FT : Adidas boss says large-scale reshoring is ‘an illusion’

Adidas boss says large-scale reshoring is ‘an illusion’
Sports shoe maker says vast majority of its manufacturing will remain in Asia

Asia’s entrenched supply chain makes the prospect of moving significant manufacturing back to automated factories in the developed world an illusion, according to the chief executive of Adidas in comments he said applied across the sportswear industry.

“Our production landscape is 90 per cent Asia-based. I do not believe, and it’s a complete illusion to believe, that manufacturing can go back to Europe in terms of volume,” Kasper Rorsted said last week during his first trip to Asia after taking the helm of the German company in October.

A riposte to political rhetoric about the return of manufacturing after a decades long move to Asian outsourcing, his comments also contrast to those of his predecessor Herbert Hainer, who told the Financial Times last year production was “coming back” to Germany.

Adidas does plan to ramp up production at fully automated “speed factories” in Germany and Atlanta staffed by robots, and this month announced a partnership with Silicon Valley start-up Carbon to produce trainers with 3D-printed soles at faster speeds.

But Mr Rorsted said: “I don’t see full automation in the next five to 10 years,” adding that Asia’s semi-automated manufacturing is still significantly faster than any 3D printing technology. The automated plants will manufacture about 1m pairs of shoes annually — a tiny fraction of the 360m pairs the company sells globally each year.

Adidas’s largest market is the US, where companies have been under pressure from the Trump administration to announce manufacturing bases in America.

“[Moving] to the US, the only thing you get out of it is potentially a political interest, you are moving into a market where you have no competence. Just financially it’s very illogical and highly unlikely that will happen. And that goes for the entire industry, I’m not speaking just for Adidas,” said Mr Rorsted.

“What you’re going to see is sophisticated manufacturing technology manufacturing shoes for a very small market segment, and then you’re going to see those sophisticated manufacturing technologies taken back into China,” he said.

Rising wages in China and a rising number of labour disputes have pushed many apparel manufacturers to shift production away from the Asian powerhouse to south and Southeast Asian countries.

But China was Adidas’s fastest-growing market last year, with a 28 per cent sales expansion which it predicts will remain in “double-digits” this year, increasing incentives to remain.

“Why will you have manufacturing in China?” said Mr Rorsted. “Because of the size of the market, you want speed to access the market. I’m not concerned about jobs in China, we have been a net creator of jobs in China, but the jobs will change over time.”

Asian plants will become more automated, he said, but there were some processes of the roughly 120 steps in creating an Adidas shoe that remain stubbornly resistant to automation. “The biggest challenge the shoe industry has is how do you create a robot that puts the lace into the shoe,” Mr Rorsted said. “I’m not kidding. That’s a complete manual process today. There is no technology for that.”

(ZH) North Korea Arrests US Citizen, Threatens To Sink US Aircraft Carrier As Ja

North Korea Arrests US Citizen, Threatens To Sink US Aircraft Carrier As Japan Deploys Warships

A third US citizen has been arrested and remains in custody in North Korea, according to South Korean news agency Yonhap. A man, a Korean-American professor in his 50s, identified by the surname Kim, had been in North Korea for a month to discuss relief activities and was detained at Pyongyang International Airport just as he was leaving North Korea, the agency reported.

The man was a former professor at Yanbian University of Science and Technology (YUST), Yonhap said, citing unnamed sources. YUST, a university in neighboring China, has a sister university in Pyongyang. An official at South Korea's National Intelligence Service said it was not aware of the reported arrest. The reason for his arrest is still unclear, and there has been no comment from the US authorities so far. South Korea’s spy agency, the National Intelligence Service, said it “was not aware” of Kim’s arrest, according to Yonhap.

North Korea, which has been criticized for its human rights record, has in the past used detained Americans to extract high-profile visits from the United States, with which it has no formal diplomatic relations. North Korea already holds two Americans. Ahn Chan-il, director of the World North Korea Research Center in Seoul, said that the North "seems to be intending to use professor Kim as leverage in negotiations" amid the current bad relations between the two countries.



Pyongyang airport

According to Reuters, Otto Warmbier, a 22-year-old student, was detained in January last year and sentenced to 15 years of hard labor by a North Korean court for attempting to steal a propaganda banner. In March 2016, Korean-American Kim Dong Chul, 62, was sentenced to 10 years hard labor for subversion. U.S. missionary Kenneth Bae was arrested in 2012 and sentenced to 15 years hard labor for crimes against the state. He was released two years later.

