LinkedIn’s Shares Decrease 8.6%

LinkedIn Corp is a professional social network which has a total of 218 million members. The stock has increased 76% so far this year as memberships and premium subscriptions have surged. The company’s projected revenue has increased from $1.43 billion to $1.46 billion for this year; however second-quarter estimates are $2 million lower than previously forecasted. LinkedIn has added a number of features to users’ profiles and news feeds to keep up with rivals. The company’s “talent solutions” segment which is the largest part of the business grew 80% in the latest quarter; ad sales grew 56% and premium subscriptions rose 73%.

LinkedIn’s figures have been great yet its shares dropped 8.6% to $184.25 after market hours today as the company issued poor projections for the second quarter. As the job market becomes more and more competitive, having a LinkedIn profile is becoming the norm. Even my roommate who is a pre-med student has one… just for the sake of having one.

Evan Chang

Source: The Wall Street Journal

China Affair With Cheap Diamonds Heats Mass Market: Commodities

Before, the trend in China for the demand of luxury goods, such as diamonds, was that the consumers wanted the best of the best. Only the richest elite could afford luxury goods. However, a shift in the demand for diamonds specifically points towards a new trend of a growing middle class, both in size and in income. Lower quality diamonds are now being purchased, and although they are lower in price, they make a much higher portion of diamond makers’ revenues now.

“China surpassed Japan in 2011 to become the biggest diamond consuming nation behind the U.S.” The fact that most of these diamonds are now lower quality, the indication is that the majority of the population are buying them. Specifically, the urban population, of which China has seen a growth of 230 million people since 2000, “the greatest urbanization in history.” Also, income has seen a growth of 13 percent, or about $330 a month, allowing greater spending on luxury goods.

The long term view of the diamond industry is that the population and consumption of goods will only increase in China through 2020. This means diamond producers will have to expand their resources to try and ensure that their supply can meet demands.

Source:

http://www.bloomberg.com/news/2013-04-30/china-affair-with-cheap-diamonds-heats-mass-market-commodities.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

The U.S. Long-Term Unemployment Crisis Stumps Economists

While the unemployment rate has been dropping, the U.S. is still facing a serious problem with long-term unemployment.  Long-term unemployment was 3% in January, which is triple the 2001-2007 average, whereas short-term unemployment, which was 4.9% in January, was only 0.7% above its 2001-2007 average.  The level of short-term unemployment, therefore, is starting to return to normal levels, while the level of long-term unemployment remains higher than normal.  Economists are struggling to understand the cause of this problem, considering generous unemployment benefits, erosion of skills, and discrimination by employers as possible reasons.  Peter Diamond, an economist at the Massachusetts Institute of Technology, goes as far as to argue that long-term unemployment poses a larger problem than the national debt. Rand Ghayad, a Ph.D. candidate in economics at Northeastern University, sent out fictitious resumes to employers and found that the resumes of those out of work more than six months had a much harder time attracting employment offers.

This trend of high long-term unemployment should begin to fade as more jobs are created.  When employers are less picky with job offers, the long-term unemployed should have a better chance than they do today.  The only way this can be made possible is with economic growth.  Nonetheless, the fact that 38% of the unemployed have been out of work for six months or more is discouraging.

Written by: Constantine Kostikas

Source: Businessweek.com

Stock Prices Rise Due To ECB

U.S. stocks have been seeing rises due to reports that less people are filing for unemployment benefits, but the stock market also had a positive reaction due to news that the European Central Bank will be cutting some of its main interested rates. The Dow Jones Industrial Average saw an increase this morning, and this increase was significant cause it has seen a large yesterday. The decision of the ECB to cut part of its interest rate was made in order to help to expand their shrinking economy. The ECB is trying to push policies to help their economy, but they do not intend on taking on the same policies that the Fed and the Bank of Japan are currently using.

It is beneficial to the global economy that the ECB is starting to push new changes that would help to stimulate their economy. This scenario well depicts how important the global economy is to the American economy, such news in Europe had a large impact on the American market. If the ECB is willing to take a more active role in helping their economy to recover, the American economy may see large growth as well.

