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Amazon Loses Nike

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Amazon News

It’s still two months before former eBay’s boss John Donahoe takes charge of Nike’s (NYSE:NKE) boat, but significant alterations are already taking place. And one significant change is that Nike products will no longer be available on no other than eBay’s main competitor, the e-commerce giant Amazon (NASDAQ:AMZN). The e-commerce giant has had its fair share of ‘not-good’ news this year that are threatening the company’s growth, the one for which the company often sacrificed profits for.

Why

Nike offered only a vague explanation, saying it will focus on elevating its consumer experiences through more direct relationships. Obviously, the plus of being on Amazon is the platforms’ huge base of customers, but the minus being shared revenues. Amazon’s loyal (and Prime) members are often surprised if there is something they cannot find on the platform and this will be the case with Nike. But what can happen is that they opt for something else that is offered on the platform which could hurt Nike but the company didn’t rule out selling through other digital retailers. But in the long run, investing in a direct relationship with your customers can indeed become a strong asset. Only by capturing credit info, the company can then tailor marketing deals, special promotional and items more easily as it already has a registered base. So even though that in the short run, this decision could harm Nike’s revenues, if the company manages to deepen the relationship with its customers, it can improve both its top and bottom lines as this would also place the ‘more-than-just sneakers manufacturer’ in a better position to move more products at even higher prices. This is why enhancing the relationship with customers has great odds of becoming a win-win strategy.

Amazon is facing all kinds of pressure

Nike’s decision is only an additional headache for Amazon which is facing already quite a bit of pressure. To begin with the antitrust regulatory pressure from the EU and US, its employees forcing the company to a climate pledge and the most painful of all, losing the Pentagon $10 billion deal to Microsoft Corporation (NASDAQ:MSFT). Cloud business is at heart of Microsoft’s bright prospects as the company’s stock has literally undergone a renaissance with its CEO Satya Nadella. Due to privacy concerns raised by EU’s data protection authorities, Microsoft announced changes to commercial cloud contracts. But Amazon is not giving up that easily. Besides publishing an appeal on Microsoft’s win to BBC, quoting deficiencies, unmistakable bias and errors in the JEDI evaluation process, the e-commerce platform offered its users to listen to its free music service outside of Amazon Echo, including iPhones, Androids and Fire TV. This move has caused Spotify Technology (NYSE:SPOT)’s shares to drop 4.9% on Monday and it will surely impact its winning streak as the company outperformed third quarter earnings estimates and announced last month that the number of premium subscribers rose 26 million in the past year and reached 113 million at the end of September. But there’s also Apple (NASDAQ:AAPL) Music to be aware of as we need to wait and see will the company offer bundles of its music, news and TV offerings. And there’s TikTok’s owner Byte Dance who is also supposedly in negotiations with global music labels and its product could severely undercut both Apple and Spotify. So luckily for Amazon, its business models is well diversified- and what got it this far.

But it is pressured by its competitors, one of the main being Walmart Inc (NYSE:WMT) which also just introduced delivery perks to up the ante for its customers with Amazon’s new grocery chain that is slowly but surely taking shape. With its Fresh service being offered free-of-charge to its US Prime members, Amazon even made grocery shopping easier by combining AmazonFresh and WholeFoods market.

Outlook

Maybe Amazon is not a ‘smashing success story’ but the impressive size of its infrastructure makes up for its thin margins as the e-platform serves about half of US’ e-commerce market, according to eMarketer. Acquiring Whole Foods was clearly a jackpot but the question posed is whether the e-commerce giant is running out of ways to cost-effectively expand? The company’s shares are up more than 1800% over the past decade but if history has taught us anything, it is that nothing lasts forever. There is still room to grow, both vertically and horizontally, but it will no longer be as cheap nor easy. One day-shipping strategy entailed more costs than the resulting benefits as global shipping costs rose 46% with last quarter’s top line expanding 24%. AWS is also seeing a slowdown revenue growth as competitors are stepping up their game. There is no ‘alarm bell’ just yet, but starting with Nike, all these hints that are pointing in the same direction. There is definitely a concern on the radar for Amazon as its profit in the most recent quarter declined for the first time in the last two years for a reason.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

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BenzingaEditorial

Could COVID-19 End Up Being “Good” For EVs?

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Tesla Electric Vehicles

Wise people say each problem is an opportunity in disguise and crisis are no different. Those in favor of clean energy see opportunity even in the pandemic. By seeing nature blossom as half of the world’s population was kept in lockdown, more people could indeed feel more inspired to opt for EVs. But the consequent recession also implies cuts. Which vision of the post-pandemic future will prevail?

 Electrification during the pandemic

As for corona- cancellations, Lincoln/Rivian SUV is the only one so far. And to be honest, it was quite a brave R&D abstract project. On the other hand, Ford Motor Company’s (NYSE:F) far more important Mustang Mach-E still seems to be headed for production, although deliveries may be delayed. Over at General Motors (NYSE:GM), early May prognosis is that it may have to work harder and put more resources on these programs to keep them on time, but there’s no slowdown. And despite several launches being delayed or even cancelled, GM clearly stated that production remained intact.

