Connect with us

BenzingaEditorial

HP Is Playing Hard to Get but Its Rejection Could Lead to Proxy Wars

Published

on

HP News

HP Inc (NYSE:HPQ) rejected Xerox Holding Corporation’s (NYSE:XRX)’s $33.5 billion cash-and-stock offer. But this wasn’t a simple second no to the bid but they went ahead to explain their sentiment of ‘feeling insulted’. HP’s board of directors found that this proposal significantly undervalues the company, as explained in a published letter on Sunday. So, things are definitely getting hostile.

HP Inc

Xerox had offered HP shareholders $22 per share. This deal involves a cash portion of $17 and 0.137 Xerox share for each HP share. HP feels that this is too little. Moreover, not only does HP feel that the proposal does not constitute a basis for due diligence or any sort of negotiation, but the board also wanted to emphasize that the company is not in any way dependent on a Xerox value combination. The company has great confidence in its strategy and its efforts to drive sustainable long-term value for its shareholders.

But there’s no argument that HP is facing some heavy headwinds as the company announced in October it would lay off between 7,000 and 9,000 workers. But this is part of its broad restructuring plan is aimed at saving the company $1 billion a year by the end of fiscal 2022. And still, HP has a more than three times greater market valuation than Xerox, valued at about $29 billion.

Xerox

Also in its letter, HP expressed concerns regarding Xerox’s ability to raise the cash portion in question along with the prudence of the resulting outsized debt burden on the value of the combined company’s stock even if the financing were obtained. Also, HP is worried whether Xerox’s exit from Fujifilm’s (OTC:FUJIY) joint venture earlier this month left a “sizeable strategic hole in Xerox’s portfolio”. And everyone, including HP, noticed the decline of Xerox’s revenue on a trailing 12-month basis from $10.2 billion to $9.2 billion since June 2018. Moreover, its revenue has been declining since 2012 and was expected to decline to 9.24 billion in 2019.

But, on a brighter note, its stock jumped 16% on its earnings beat a month ago. Its shares rose due to beating FactSet estimates and the fact that the company upgraded its earnings and cashflow guidance.

There’s a reason why Xerox is an icon of the printing solutions industry, but the reality is that this is a declining market as the world is becoming more and more digitalized. However, comparing to HP whose stock fell 14.1 percent year to date, even despite declining revenue, Xerox stock jumped 77 percent year to date. So, from that perspective, Xerox outperformed HP and not by an inch. Moreover, considering what Xerox has been through, it is pretty amazing it is still ‘healthy enough’ to pull off making such a credible offer for buying yet another faded legend.

Outlook

Considering that Xerox threatened on Thursday to take its $33.5 billion buyout bid for HP hostile unless the company agreed to a “friendly” discussion in which it would open its books for due diligence before Monday, there seems to be a storm brewing. Especially since HP revealed in the letter that it minds the “aggressive attitude” and that Xerox is showing intent on forcing a potential combination on opportunistic terms and without providing adequate information. Proxy wars are on the horizon as Xerox’s board of directors threatened to go to HP’s shareholders if the company didn’t reconsider the acquisition bid by 5:00 p.m. EST on Monday, November 25, 2019.

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.

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

BenzingaEditorial

Walking on Sunshine Is Good – But Earning on Sunshine is Good Too!

Published

on

Solar vehicles stock news

Due to consequences of environmental pollution and the climate change, the whole world is gradually switching to the renewable energy sources, marking a true era of energy revolution. Solar energy is in high demand all around the globe. The global solar energy industry has witnessed a significant growth over the recent decades all over the globe with massive potential yet to grow. Consequently, world’s solar energy companies are enjoying increasing demand and rising sales. And in business, there are always top players who are leading the way.

