Archive by Author | wilsontang1

Glencore CEO Seeks to Win Over Investors With Dividends

Glencore Xstrata Plc, the largest zinc and stream-coal exporter is looking into a new plan to draw in investors to help the company grow. They are currently working with a plan to increase dividend and share buybacks. Glencore Xstrata assures that investors will receive the return they seek because they pride themselves in investing in only assets that give a good return. Ivan Glasenberg, the Chief Executive Officer of Glencore Xstrata states that the company will give good returns even at the cost of downsizing the company or the company taking the loss opposed to the investors. The company may be able to execute this new special dividend plan by as early as 2014 as revenue is expected to exceed analyst expectations, coming in well above the target of $500 million a year.

Glencore Xstrata’s developing plan for special dividends will make investors happy. The appeal of knowing that a company is doing all they can to give back as much as they can to investors is extremely attractive for investors looking to make gains. The fostering of Gencore Xstrata, a mining company forecasts a economic expansion and creation of more jobs.

Written by: Wilson Tang

Source:

http://www.bloomberg.com/news/2013-05-03/glencore-ceo-seeks-to-win-over-investors-with-special-dividends.html

Hedge Fund Trader Is Sentenced to 4 1/2 Years in Insider Case

Another hedge fund trader was recently sentenced for insider trading. Todd Newman the latest member to who got caught for insider trading traded at Diamondback Capital Management earned more than $10 million in just five years of work. The insider case focused mainly on Todd Newman’s insider trading on NVIDIA and Dell. Trading on insider information, Todd Newman with six others earned an estimated $70 million. It seems like no matter how many hedge fund traders get caught with insider trading, people just don’t learn. Trading on insider information is not only unfair but also comes with severe consequences. As Todd Newman stood before the judge, he was sentenced with four and a half years of prison term.

In my opinion, trading on insider information is not a good tactic for making money. Most hedge fund managers trade on insider information because it is easy money but they don’t realize that if they get caught, all of it would have been in vain. Most of the cases involving insider trading results in pleading guilty because there is no defense against it. Not only is insider trading illegal, it has a detrimental effect on the economy. It can shut down businesses and costs families their fortune.

Written by: Wilson Tang

Source:

http://dealbook.nytimes.com/2013/05/02/hedge-fund-trader-sentenced-to-4-12-years-in-insider-case/?ref=business

Thats It In a Nut Shell

There is an increasing alliance on natural gas over oil and Royal Dutch Shell Company has more at stake than any other “petroleum player”. In order to obtain the gas more efficiently, more and more companies are supercooling it to turn it into liquid form and then transporting it on special ships. Shell has already invested about $40 billion in liquefied natural gas, or LNG, plus its production plants, storage terminals and related systems, and plans to continue investing their resources into the business.

Shell is placing its bets on locations like Qatar and focusing on bringing gas to energy-hungry destinations like China and Japan. Experts are expecting an initial decline in Shell’s successes because of disruptions in their natural gas reserves Nigeria, but eventually Shell may eventually show big benefits from its natural gas emphasis. S of right now, Shell holds 7 percent of the worlds LNG business, but ambitiously stated that they plan to double that amount through new projects and acquisitions.

 

Written by Wilson Tang

Source:

http://www.nytimes.com/2013/05/02/business/energy-environment/02iht-shell02.html?ref=business&_r=1&

Price Matching Criticized From Wal-Mart to Toys ‘R’ Us: Retail

In the weak economy today, many businesses are forced to turn to price matching policies to attract new customers or just keep customers loyal. Despite promoting ads that price matching is guaranteed, many businesses have been heavily criticized for it. The price matching program is definitely not easy to follow through because of the many factors that need to be accounted for but that is no excuse to only execute the program when wanted. The price matching program should have a standard so that it is fair for all customers. Customers of Wal-Mart and Toys“R”Us have complained that the policy is very inconsistent and that even workers don’t fully understand the price matching program. Answers could vary from store to store and even one day from another.