Volkswagen’s (OTC:VWAGY) new ID.3 is rolling off the assembly line in Zwickau, Germany, and YouTuber nextmove, who recently toured the facility, said he also saw another, newer model on the production line—the ID.4, an electric crossover that’s expected to be similar in size and range to the Tesla Inc’s (NASDAQ:TSLA) Model Y and, unlike the ID.3, will be sold in the US.

Even before the lockdown eased, Tesla was well-positioned. Moreover, recent events have only made it crystal clear that Musk plans to bring production back up to speed as quickly as possible. And he will use whatever means necessary, even if it involves getting himself arrested.

The situation in the U.S. varies greatly by state

So, the short-term production picture looks solid. But the long-term outlook greatly depends on government regulation. The Trump Administration is not letting fossil fuels die but its hostility to all things green is nothing new.

But things are more optimistic when looked at a state-level, especially when looking at California and Colorado. Despite the trucking industry attempting to play to COVID card, zero-emission and EV policies are being put forward.

Global direction

Out of all coronavirus-related stimulus programs, US and China governments have been by far in favor of polluting industries. Two of the world’s biggest economies have turned their back to environmental improvement.

Brighter skies in Europe

Despite Germany also not getting a very good score, Chancellor Angela Merkel has insisted that Europe’s economic recovery plan needs to be based on the European Green Deal to keep a close eye on climate protection.

Enlightened governments are opting out from investing in dead-end internal combustion technologies. Even the severely hit Spain’s government looks set to approve a package of climate-related measures that includes investment in EV charging infrastructure and the establishment of low-emission zones.

France Made EVs central

French President Emmanuel Macron announced an $8.8 billion plan last Tuesday to rescue the country’s auto industry as auto sales fell 90% in April compared to last year. And boosting both production and sales of EVs is the main action of the strategy.

Macron wants France to become the leading producer of clean cars in Europe and compete fiercely with Germany for that leadership role. Consumer incentives to buy an electric car will also be increased from €6,000to €7,000. There will also be incentives for people to switch their old vehicles for a lower-emission model upgrade. The message is clear: the government is ready to ready to support the demand for vehicles as long as they are clean vehicles that emit less CO2, like EVs.

The figure does not include a €5 billion government loan guarantee under discussion for struggling Renault (OTC:RNLSY) which shuffled its short-term strategy with Nissan Motor Co (OTC:NSANY) to survive the coronavirus earthquake. It also does not include the millions the government has already spent on temporary unemployment payments to auto workers.

The French government owns a 12% stake in Peugeot’s (OTC:PUGOY) maker PSA through the state investment bank. PSA might have reported record profits last year but its sales plunged with the lockdown. Its merger with Fiat Chrysler Automobiles (NYSE:FCAU) to create the world’s fourth-largest automaker is very much on as the two companies will be sharing electric vehicle platforms.

Electrification is gaining momentum at ‘enlightened’ countries

The pandemic and the resulting economic damage that’s just beginning to be felt has hurt auto sales across the board will surely impact electrification plans. But the technology as well as global demand for EVs have evolved too far to turn back. Odds are that electrification will only go faster, at least in the countries not willing to turn their back on climate change such as France. Like every other crisis, the pandemic will create winners and losers for years to come.

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

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BenzingaEditorial

Pharma Large and Mid-Caps in the Race Against COVID-19

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Global economy corona virus

If COVID-19 has done something, it has made us realize that health should always be our top priority. No one knows when will the pandemic end, but we are counting on the pharmaceutical industry to win this battle for us. And while the world has stood still, the companies kept going full speed ahead.

AbbVie Inc – Botox to the rescue

With unappreciated potential, the stock of this big drug maker has stellar fundamentals. AbbVie’s (NYSE:ABBV) acquisition of Allergan that was finally summarized on May 8, almost one year after the announcement, brought the company more than 120 additional products that generated more than $16 billion in revenues last year.

There were a few bumps along the way but AbbVie now has Botox. And its sales are growing both as a cosmetic and in treating various therapeutic conditions including chronic migraine and overactive bladder.

J&J – active on all fronts

Although Johnson&Johnson (NYSE:JNJ)’s share price is nearly where it was at the start of the year, there are many reasons why this stock is an ‘evergreen’ favorite. To start with, it is the largest healthcare company in the world with tremendous resources.

In March, it committed to invest more than $1 billion to develop a COVID-19 vaccine. And it is doing much more than that. It is also setting up a manufacturing capacity to produce the vaccine even before clinical trials take place by September. The vaccine could be available for emergency use authorization by 2021, if all goes well. But its scientists are exploring the potential for existing drugs to treat COVID-19. And we haven’t even mentioned the company’s activities besides its coronavirus efforts.

One of the main reasons that this stock has been a favorite among investors is its diversification across the healthcare sector with three business segments. The company’s pharmaceutical segment is its biggest growth driver but other two segments, consumer health and medical devices, are also multibillion-dollar businesses.