Industry glimpse

The International Energy Agency (IEA) estimated that the total global solar photovoltaic power generation will reach 1,121TWh by 2022. As for the world’s largest solar energy market both in terms of solar energy production and solar power consumption is China. As a matter of fact, IEA suggests that China’s rapid increase of 53 GW capacity in 2017 was the major contributor to the overall global solar energy capacity growth. In early 2018, China even surpassed its 2020 solar PV target outlined in its 13th Five-Year Plan. And since 2012, China’s share of global PV demand has grown from 10% to more than 55%. For this reason, many China’s major solar energy companies are also the world’s leaders in this market. But the global solar energy market size is being boosted by rising concerns of environmental pollution and provision of government incentives to install solar panels. And there are increasing investments in renewable energy sector, also contributing to market growth.

JinkoSolar Ltd

Headquartered in Shanghai, China, JinkoSolar (NYSE:JKS) is currently both one of world’s largest solar energy companies and top solar panel manufacturers. It sells its solutions and services to a diversified international utility all over the world. And It was just awarded the ‘Top Brand PV Europe Seal 2020’ by internationally recognized research institute EuPD Research for the second consecutive year.

Canadian Solar Inc

Moving on to a different continent, Canadian Solar (NASDAQ:CSIQ), headquartered in Ontario, Canada, is also one of the largest solar panel manufacturers in the world, providing advanced solar energy solutions.

Franchise Holdings International Inc

Now this is when things get really interesting as Franchise Holdings International (OTC:FNHI) is bringing the best of both worlds. The company is bringing solar power and technology to the auto market and announced this week that they will start selling their products on Amazon Inc (NASDAQ:AMZN). Speaking of technology which can change the course of the entire electric era that is upon us and led by Tesla Inc (NASDAQ:TSLA). Due to its innovative technology, accelerating revenue growth and innovative products is what this company is all about. Franchise Holdings International is the holding company of Worksport Limited, an innovative automotive tech company that literally reinvented Truck bed covers with Solar technology.

The miracle combo- Solar Energy, Electric vehicles, Pickup Truck sales and Pickup Truck Bed Covers

These are all growing markets which will only show accelerate growth over the combining years. By integrating solar technology within tonneau covers, Worksport (fully owned subsidiary of Franchise Holdings International) developed a solar power generating truck bed cover to have power on demand both for work and sport outdoor activity. But its true potential lies in extending the driving range of the fast growing global market of Electric pickup trucks.

And that brings us to…

Tesla’s Cybertruck is about to enter the market next year. Its controversial looks aside, the Cybertruck objectively has the features and specs that can disrupt the EV segment entirely.  Yet there are psychological barriers that work against the vehicle’s favor, and one of them may very well be Tesla’s reputation as a California-bred, Silicon Valley-based company that makes sleek, futuristic cars – read: not the tough kind. On the other hand, veterans like Ford Motor (NYSE:F), General Motors (NYSE:GM), and others have this factor on their side for their own upcoming electric trucks.

Giga Texas Could Solve Tesla’s Cowboy problem

Texas is a large market for pickup trucks as this vehicle is so popular in the Lone Star state. Texas accounts for about one of every six pickups sold in the United States and with one of the most popular vehicles in the country, this is nothing less of a goldmine that Tesla can tap into – provided it manages to appeal to consumers.

If Giga Texas does work out, it will be difficult for Texas’ regulators and truck buyers to not support the vehicle as it is already compelling enough with its specs, features, and price alone. Add by being built by American labour at the heart of pickup country, it could even become the symbol of the US’ next-generation of trucking.

And it could even open up the state to more of the Tesla’s vehicles as well.

But Texas aside, the demand for the Cybertruck has been impressive so far, with the company getting enough orders to correspond to several years’ worth of production.

Great news for FNHI

The International Energy Agency (IEA) forecasted for electric vehicles to grow from 3 million to 125-220 million by 2030. With companies as Tesla, Workhorse (NASDAQ:WKHS) and Volkswagen (OTC:VWAGY) developing electric pickup trucks, with others hopping on the electric vehicles train like Fiat Chrysler Automobiles’ JEEP (NYSE:FCAU), Range Rover, BMW (OTC:BMWYY), Mercedes, Audi and a bunch of other players around the globe, this is all beyond good news for Franchise Holdings International. The SEMA research shows that truck bed cover sales almost doubled in just 3 years time it means all product lines of Worksport will benefit from several growing markets.

