall on reduced China outlook

Written by Ken Martin on . Posted in SBUX, Stock Report.

Belpointe chief strategist David Nelson, Gibbs Wealth Management President Erin Gibbs and Invest Diva CEO and author Kiana Danial break down today’s markets, cryptocurrency and this earnings season. 

Starbucks shares fell 3% in the after-hours session after the company lowered its sales growth forecast for China, its second-largest market outside the U.S.

The Seattle-based coffee giant said its revenue soared 78% to $7.5 billion in the April-June period, an all-time high, as the impact of the coronavirus pandemic receded and customers flocked to its stores.

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The results beat Wall Street’s forecast of $7.3 billion, according to analysts polled by FactSet.

Starbucks said its global same-store sales – or sales at locations open at least a year – jumped 73% from the same period last year. 

Ticker Security Last Change Change %
SBUX STARBUCKS CORP. 126.03 -0.03 -0.02%

The pandemic hit Starbucks hardest in the April-June period last year, when many stores were closed and same-store sales tumbled 40%.

Same-store sales jumped 83% in the U.S. in the fiscal third quarter. 

Sales of higher-priced drinks – like cold brews and alternative milk beverages helped sales, as did higher demand for food items.

STARBUCKS LAUNCHES DONATION PROGRAM AS FOOD INSECURITY HITS RECORD

The concern in the report came in results in China, where same-store sales increased at a lower-than-expected pace of 19%. Starbucks also lowered its full-year sales forecast for China, saying it now expects growth of 18% to 20%, down from 27% to 32%.

The company said travel restrictions have had an impact.

Starbucks CEO Kevin Johnson forcefully defended the company’s performance, saying Starbucks will continue to see robust growth in China as it opens new stores. The company plans to open 600 stores in China in its 2021 fiscal year.

HOW STARBUCKS WILL CAPITALIZE ON THE POST-PANDEMIC COFFEE BREAK

“There should be no misunderstanding of how big and robust our business in China is and will be,” he said.

Starbucks reported net income of $1.15 billion for its fiscal third quarter. Adjusted for one-time items, the company earned a record $1.01 per share. That was well ahead of analysts’ forecast of 78 cents.

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The company said it now expects global same-store sales growth of 20% to 21%, up from a range of 18% to 23%. It also expects adjusted earnings of $3.20 to $3.25 per share, up from $2.90 to $3.00.

The Associated Press contributed to this report.

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