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Tiffany’s Shares Go Turbo After LMVH Increases Bid

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Tiffany News

French luxury goods conglomerate LVMH Moet Hennessy (OTC:MC) gained access to the books of Tiffany & Co. (NYSE:TIF) after it raised its offer to $16 billion, according to Reuters. Consequently, Tiffany’s shares jumped yet again, this time 3.4% late Wednesday. Last time, the company approached with an offer of $120 per-share takeover bid valuing the company at $14.5 billion, which the company appeared to have rejected but now the stake is up at $130 per share and seems to have increased the odds of a possible deal. The fact that Tiffany allowed LVMH to take a closer look at its financials sure sounds like it.

The two companies

Tiffany is valued at about $15.8bn including $350m in net debt, whereas LVMH which is owned by Europe’s richest man, Bernard Arnault has a strong portfolio including brands such as Louis Vuitton, Dior and Sephora. LVMH approached the company last month with a letter proposing an all-cash takeover bid of 120 per share whereas the new, higher bid marks a premium of about 30 per cent to Tiffany’s stock price before the news even surfaced. This takeover would surely be the largest by Mr. Arnault who has been at the front of the consolidation in the luxury goods industry for four decades. And if it would come true, it would allow LVMH to widen its mark in the US where it has a weaker presence as well as intensify its push into the so-called ‘hard-luxury’ segment which it began in 2011 with the $5.2bn acquisition of Italian jeweller Bulgari. And according to Bain consulting, jewellery was one of the fastest-growing categories in the personal luxury goods sector last year.

Tiffany’s has been facing some challenges

Tiffany’s is getting new workforce as former Barneys New York Chief Executive Daniella Vitale joins the company a month after the department stole was sold in bankruptcy. Ms. Vitale is taking a new position of executive vice president and chief brand officer. Her expertise will be valuable as Tiffany’s does its best to find new ways to sell to a new generation that is motivated by self-gifting than special gift-giving occasions, i.e. engagements.

Tiffany’s is not immune to those headwinds that struck Barneys and its challenges come from lower tourist spending, a strong US dollar and the China-US trade war. But Tiffany has over 300 stores around the world, with quite a presence in China. But despite its high brand recognition and “Breakfast at Tiffany’s” memorabilia, the legendary jeweller is struggling to modernise its brand identity to appeal to the younger generations that don’t quite seem to believe that ‘diamonds are a girl’s best friend’.
While last year Tiffany’s had record net sales, global net sales decreased 3 percent to $2.1 billion during the first half of the current year. But Tiffany’s excels when it comes to its digital profile due to omni-channel excellence, consumer engagement and associate mobility. Its customer service shines with both white gloves and digital-savvy store associates who are fully equipped to personalize the shopping experience for each buyer.

With Tiffany’s under its umbrella7, LVMH would gain a superpower against its Swiss competitor Richemont (OTC: CFRUY) who owns Cartier among others, is a leader in the hard-luxury segment of watches and jewellery. If this deal goes through, it would surely question Richemont’s dominance. Especially since their profits dropped 61 per cent for the first half of its reporting year as consequence of the Hong Kong protests and extensive digital investments that damaged its bottom line.

Then there’s French Kering SA (OTC:PPRUY) who, among others, owns Saint Laurent and Gucci who exceeded estimates despite Hong Kong turmoil and even defied US weaknesses, causing Kering’s sales to rise 14.2% in the latest quarter. But LVMH is already King Kong comparing to its competitors. Let’s just look at last year’s numbers: €46.8 billion for LVMH in 2018, €14 billion for Richemont’s most recent fiscal year and €13.7 billion for Kering also for its most recent year. So, the size of LVMH’s portfolio says it all and Tiffany’s might just be the spark it needs to complete the enchantment.

Outlook

Despite failing marriage rates, Tiffany’s CEO Alessandro Bogliolo firmly believes that love is still a hot business and that the company is well-equipped to cater to millennials. Even studies showing that millennials are ditching diamonds is not taking the smile away from Tiffany’s CEO who proudly states that Tiffany’s diamond ring is even present on every phone’s emojis. But are emojis enough to sell those diamonds is a different question. But the silver lining is that Tiffany’s signature blue that is more valuable than all those diamonds combined and LVMH knows that. And Tiffany’s can gain a lot from LHMV’s global reach and strength. So, after LVMH has already shown its parenting skills with Bulgari, there’s no reason to think this couldn’t be a perfect match made in luxury heaven!