Countless opportunities ahead for FNHI

The solar truck bed covers will benefit both from the very young and fast-growing electric vehicles market and the enormous and also fast-growing renewable energy market. Moreover, with different ways of implementing their technology through partnerships or licence deals in the future, there are countless more opportunities when it comes to these new innovative revenue sources.

And due to its admirable portfolio of intellectual property under its belt, investors can rest assured no company can go around FNHI. And the most reassuring thing at the end of the day is: you can always sleep well knowing that ‘the Sun will come out tomorrow’.

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.

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

Continue Reading

BenzingaEditorial

Alibaba’s Looking for Black Swan Opportunities

Published

on

Alibaba Stock News

Alibaba Group Holding (NYSE:BABA) earnings for the period ended Dec. 31. have topped expectations but coronavirus is having a ‘negative impact’ on the business with packages not getting delivered on time, and this uncertainty has caused its stock to fall on Thursday. But on a brighter note, the China e-commerce giant also says coronavirus outbreak, the so-called Black Swan event, is helping to accelerate digital transformation with more online grocery orders and work-from-home experiences.

Fiscal third quarter

Revenue for the quarter increased 36% to $23.2 billion (161.5 billion RMB, up from 117.3 RMB) billion a year earlier. According to FactSet, Wall Street expected earnings of $2.28 on revenue of $22.8 billion (RMB159.7 billion). But for the very first time, the Chinese e-commerce giant’s cloud business topped RMB10 billion. Net income achieved amounted to 52.3 billion RMB ($7.5 billion). Adjusted earnings of $2.61 a share went up 47% from a year earlier. But most importantly, active consumers on Alibaba’s China retail marketplaces reached 711 million, an increase of 18 million which equals to 2.5%, from the previous quarter. As for mobile devices, active users on mobile devices reached 824 million, an increase of 39 million equaling to 5%. Revenue from its cloud operation jumped 62% to $1.4 million.

Coronavirus the Black Swan

The company is continuing to experience challenges stemming from the outbreak as there’s been a delay in employees’ return to work after the Lunar New Year holiday, with this celebration also greatly contributing to the pandemia. As a consequence, there is a negative impact on the ability for merchants and logistics companies to resume business as usual.

And management disclosed that the overall revenue growth rate is expected to be negatively impacted in the following quarter.

Revenue from local services expanded 47% before the impact of the virus could be felt. The fact that Alibaba anticipates that there could be negative revenue growth in these categories this quarter “shows the impact of the virus,” However, the issues seem to be largely supply-based, which is encouraging for Alibaba’s long-term prospects as there are also new opportunities on the consumer end.

Competitors

Meanwhile, its Amazon (NASDAQ:AMZN) managed to pause Microsoft’s (NASDAQ: MSFT) $10 billion Pentagon contract. A judge has issued a temporary injunction preventing the contract from moving forward until a lawsuit from Amazon is resolved. Amazon’s case is President Donald Trump’s personal animosity toward Amazon CEO Jeff Bezos and The Washington Post, which Bezos owns. Overall, it finds the contract to have “clear deficiencies, errors and unmistakable bias.” Its other competitor is also doing well, as Shopify Inc’s (NYSE:SHOP) stock has gained 222% over the last year and its price rose after a strong earnings report on Thursday, showing the company’s strong determination to hit the international front. Meanwhile, Walmart (NYSE:WMT) has a few clouds on its relatively blue skies as it is shutting down its personal shopping service that allowed New Yorkers to text message orders for home delivery. Jet black will be down on February 21 due to inability to find adoption or additional investment. So, there is no lack of headwinds in the global industry, but these e-commerce giants are still coping well. For now.

New possibilities

Management hinted that the challenges brought on by the outbreak could prompt long-term behavioral changes from Chinese consumers and businesses alike. More consumers are ordering groceries from their homes and more employees are choosing to work from home, two trends that Alibaba plans to account for in its various service offerings. But globally, there is the inevitable trend that more and more businesses and more and more customers are opting for a digital life and a digital working style. Black swan and Tchaikovsky aside, Alibaba is trying to balance investment spending with operational improvements in its core-commerce segment.