In the current economy, it is extremely important to keep your customers loyal. People are always seeking for the lowest prices and with the internet, low prices are everywhere. There should be a established standard so that all stores with price matching programs are executing it the right way. The current price matching program is not only not effective but also turning some loyal customers away.

Written by: Wilson Tang

Source:

http://www.bloomberg.com/news/2013-04-30/price-matching-criticized-from-wal-mart-to-toys-r-us-retail.html

Ex-KPMG Partner London Will Plead Guilty, Lawyer Says

Scott London, the ex-partner of KMPG is going to plead guilty in his case involving insider trading. The recent scheme where Scott London committed insider trading could have had dire consequences but luckily London is willing to suffer the consequences of his actions. London’s plan to please guilty will save the trouble of carrying out hundreds of audits and potentially crashing the stock market. Information on Herbalife was passed on to a client saying that the company will go private and the client should start buying the stock in small blocks to avoid suspicion. London then assures his client that “that’s going to be where you make a ton of money”. If convicted, London could face up to 5 years in prison and he is currently on a $150,000 bail.

Based on London’s actions and consequences, insider trading is not only unethical but illegal. Although it is possible to make a ton of money with little to no effort, the chances of escaping with no consequences are close to zero.  I believe, as an accountant, being ethical is one of the higher priorities. The whole business world revolves around accountants and their practices, so without a public trust in the accounting field, the commercial world will not function.

Written by: Wilson Tang

Source:

http://www.bloomberg.com/news/2013-04-11/ex-kpmg-partner-london-will-plead-guilty-lawyer-says.html

Apple Returning $55 Billion to Investors as Forecast Trails

Apple whose growth has been slowly declining over a period of time said they will return $55 billion to shareholders to compensate for the declining stocks. Rated as AA+ by Standard & Poor’s the stock is not doing as predicted. Based on the reported financial figures, Apple stocks have dropped 24% since this year. Apple sales are also lower than anticipated especially with the release of the Galaxy S4 which has stolen a portion of the market share. With Investors worried, Apple plans to release new products later this year. Compared to Samsung which has a wide variety of products, Apple is much more limited. Apple has reported that the company is currently working on new products such that involve televisions and watches.

One of the fastest growing companies is now on the path of decline. With the release of new and more innovative products by competitors it is a lot more common to see customers are switching over to Samsung and Google operated devices. Investing into a wide variety of unique products is definitely a smart investment on Apple’s part because having options and variety is what’s driving customers away from Apple to Samsung and Google operated devices.

Written by: Wilson Tang

Sou http://www.bloomberg.com/news/2013-04-23/apple-forecasts-sales-below-estimates-boosts-dividend-buybacks.htmlrce:

New York City Employee Pension Funds Sue BP Over Gulf Oil Spill

BP is being sued by the New York City pension funds for $39 million. The New York City pension funds claims that BP misled investors that led to over $39 million in investment losses. Going back to 2010, BP’s deep water horizon drilling rig caused 4 million barrels of oil to be spilled into the Gulf killing 11 workers in the process. The spill was ranked as the biggest spill in U.S history, yet BP misled their investors by reporting minimized damages and costs to shareholders. This is not the first case involved with BP. Last year BP paid 8.5 billion to settle several cases and $4 billion to the U.S government for criminal penalties. A $17 billion claim is also in effect over violations of the US Clean Water Act.

The actions taken by BP were unethical and all information should have been disclosed to shareholders. The risk involved with the largest oil spill in the US history is high and misleading shareholders could have had a serious impact on both the economy and the company itself. Although BP was smart in minimizing their losses, being ethical is still key in a business.