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

Oil Giants Have Contrasting Approaches to the Crisis

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oil industry stocks

The oil industry was already under pressure due to the climate crisis and increasing regulation from governments to cut emissions. Now, many are wondering if the coronavirus is the last drop that will kill the oil industry and help save the planet. Analysts say that the oil and gas industry will never be the same. Without any exaggeration, oil is facing the gravest challenge in its 100-year history. Oil giants have been pushed to ‘survival mode’ and an environment of pure carnage due to plunging demand and a destructive price war.

Unprecedented times

With some labelling the situation as “apocalyptical”, the least lurid description is “unprecedented”. Oil prices have been the lowest in almost two decades, with even worse potentially on the way. This latest cyclical oil shock is hitting an industry whose days are counted. But the world’s economy and infrastructure is still heavily invested in fossil fuels to a truly staggering level. This means oil has enormous inertia. Moreover, the aspects that made us rely on oil during last hundred plus years are still around because it is still a powerful way to produce and transport energy.

The answer of Oil Giants

Dividend Aristocrats are still betting their future on oil

Chevron Corporation (NYSE: CVX) is continuing to drill for oil. Chevron and Exxon Mobil Corporation (NYSE: XOM) are certain they can still bring in a few profitable years while their European rivals are betting their future on renewables. Chief Executive Officer Mike Wirth believes the energy business is simply undergoing another of its natural transitions. Chevron is not focused on replacing oil, but rather at making oil and gas more efficient and more environmentally benign. This isn’t surprising as it is coming from someone who profits from the status quo.

It’s a multibillion-dollar gamble that would have been less surprising before the pandemic turned the whole world upside down. The risk is that the industry’s mightiest could end up being left behind by producing a lot of climate-endangering oil and gas that no one wants or needs. Wirth insists he’s comfortable with that risk, because he finds that this energy transition is simply “misunderstood.” Exxon has also reiterated its commitment to being oil’s last man standing decades from now.

Chastened BP committed to dramatically reduce oil and gas production

In sharp contract, BP p.l.c. (NYSE: BP) announced dramatic steps to address climate change on August 4. This strategy includes an unexpected vow to reduce oil and gas production 40% over the next decade. Its CEO admitted its strategy was greatly influenced by the COVID-19 crisis.

Contrasting public approaches

So far, Chevron and Exxon’s approach to climate change is in contrast to those of BP, Royal Dutch Shell (NYSE: RDS-B) (NYSE: RDS-A) and France’s Total S.A. (NYSE: TOT). All three have committed to speed up their shift to cleaner fuel sources. The aim is to align with the Paris climate agreement and become “carbon zero” by 2050.

On the other hand, Chevron and Exxon have pledged to sustain their dividends unlike BP and Royal Dutch Shell Plc that were forced cut their highly prized dividends due to the low oil prices.

Chevron and Exxon claim to support the goals of the Paris Agreement by reducing emissions, but they haven’t committed to a zero-carbon footprint. They plan to reduce emissions from their own operations but not those of their products. Their position is also politically easier in the U.S., where fossil fuels count on significant support from the Congress. Chevron and Exxon are simply avoiding the switch to a field where they have little expertise and where they perceive returns to be lower.

Business of oil may never return to ‘normal’

Shell CEO Ben van Beurden recently suggested that the oil business might never recover. BP’s Bernard Looney didn’t rule out the possibility that post-pandemic demand has already peaked. Those are horrifying news for companies that used to thrive as providers of a scarce resource that underpins the global economy. First of all, the resource is no longer scarce because of shale. BP even lowered its forecast it made two months ago by predicting that over the upcoming decades, crude prices could trend as much as 20% lower than initially thought.

Natural gas could be the answer

Natural gas is cheap these days. Its supplies also seem larger than oil reserves. Many experts are betting on natural gas to be our largest electricity provider. It is a perfect complement to solar and wind power. This is why it also makes sense to run cars on it. EVs are cleaner but their production also has an environmental footprint so they cannot solve all our problems. Another possibility is to use coal-to-liquid processes, just like what Germany did during WWII. But, it is a dirty and expensive way to increase supply. Rest assured, oil giants will explore any opportunity to keep the business afloat.