Written by: Jessica Ho
Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887324266904578458434262995150.html?mod=WSJ_Markets_LEFTTopStories

Corporate News: YouTube Touts Viewer Growth to Advertisers

Innovation and new inventions sprout daily and can revolutionize the way people live. Specifically it could alter the way news or information is spread. For example, throughout history the travel of information through various mediums have went from radio, then to TV, from network to cable, and now it is through the Internet.

YouTube, owned by Google Inc., has original content that anyone can put up for the rest of the population to view. This is a great platform for advertisers to reach consumers as over one billion people visit YouTube each month. Those viewers spend over six billion hours on the website watching videos. YouTube could potentially be the next place advertisers look to place their ads as an alternative to broadcast television.

YouTube has generated roughly four billion dollars in revenue last year and are projected to grow even more. This change from radio to television and now to internet is an advancement that will affect all of our lives. I am pretty sure everyone here frequents YouTube and has seen ads already on the website. This major shift for advertisers could reach various demographics by doing this and it will alter our video streaming experience that we will notice on a rather constant basis.

URL:http://online.wsj.com/article/SB10001424127887324582004578457253960478548.html

-Jonathan Chan

Intel Names Krzanich as New CEO

Paul Otellini, who is now the former CEO of Intel, had decided to step as CEO. He had been CEO of the chip manufacturing company for eight years and Brian Krzanich is set to take over his position. Krazanich who was the chief operating officer since January of last year and had been working for Intel for about 30 years. He will take over the position during their company’s shareholders meeting. 

This move came after the company reported drops in both net income and in revenue for their first quarter of 2013. The company will also name a new President in effect for May 16th. Their new president, Renee James, who had also taken leadership positions in Intel. Seeing these promotions of Intel, it’s easy to see that most companies usually promote from within the company and in order to move up in the career ladder, it is important for us to start early in taking leadership positions and be as involved as we could.

-Derby Ng

http://online.wsj.com/article/SB10001424127887324766604578458650267324178.html?mod=WSJ_business_whatsNews

Walt-z On Out

Last week in Bangladesh, a building filled with garment factories collapsed and took the lives of around 400 people and as a result, Western apparel countries who have their productions based there, are trying to address growing public concern over safety conditions. Companies like Gap and The Children’s Place plus other retailers huddled to figure out how to improve conditions, and some debated whether to remain in Bangladesh at all. However, one big American company, Walt Disney has decided to leave altogether citing an earlier incident with a fire that killed 112 people.

Although less than 1 percent of the factories used by Disney’s contractors are in Bangladesh, the company ordered the end of production in their Bangladesh facilities. This move by Disney highlights the struggle that companies who have productions in countries such as Bangladesh as they have to balance profit and reputation. As a result of Bangladesh having some of the lowest wages in the world, its government eagerly tries to reel in Western Companies and their jobs but the string of recent disasters prove that there are many perils. “These are complicated global issues and there is no ‘one size fits all’ solution,” said Bob Chapek, president of Disney Consumer Products.

 

Written by Kevin Zhang

Source:

http://www.nytimes.com/2013/05/02/business/some-retailers-rethink-their-role-in-bangladesh.html?ref=business&_r=0

Fed To Continue Bond-Buying Program

A few weeks ago many were saying that that the Fed was considering on pulling back on their bond-buying program, but it has been recently announced that they will not do so, and will instead increase the numbers of treasury and mortgage backed securities that they will be buying. The Fed believes that the government’s fiscal policy is doing little to help the economy grow. The Fed is willing to adjust the amount of bonds that they buy based on the shape of the economy in order to help with expansion. Investors are expecting the Fed to continue pushing out money to buy bonds until the economy shows that it is in better shape.

It is good that the Fed is willing to continue their bond-buying program in order to help the economy grow, but the Fed should not be the only ones who are trying to do so. It is important that the government and all those who are vital to the economy also help to expand the economy.