Written by: Wilson Tang

Source:

http://www.bloomberg.com/news/2013-04-27/new-york-city-employee-pension-funds-sue-bp-over-gulf-oil-spill.html

Samsung Galaxy Drives Record Profit as S4 Hits Stores

The gap between Samsung and their biggest competitor Apple is gradually closing as Samsung overtakes Apple’s market shares. The highly anticipated Samsung Galaxy S4 went on sale in South Korea and the US will begin to sell the device soon. The demand for the Samsung Galaxy S4 is so great that the release date had to be pushed back to May 30th. As Samsung is gradually taking the lead in the smartphone industry, massive profits are being generated. The net income rose 42% to 7.15 trillion won and as smartphones sales increased by 56% to 69.4 million units. The amount of smartphones sold by Samsung is nearly double of Apples output.

Samsung is motivated to take back their number one spot in the smartphone industry which Apple has taken with the release of their iPhones. Each time Samsung releases a new and innovative product, Apple loses a portion of their market shares to Samsung. An analyst at IBK securities Co. said “it yet again succeeded in taking away some of the smartphone share from Apple”. Although the release of the S4 did not have much effect on the market because investors already knew about the profits from earlier, the company is expected to grow at a very rapid rate to shorten the gap between their biggest competitors.

Written by: Wilson Tang

Source:

http://www.bloomberg.com/news/2013-04-25/samsung-electronics-profit-beats-estimates-on-galaxy-sales.html

U.K. GDP Goes Up

The U.K. economy has not been doing very well for the past few weeks, but it was reported today that the U.K. has seen an increase of 0.3%. Although it is good that the GDP has seen an increase, the break down of the reasons for this increase may not be as influential as it may seem. The increase in GDP was caused by increase in the service industry as opposed to an increase in exports. Regardless of where this growth came from, it is still necessary for the U.K. because their economy has not been doing very well since 2008.

 

Many countries are having similar problems with a lowering number of exports, especially when countries such as Japan and China are keeping their currency value low to make their exports look more attractive. Countries that are manufacturing goods for a low price are negatively affecting other countries who simply cannot offer their products at such a low price.

 

Written by: Wilson Tang

Source: The Wall Street Journal

 

http://online.wsj.com/article/SB10001424127887324743704578444403125282908.html

Ford Profit Rises on Strong North American Sales

The Ford Motor Company announced a 15% increase in first quarter net income as the company continues to thrive in the American economy. Sales are up by 11 percent in the first three months of the year alone with a bright future ahead. Alan R. Mulally, Ford’s Chief Executive Officer says that the company’s One Ford Plan is working, possibly contributing to the success of Ford in the American market. Despite how well Ford is doing in the American market, Ford is struggling in other markets, specifically in Europe. The company reported losses of $426 million and expects to lose up to 2 billion by the end of the year. Compared to the American market, the European market is weak and the demand for cars is low.

The demand for cars in both the American and European market is a good tool to compare and contrast the two markets. The high demand of new car models in the American economy shows signs of recovery, where people are more willing to spend money in comparison with the weak European market where people are a bit more reluctant to spend their savings on a quickly depreciating asset.

Written by: Wilson Tang

Source:

http://www.nytimes.com/2013/04/25/business/ford-profit-rises-on-strong-north-american-sales.html?ref=business&_r=0

Apple Averts Import Ban After Motorola Patent Case Win

Apple and Google have been disputing about patents rights to gain a competitive advantage over the smartphone industry. There have been plenty of legal cases targeted at each company and the latest one involves Apple using the technology of Motorola Mobility’s phone censor. If the claim was valid, Apple would have faced import issues with their iPhones but the judge has not found any violation from Apple. If the iPhones faced import issues, it could have been problematic for Apple since a large portion of their revenue comes from their iPhones. The iPhones generated $78.7 billion in sales last year. Even though Google has acquired over 17,000 patents, the senor patent was the only case left that involved Apple. Although Apple was not charged with infringement, Apple wants to appeal that a patent on over touchscreen technology is not valid.

Apple and Google being the two largest companies in the smartphone industry will inevitably come across problems with each other and rather than filing claims that end up being tossed out, they can use this fierce competition as motivation to innovate more than the other company. Judges know that iPhones are popular and are a large part of commerce so they usually pay more attention to the cases, making it more difficult for Google to win a case.