The solution could be gradual

A key question is whether the taken action is capable to alter the course of the climate crisis. Many experts are optimistic believing that the switch to renewables will provide the atmosphere the opportunity to gradually heal. The most enthusiastic ones believe 2019 will go down in history as the peak year for carbon emissions. But there are also pessimistic opinions that the fossil fuel industry will come back from the dead and that low oil prices will slow the much-needed transition to renewables.

Outlook is uncertain

Experts, including Jeff Currie at Goldman Sachs, are certain the climate change debate will take an entirely new direction. But exactly how will that look like remains to be seen. The first question is how long is the COVID-19 crisis going to last? And no one really knows the answer. But it is certain that these challenges combined are permanently altering the oil industry.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire 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

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Five Stocks That Have You Covered for EV Developments

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Electric vehicles

While lockdowns have been in place around the world due to the coronavirus pandemic, many people only ventured out on four wheels when they needed to get groceries. The International Energy Agency reported that at the end of March, road transport was down by half. Naturally, new vehicle sales have suffered. What is intriguing is that this has mainly affected cars with internal combustion engines produced by traditional automakers such as General Motors (NYSE: GM), Ford Motor (NYSE: F) and Fiat Chrysler Automobiles (NYSE: FCAU).

EVs resisted

But despite the drop in its biggest market, China, the demand for electric vehicles held up rather well. Germany topped the bill with a 148 percent increase according to Bloomberg, but then again, EVs are central to its recovery plan. Although the majority of us immediately thinks of Tesla Inc (NASDAQ:TSLA) that is showing no signs of stopping as it delivered its fourth consecutive quarter of profit despite the pandemic-induced havoc, there are other EV stocks to keep an eye on.

EV Charging Network

Miami, Florida-based Blink Charging (NASDAQ:BLNK) owns and operates an EV charging network across the U.S., Dominican Republic, Greece and Israel. It operates, maintains and tracks those EV charging stations through a cloud software.

Over its first quarter, the company enjoyed a solid growth as its revenue of $1.3 million increased 125% on a year-over-year basis. Its gross margin also improved from 9.3% to 23.8%.

Blink’s international expansion continued with its second quarter as $2.9 million in revenues during the first six months of 2020 surpassed full year 2019 revenues of $2.8 million. Product sales of EV charging equipment increased more than 350% with overall 2020 revenues increasing 120%. But it still has a long way to go to profitability as net loss amounted to $3.0 million.

A different EV

Canada-based Electrameccanica Vehicles (NASDAQ:SOLO) sells a somewhat different EV. The Solo EV might look like a regular car from the front but it has only one wheel at the back. It is a single-passenger three-wheeled, battery-powered electric vehicle that the company markets as a short-range vehicle for commuting. The Canadian group plans to expand with a plant in the U.S. In early June, it narrowed its choice to five states. Electrameccanica could easily become an acquisition target in the future. But for now, it is still a company with minimal revenue.

Exchange traded fund to cover anyone building a strong presence in the EV space

Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV) is an exchange-traded fund that seeks to invest in companies involved in the development of autonomous vehicle technology, electric vehicles, its components and materials, such as batteries, software and hardware.

It has 75 holdings with net assets close to $30 million. Since we are still on the first pages of the EV book, many of these funds resemble broader tech ETFs. The fund’s top three holdings are none other than Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA) and Microsoft (NASDAQ:MSFT). Tesla is also in there, of course, but in seventh place. The top ten companies account for almost one third of the fund. Year-to-date, the fund is up about 9% and it hit an all-time high of $16.25 less than a month ago.

Exchange traded fund focused at battery technology developments

Global X Lithium & Battery Tech ETF (NYSEARCA:LIT) has 43 holdings with net assets close to $690 million. It focuses on the whole lithium cycle: from mining and refining the metal, all the way through battery production.

The main disadvantage of EVs is their hefty price tag. This figure is greatly influenced by the cost of the car battery. This is an area where lithium-ion batteries are heavily used. Therefore, anyone who believes in electrification should keep track of the developments on this front.

