Penn Wealth Publishing

2018.03.25 Penn Wealth Report Vol 6 Issue 01

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25 Mar 2018 Penn Wealth rePort voluMe 6 issue 01 17 Penn Wealth RePoRt Copyright 2018. All Rights Reserved. Weekly business rePort Weekly business rePort Domestic and International Headlines us quashes China's ant finanCial's bid to takeover dallas-based MoneygraM And the saga continues. Nearly a year ago, we reported on the duel between China's Ant Financial and Kansas-based Euronet (EEFT $71-$85-$101) for control over money transfer services company MoneyGram International (MGI $11-$12-$18). Ultimately, despite being a Chinese firm in a more protectionist envi- ronment in the US, we figured that the $75 billion Ant would get its way. Not so fast. The Committee on Foreign Investment in the US (CFIUS) just torpedoed the deal, sending MGI's share price down to $12.40. For those who doubted the president's US-centric view, the recent Samsung ruling and this decision should make it clear that he meant what he said. Because of Jack Ma's close rela- tionship with President Trump (Ma controls Ant, the former Alibaba subsidiary), many believed the deal would ultimately be approved. There is often a fine line between protec- tionism and protecting US interests, however, and we applaud this decision. In its denial, CFIUS cited US national security concerns. Considering the amount of highly-sensitive personal data controlled by MoneyGram, and China's overt and covert efforts to hack every US system it can, why shouldn't the deal have been shot down? After all, $44.5 billion, US-based Euronet initially outbid Ant for con- trol of the company (though Ant subsequently offered $1.2 billion, or $18 per share, for MGI). So, now that their main competitor is gone, what will be Euronet's next move? The com- pany said it still sees a "compelling commercial logic" to the deal, but added that there is no guarantee any new offer will be made. From an investment standpoint, this is a tricky issue. With MGI down near its 52-week low, it would probably be a great investment if a new deal is made. If EEFT simply walks away, however, MoneyGram's stock will continue to languish. Investors tend to believe, based on the share price of Euronet, that the two US companies will eventually merge. EEFT was up about 4% immediately following the CFIUS decision. is aMazon really going to go after retailer target next? Well respected industry analyst and venture capitalist Gene Munster made a bold predic- tion this week: after digesting the purchase of Whole Foods, internet giant Amazon (AMZN $754-$1,204-$1,213) will set its sights on retailer Target (TGT $49-$67-$74). While the Whole Foods purchase certainly makes this potential takeover a little more probable, we still don't see it happening. Yes, Amazon wants to move into fashion retail like it did (or is doing) into food retail, but gob- bling up a $37 billion, somewhat questionable retailer may not be the best solution. Why not pick up a mere $8 billion company, like Macy's (M) or Nordstrom (JWN) instead? Not that Target's clientele wouldn't be a good fit for Amazon, and they are certainly in the target demographics; but, if it does happen, we believe it will more of a sign that Wal-Mart's (WMT) recent online success has gotten into Jeff Bezos's head. the hoWard hughes CorP unveils its neW luxury living toWer in honolulu Architectural Digest called the Howard Hughes Corp's (HHC $105-$127-$133) Ward Village in Honolulu the "best-planned community in the U.S." Now, the 60-acre luxury paradise is about to get a new addition: the 751 "home" 'A'ali'i lux- ury tower. The tower, touted as a "turnkey luxury liv- ing solution," will have resort-style amenities, top-line appliances, and a stunning ocean and mountain view. 'A'ali'i (the name of a native flower, by the way) will join four other Hughes- built towers, and is slated for completion around 2020. Ultimately, the Ward Village community will consist of over 4,500 residences and one million square feet of retail spaceā€”all within walking distance. Want to reserve your new digs? Visit the company here. disney-Controlled hulu had a bloWout 2017, adding 40% to subsCriber base Direct-to-consumer streaming company Hulu isn't publicly-traded, but investors can now take advantage of its explosive growth by picking up some Walt Disney (DIS $96-$110- $116) stock. That's because Hulu, which had been controlled by equal stakes between Disney, Fox, and Comcast, came over to the House of Mouse when Disney bought most of the assets of 21st Century Fox last month. Hulu added 5 million new subscribers last year, bringing the total subscriber base to over 17 million. That, in turn, means that the streaming company's total audience size is now over 50 million. Hulu's advertising revenue topped $1 billion in 2017, and its original con- tent programming won 10 Emmy Awards last September. Many pundits thought Disney should have purchased streaming giant Netflix (NFLX) years ago. They are taking a different path to domination, however. The company already announced it was pulling its programming from Netflix; now that it owns competitor Hulu, almost all Disney content will be accessible only on a platform owned by the company. Brilliant management. (Disney is a member of the Penn Global Leaders Club.) the end of the Cashier? Food and retail superstores Walmart (WMT) and Kroger (KR) are about to roll out tech- nology that will transform the way we shop. Specifically, it will end the days of trying to find the shortest checkout lane and then fumbling through gossip rags as we wait to pay for our goods. Walmart is calling it "Scan & Go," while Kroger's platform is named "Scan, Bag, Go," but the two have the same objective: allow shop- pers to scan items as they place them in their cart, and then pay with the simple tap on a smartphone app. The technology now exists to complete such transactions, as Amazon (AMZN) has proven. WMT and KR will begin rolling out the systems at hundreds of locations this year. business & Professional serviCes internet retail real estate ManageMent & develoPMent 'A'ali'i Tower; Photo Courtesy: The Howard Hughes Corp Media & entertainMent food & staPles retailing

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