Written by: Wilson Tang

Source:

http://www.bloomberg.com/news/2013-04-22/apple-wins-case-brought-by-google-s-motorola-over-iphones.html

Netflix Seen Cracking Down on Sharing to Bolster Profit

NetFlix recently reached their all-time high number of subscriptions reaching 29 million in the US alone. The company’s policy limits the customers to 6 different devices while only 2 of the devices can stream videos simultaneously. This policy is not enforced; therefore many people take advantage of this company policy. Netflix is planning to target this problem by either increasing their prices or enforcing limits on each account. Analyst believe that if Netflix follows through, that they may potentially gain up to 53 million subscribers by 2017. Chief Executive Officer Reed Hastings is deciding how to implement new policies so that Netflix can see a gain in subscriptions or revenue.

In my opinion, raising prices for Netflix could go either way for the company. It could definitely help boost sales if customers are forced to open their own subscription because of the enforced limit or the company can even potentially lose customers. Some customers only subscribe because they are able to share an account, therefore without this option anymore, Netflix could also lose current customers and struggle to find new ones.

Written by: Wilson Tang

Source:

http://www.bloomberg.com/news/2013-04-22/netflix-seen-cracking-down-on-sharing-to-bolster-profit.html

Growth Probably Picked Up in First Quarter: U.S. Economy Preview

Based on first quarter reports, the economy seems to moving in a positive direction. There are many signs that support a gradually recovering economy such as the gross domestic product and various industries’ reports. The gross domestic product this year has shown a jump of 3.1 percent as consumer spending which accounts for 70 percent of the gross domestic product rose 2.8 percent. The automobile industry is one of the strongest industries in the economy right now as averages of 15.3 million cars are sold. The rising stock prices are stimulating the economy and putting more money into the economy increasing consumer spending which further stimulates the economy even more. There is also an increase in home purchases, both previously owned houses and new houses. Previously owned home purchases climbed 0.4 percent and new homes climbed 1.2 percent. Railroad companies are also growing, reporting earnings that beat estimates.

Although the economy is only gradually recovering, if the current rates stay consistent then the economy can continue to grow. Everything that is used to stimulate the economy is like a endless cycle of pouring more money into the economy just so it can be used up again. The rising stock prices are a good example where money is generated in households, who then spend it on goods; the goods increase in demand which also increases the amount of labor needed which leads to the creation of jobs.

Written by: Wilson Tang

Source:

http://www.bloomberg.com/news/2013-04-21/growth-probably-picked-up-in-first-quarter-u-s-economy-preview.html

McDonald’s Profit Little Changed as U.S. Sales Slide

McDonalds, the world’s largest fast food restaurant fell 2%, the biggest drop since November 8, 2012. As McDonald’s competitors are rapidly growing, McDonalds need to keep up. An analyst says that the company needs more new products as their competitors are introducing many new products that are closing the gap between competitions. Burger King recently introduced their new turkey and veggie burgers while Wendy’s introduced their all new flat-bread grilled-chicken sandwiches. In the past Chief Executive Officer of McDonalds, Don Thompson have tried to gain more customers with their appealing dollar menu but the company’s sales still seem to be falling. Their new strategy to stay competitive with their competitors is to roll out more new products such as the new Fish McBites, new premium snack wraps and a new breakfast sandwich with low calories.

It is important for McDonalds to introduce new products if they want to stay competitive with their competitors because consumers like variety. Introducing new products is not hard, but introducing new products that distinguish your company from the competitors is. That is why the Big Mac is associated with McDonalds while the Whopper is associated with Burger King. Although the sales of McDonald’s are sliding, it could be a positive sign for the economy. People are doing better so they would eat less fast food.

Written by: Wilson Tang

Source:

http://www.bloomberg.com/news/2013-04-19/mcdonald-s-profit-little-changed-as-u-s-sales-slide.html