The fund’s top three components are Albemarle (NYSE:ALB), Tesla, and LG Chem (OTCMKTS:LGCLF). They comprise approximately 22% of the fund. More impressively, the fund is up over 37% year to date and  has hit a 52-week high at $38.71 just a month ago.

Solar power to accessorize super EVs

Worksport (OTC: WKSP) is soon to debut its line of its innovative pickup truck tonneau covers in the U.S., its biggest market.  The company’s TerraVis innovative technology has the potential to disrupt the overall automotive market as it integrated solar power into its tonneau covers. Its generator can store energy and increase the driving range of the vehicle. Moreover, Worksport’s pricing will make this complex technology affordable and accessible. Considering pickups are the #1 vehicle in the US and tonneau covers its #1 accessory, Worksport could have an interesting growth potential ahead.

Technology advancements ahead

Automakers need to find out a way to achieve economies of scale to make EVs more affordable and build a massive charging infrastructure all over the globe, which is perhaps an even more daunting task. But these stocks have what it takes to lead the way into electrification with new technological developments.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire 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

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BenzingaEditorial

Lyft Vs Uber Is No Longer the War We’re Interested In

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Uber Stock News

On Wednesday, Lyft Inc (NASDAQ: LYFT) reported its second quarter results for the period that ended on June 30th. This was its first full quarter during the pandemic that ended the life we knew practically overnight. Not surprisingly, Lyft reported a dramatic revenue drop of 61%.

The full furry of the pandemic

The second quarter parked more than 17,000 airplanes as April passenger volume dropped 90%. Skies were empty, but so were streets and hotels. Hotel occupancy fell to 24.5% which is a US record low. World cities were quarantined. Bars, restaurants, cinemas, theatres and all popular destinations such as Walt Disney’s Corporation (NYSE: DIS) theme parks were entirely shutdown. Companies were managed from home, so employees had no need to commute by rideshare. Business travel, a growing part of the rideshare industry, is predicted to drop over 35% this year.

Lyft’s results

During the second quarter, Lyft delivered a net loss of $437.1 million. The company at least managed to beat Wall Street expectations of 99 cents per share with adjusted losses of 86 cents. Revenue of $339 million also exceeded Refinitiv’s estimate of $336.8 million. With 8.7 million active riders, it achieved a revenue per rider of $39.06. Although it did not offer any guidance, Lyft expects to achieve profitability on an adjusted basis during the fourth quarter of the following year. Unlike its primary competitor, Uber Technologies Inc (NYSE: UBER), it does not have a food delivery, freight or investments and operations overseas to help it make up for losses in travel and transportation. Thanks to Uber Eats that doubled during the pandemic, Uber managed to exceed analyst expectations. Revenue did decline, but the increased demand for its diversified services greatly amortized the blow.

But a rare bright spot for Lyft is that rides in July increased 78% compared to April. This figure provides a glimmer of hope for the undergoing quarter. But despite the good news, these 8.7 million active riders will now need to be classified as ‘employees’ which brings a whole new set of issues.

Both ride hailing giants lost the battle against CA

Uber and Lyft’s war against California is far from over but they lost the first battle. On Monday, San Francisco Superior Court judge issued a preliminary injunction requiring the gig-economy companies to reclassify their drivers as employees. This means that their drivers will be entitled to minimum wage, unemployment insurance, workers’ compensation and paid sick leave.

President and co-founder of Lyft, John Zimmer, said during the earnings call on Wednesday that the company may need to suspend its ride-hailing operations in California which makes about 16% of its rides starting on August 21 if a court does not overturn the ruling which enacted the Assembly Bill 5, commonly known as the ‘gig-workers bill’.

Reclassification of independent contractors to employees would result in higher prices, fewer available rides and hundreds of thousands of drivers losing their jobs. The resulting wages and benefits would also cost both companies, neither of which are profitable, hundreds of millions of dollars.

The future after the pandemic

Like with many travel-related industries, the demand for rideshare seemed to have disappeared into thin air back in April with Lyft and Uber seeing a severe drop between 70% and 80%. Although things are improving with eased social distancing measures, we are still far from winning the battle against COVID-19. The underlying concern is whether the fear of infection has forever changed the demand for the rideshare model? Only one thing is certain – we’re in for an entirely ‘new normal’ even once we put this pandemic behind us. Moreover, no one knows exactly how will this new normal look like.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire 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

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