Merck- entering the COVID-19 arena

A buzzing hot stock as Merck& Co (NYSE:MRK) announced three deals to find new medicines and vaccines to help combat the coronavirus. Merck uses debt in its business but it is no more threatened by its debt than an elephant is by a mouse. What is also positive is that Merck grew its EBIT by 29% in the last year, and that should make it easier to pay down debt. Only profitability can strengthen its balance sheet over time but Merck showed it is using debt quite reasonably. Consequently, investors gave it the nod it needed so the company is all set to enter the race!

Novartis – vaccine it is!

Novartis AG (NYSE:NVS) re-entered the vaccine area on Thursday. Its US teammate relies on technology similar to its $2.1 million-per-patient gene therapy, Zolgensma so hopefully they will together exploit the power of synergy.

Roche- combining drugs to fight COVID-19

Moving on to mid-caps which are just as active, another Swiss contender, Roche Holding AG (OTC:RHHBY) had an announcement of its own on Thursday.  Roche plans to test if mixing its anti-inflammation drug Actemra with Gilead Sciences Inc’s anti-viral treatment remdesivir might give better results in treating severe cases of COVID-19 pneumonia than remdesivir alone.

Roche is hoping that by combining the two in a global study of 450 hospitalized patients worldwide, it will be able to offer doctors a one-two punch against the enemy that took 360,000 lives as it quickly contaminated 5.8 million people.

Everyone is fighting for the same goal – and the world is cheering for them to reach the finish line as soon as possible!

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

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BenzingaEditorial

4 Blue Chips That Lived Up to Their Title During the Pandemic

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Future Solar Stocks Earth

A blue chip is stock in a corporation that enjoys a wide reputation for the value it contributes to the world and its ability to do well even during downturns. This pandemic is an unprecedented crisis that has put the economy into a virtual standstill. These companies showed tenacity to survive the storm.

BAT

A London-based company that took the second position in the US cigarette market with the acquisition of Reynolds American in 2017. British American Tobacco (NYSE:BTI) is surely among the highest yielding picks. But its investors were not pleased even before the pandemic. The company is facing several challenges, the greatest one being the tough trend in declining cigarette sales. The number of smokers has fallen, and that’s forced BAT to use its pricing power to boost profits and maintain revenue growth. But the company remains excited for its shift towards alternatives such as tobacco heating products and vapors. The new segment has shown results but it has been followed by regulatory difficulties. Due to FDA’s slow approval, it is still falling short of its potential. And there is the issue of controversy as the company is being investigated by the U.S. Department of Justice.

Yet, BAT is also one of the more surprising players who are working on a COVID-19 vaccine. Early signs of plant-based biotech development have been promising, but it’s far from certain if BAT can indeed provide the first solution to the coronavirus battle. And there is also the question if it this could be the most effective vaccine in the long run.

But the bottom line is that BAT shares demonstrated tenacity over the long run. Despite the challenges, it has a solid dividend that now yields almost 7% and an abundant cash flow. Fortunately, the decline in smoking has been a gradual one so its main business cannot evaporate into thin air just like that. So even if alternative don’t pan out as well as hoped, things are surely not bad!

Alibaba

Speaking of being at the right place at the right time Alibaba Group Holding (NYSE:BABA) is the one as the pandemic give wings to e-commerce that generated 82% of its revenue. But despite reporting amazing earnings recently, its stock dropped. But the culprit is a bill that the US Senate passed last week that raised the question whether some Chinese companies would be delisted from the US exchanges. Yet, the Chinese giant has not much to fear as investors over the globe are becoming increasingly dependent on Alibaba’s marketplaces to reach Chinese consumers. Moreover, despite the majority of its businesses being based in China, AliExpress is a leading marketplace in Europe.

Alibaba is also expanding its cloud platform overseas with significant investment, where it faces intense competition from Amazon.com Inc’s (NASDAQ:AMZN) AWS.

J&J

The allure of Johnson & Johnson (NYSE:JNJ) is its predictability and impressive insulation from recession conditions. It is a true stock from the ‘grandparents’ era. Although we are not speaking of a blockbuster growth, its 2.5% dividend and cash cow status are what make it an evergreen jewel. It is also preparing its own runner for the SARS-CoV-2 race as the first phase of human clinical trials is planned to begin in September 2020.

McDonald’s

Even during the pandemic, McDonald’s Corporation (NYSE:MCD) shares have managed to hold up all right as its drive-thru business and high-quality, financially sound franchisees give shares some resiliency. And this is not the first test that McDonalds passed. During the 2008 crisis, when others such as General Electric (NYSE:GE) were on the verge of slashing its dividend, McDonald’s was increasing its payout which is an annual ritual it has successfully maintained for 43 years. That year alone, it outperformed the S&P 500 by 46 percentage points. Its stock has what it takes to do the same.

Although tech has made the history of blue chips debatable with young companies such as Facebook (NASDAQ:FB) receiving the status simply due to their enormous impact, one thing has remained the same. Even these four companies come from a variety of industries, but they all have one thing in common: tenacity.

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

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