Hey Snackers,
Democracy is up for sale. The whole website: www.Democracy.com. Minimum bid is $300K and the auction to own Democracy.com ends on 10/25.
The Dow dropped a hefty 150 points Tuesday because investors aren't feeling optimistic about this week's critical US/China trade negotiations.
Toss some mozzarella on the wounds... Domino's shares ended the day up 5%, but it's stuck in the middle of 2 wars right now: #1 is the "The Pizza Wars." They caused the carb-packed chain's quarterly sales to slow to just 2.4% growth. Here's how the competition and their stocks are doing this year:
#2 is The Delivery Wars... Domino's is stuck in them too. Postmates, DoorDash, GrubHub, and Uber Eats are delivering pizza — and gyros. And quinoa salads. And late-night grilled cheese. The optionality of 3rd party delivery apps are snagging loyalty from hangry 20-somethings. The Domino's faithful like to mix up dinner every now and then.
Search for your profit puppy... Domino's profit-driving revenue source is “carryout.” That's the same thing as takeout or pickup, but Domino's CEO dropped the term 17 times on the earnings call. Carryout makes up 45% of Dom's sales and is more profitable than delivery because they don't have to pay a delivery driver. The CEO's plan for more carryout is why investors bought up Domino's shares Tuesday.
The tweet heard 'round the C-suite... Heading into the weekend, the Houston Rockets basketball team's GM tweeted support for Hong Kong's pro-democracy protestors resisting political influence from China's Communist Party. Hong Kong is part of China, but a different political system. It's a sensitive subject for Beijing, so China responded hard (and here's mainland China's perspective as told by the Brooklyn Nets' owner).
American execs have a history of sucking up to China's government... to gain access to its 1.4B potential Starbucks-sipping customers. US CEOs tolerated trade rule-breaking and turned their heads to human rights abuses. Zuck even learned Mandarin to try to get Facebook un-banned in China (he failed).
China effectively censors American business speech... It's famous for its Great Firewall, which tightly controls online information throughout the country (ironically, the Chinese people couldn't be offended by the tweet because Twitter is banned in China). And cameras are everywhere (all 200M of them installed by China's government). But American businesses are increasingly careful to say things critical of China in fear of economic punishment. Even if it's less than 280 characters.
Message to J&J's lawyers: Don't expect a bonus... A jury just told America's biggest medical and home goods company to pay 1 man $8B. It's compensation for damages related to a Johnson & Johnson drug he took as a boy that was supposed to treat psychoactive issues, but also enlarged his breasts. J&J is calling the payout "excessive" and is appealing.
Law & Order gets 0 stars at J&J... The drug in question is Risperdal, which was one of J&J's profit puppies before its patent expired. It's not the only J&J creation that used to make profits but now makes lawsuits:
Company culture tip: Welcome the bad news... Don't hide it. In many of these companies-getting-sued stories, there's an element of companies' awareness of their products' harmful impacts on society, then burying the info skin-deep to preserve profits. Instead, management can encourage whistle-blowers — that could prevent future lawsuits (the plaintiffs' lawyers end up discovering the smoking pills anyway).
Disclosure: Authors of this Snacks own shares of Alibaba
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