Written by: Jessica Ho
Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887324582004578457161695264402.html?mod=WSJ_Heard_LEFTTopNews

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&

Unilever Ghana Sees 10% Revenue Growth on Lipton Tea Exports

Similar to Procter and Gamble, Unilever is a multinational consumer goods company that sells personal care products.  Lipton is one of over 400 brands that they own and export. Unilever has expanded to developing countries such as Ghana. Their base in Ghana exports Lipton Tea to West African countries such as Mali, Benin, and Ivory Coast. Unilever’s investment on this base exceeds 7.5 million cedis. This factory plans to produce over 1,000 tons of Lipton tea because they have projected a 10% revenue growth in Lipton tea export. Unilever also plans to expand their base in India because they find potential to profit in developing markets.

By investing in these countries, Unilever is providing the nations with more job opportunities. As these nations develop beyond their specialties, they will be able to support themselves. Cost of labor is also lower in Ghana and India, which greatly reduces the company’s costs. Their economy will also improve as more companies invest in them.

 

Written By: Melody Mark

Source:

http://www.bloomberg.com/news/2013-05-02/unilever-ghana-sees-10-revenue-growth-on-lipton-tea-exports.html

Labor Shortage In China: Industrial Sector

Companies that offshore or outsource typically look toward China or Mexico to minimize costs; China has a population of over a billion people and no set minimum wage for the entire country. Years ago when factories opened in China, people from the surrounding regions would line up to find work, something which no longer happens. The service sector in China has become more attractive to workers since the quality of life in such jobs is much better. The service sector created 37 million new jobs in the past five years as opposed to the industrial sector, with just 29 million.

The labor shortage for the industrial sector in China is not a cyclic matter; the hours may be longer and the wages lower in service jobs but the jobs are more appealing. Success is very important in Chinese culture and telling “your parents that you’re working at reception, [just] sounds nicer.”

Evan Chang

Source: The Wall Street Journal

Pentagon Expected to Embrace Apple, Samsung Devices

Smartphone giants, Apple Inc. and Samsung are having their products utilized in our country’s department of defense. The pentagon are integrating new smartphones for their employees. In the coming two weeks, the United States government agencies  will be adding Samsung’s famous galaxy smartphones, along with Apple’s iconic iPhones and iPads. Both Apple Inc. and Samsung have been fighting to enter an industry has been dominantly owned by Research in Motion.

This move could be super beneficial for both Apple and Samsung, since more people will now be using their products and the smartphones will be used in more occasions now. Since the technology will be used in all areas in the U.S. government, it could a way of advertising for Apple and Samsung.

The move for Department of Defense could affect Blackberry and Research in Motion big time, as their sales have dropped significantly the past few years and now Apple and Samsung are taking an area that Research in Motion had the most success in. It will be interesting to see how Blackberry will do in the next coming weeks as their competitors are entering the market that they have been in.

-Derby Ng

http://online.wsj.com/article/SB10001424127887324582004578456940454210134.html?mod=WSJ_business_whatsNews

Biofuel Pioneer Forsakes Renewables to Make Gas-Fed Fuels

Since 2006, Royal Dutch Shell Plc. has invested $375 million a year into Codexis inc., a biofuel company whose C.E.O. had resigned and is now renouncing the use of biofuels. The former C.E.O., Alan Shaw, has stated ” it’s impossible to economically turn crop waste, wood and plants like switchgrass into fuel.”

Defendants of biofuels say that it is too soon to make judgments about the whole industry since it is still in its infancy. Compared to Wind and Solar energy, biofuels are very young. There are still many other methods that fall under the biofuel category that are being developed. Also, there seems to be a temporary shift of funding from biofuels to gas due to the recent boom in oil commodities, which may be reducing support for the biofuel industry.

” Codexis fell 4 percent to $2.15 at 12:39 p.m. in New York, down 83 percent from the IPO price.”

The fact that there has been a huge boom in the amount of oil available makes a big difference to the energy industry. If oil is so prevalent  there is no need to panic for finding new energy sources. Of course, environmental factors are still being considered, but in terms of profits, the need for new fuel sources doesn’t seem as immediate if the oil is available.

Source:

http://www.bloomberg.com/news/2013-04-30/biofuel-pioneer-forsakes-renewables-to-make-gas-fed-fuels.html