Outlook

Alibaba’s shares have dropped nearly 5% over the past month, but they did before climb 20% if we look at the past three months. And its revenue did rise 38% year-over-year during a strong quarter. In the release, it showed an increased user engagement and rapid growth in the cloud computing services. Not to forget that shortly after the outbreak, the company fiercely began procuring medical supplies from all around the globe, donating over 40 million units to affected cities. It is tentatively monitoring how is the situation evolving and also using the opportunity to identify new opportunities to provide support and value that  can be incorporated in its business model. And helping customers through difficult times during this one-off pandemic is also expected to contribute to sustainable long-term growth. And let’s not forget that the definition of a Black Swan event also psychologically entails that its definition depends upon the observer. And Alibaba can surely make it work to its own favour by finding new ways to provide value added services to its current and potential customers- and become a White Swan in this scenario.

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.

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

Continue Reading

BenzingaEditorial

Pepsi Releases Solid Quarter Results During Its Biggest Month of the Year

Published

on

Pepsi News

The beverage and snack giant Pepsi Co Inc (NASDAQ:PEP) topped Wall Street estimates for its fourth-quarter earnings and revenue. The only blurry side of the picture is the 2020 outlook that is below expectations. And this is the reason behind the fact its shares only rose less than 1 percent in premarket trading despite solid results. But, a lot of heavy advertising that took place during this year’s Super Bowl show the company’s determination to combat its competitors and the decline in consumption of soft drinks.

Fourth quarter results

The latest quarter saw a strong performance of North America’s beverage and snack divisions. As for the whole picture, earnings per share amounted to $1.45, adjusted from a revenue of $20.64 billion, Refinitiv’s expectations were $1.44 expected and $20.27 billion accordingly. Operating income slightly topped estimates of $2.73 billion with a figure of $2.7 billion. Net income amounted to $1.77 billion, or $1.26 per share. It is quite a drop from $6.85 billion, or $4.83 per share, a year earlier. Total revenue did rise nearly 6% to $20.64 billion and slightly topped expectations of $20.27 billion. And even organic revenue rose 4.3%. But the best news for its shareholders is surely the announced 7% dividend increase.

Strategy

In an effort to drive its organic sales, the company has been heavily investing in advertising with the aim to amplify the strength of its legacy brands. And just recently, with six ads and a host of events and onsite activations, Pepsi and Frito-Lay have made Super Bowl 2020 their biggest ever as Pepsi alone dropped $40 million. It remains to be seen whether this will be enough to combat The Coca Cola Company’s (NYSE:KO) strength when it comes to Diet Coke. But considering that Pepsi’s management is known for its conservative style, the gigantic costs were surely carefully determined to be worth it. And after all, considering that snacks and beverages are make such an important part of the Super Bowl, not to go as far as say you cannot even imagine it without them, this is really a massively important time of the year for Pepsi.

Amid decline in consumption of soft drinks, the company is turning towards snacks, hoping Doritos and Lay’s will offset this decline. It remains to be seen how will Pepsi along with other consumer-goods companies deal with the effect of the Coronavirus. Its snack rival, Mondelez International (NASDAQ:MDLZ), the Oreo cookie maker, has already seen it hurting its first quarter.

Outlook

This quarter report clearly reflects that profits were held back by operating cost increases and these could have offset managerial efforts cut costs. Pepsi expects 4% organic revenue growth for 2020 and 7% earnings per share growth after accounting for currency fluctuations.  In fact, it cited foreign currency as an expected headwind for 2020. But the strongest headwind bound to have a surely heavy impact on top and bottom lines is the weak soft drink demand as more and more consumers are becoming health-oriented and consequently, opting for healthier alternatives. Now that truly is a red flag for Pepsi.

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.

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

Continue Reading

Trending

Copyright © 2019 IAM Newswire. Market News, Insights, surveys and more.