Since 2009, over 10 U.S. citizens have been detained in North Korea on charges of anti-state and other unspecified crimes. The widespread view has been that Pyongyang uses the detentions as bargaining chips in its negotiations with Washington.

* * *

Meanwhile, one day after North Korea lashed out at its biggest supporter in the region China, threatening Beijing with "catastrophic consequences" for siding with the U.S. over sanctions, North Korea said on Sunday it was ready to sink a U.S. aircraft carrier steaming toward the Korean penninsula to demonstrate its military might, as two Japanese navy ships joined a U.S. carrier group for exercises in the western Pacific.

"Our revolutionary forces are combat-ready to sink a U.S. nuclear-powered aircraft carrier with a single strike," the Rodong Sinmun, the newspaper of the North's ruling Workers' Party, said in a commentary. The paper compared the aircraft carrier to a "gross animal" and said a strike on it would be "an actual example to show our military's force". The commentary was carried on page three of the newspaper, after a two-page feature about leader Kim Jong Un inspecting a pig farm.

North Korea says its nuclear program is for self-defense and has warned the United States of a nuclear attack in response to any aggression. It has also threatened to lay waste to South Korea and Japan.

Additionally, as discussed previously, North Korea will mark the 85th anniversary of the foundation of its Korean People's Army on Tuesday when some speculate it may set off a nuclear test.

Donald Trump ordered the USS Carl Vinson carrier strike group to sail to waters off the Korean peninsula in response to rising tension over the North's nuclear and missile tests, and its threats to attack the United States and its Asian allies. The United States has not specified where the carrier strike group is as it approaches the area. U.S. Vice President Mike Pence said on Saturday it would arrive "within days" but gave no other details.

* * *

Adding to the growing military tension in the region, two Japanese warships, the Samidare and Ashigara, left western Japan on Friday to join the Carl Vinson and will "practice a variety of tactics" with the U.S. strike group, the Japan Maritime Self Defense Force said in a statement according to Reuters.

The Japanese force did not specify where the exercises were taking place, but by Sunday the destroyers could have reached an area 2,500 km (1,500 miles) south of Japan, which would be east of the Philippines. From there, it could take three days to reach waters off the Korean peninsula. Japan's ships would accompany the Carl Vinson north at least into the East China Sea, a source with knowledge of the plan said. U.S. and South Korean officials have been saying for weeks that the North could soon stage another nuclear test, something the United States, China and others have warned against.

Japan's show of naval force reflects growing concern that North Korea could strike it with nuclear or chemical warheads. Some Japanese ruling party lawmakers are urging Prime Minister Shinzo Abe to acquire strike weapons that could hit North Korean missile forces before any imminent attack.

Japan's navy, which is mostly a destroyer fleet, is the second largest in Asia after China's.

South Korea has already put its forces on heightened alert. China, North Korea's sole major ally, opposes Pyongyang's weapons programs and has appealed for calm. The United States has called on China to do more to help defuse the tension. Last Thursday, Trump praised Chinese efforts to rein in "the menace of North Korea", after North Korean state media warned the United States of a "super-mighty pre-emptive strike".

Barron's : Lampert’s Seritage Strategy Could Lead to Long-Term Gains

Lampert’s Seritage Strategy Could Lead to Long-Term Gains
The REIT is signing on new tenants who pay substantially more rent than did the closing Sears stores.

Sears Holdings, parent of retail chains Sears and Kmart, has been losing money for years, closing stores, and spinning off businesses. Asset sales and loans from the company’s controlling shareholder, Edward Lampert, who is also its chairman and CEO, have helped keep Sears afloat.
In the past year, Sears shares (ticker: SHLD) have tumbled nearly 30%, to a recent $13.40, as business trends have worsened, and a turnaround seems remote. One seeming casualty of Sears’ misfortune is Seritage Growth Properties (SRG), a real estate investment trust spun off from Sears in July 2015, which owns 235 properties, mostly Sears and Kmart stores, and partial stakes in 31 other properties—42 million square feet in all. Sears is its largest tenant, responsible for 79.5% of the REIT’s rental income in 2016.
Concerns about a potential Sears bankruptcy filing have attracted short sellers to Seritage, which Lampert also chairs. If Sears reneges on terms of its master lease and stops paying rent, Seritage might find itself temporarily short of income, which would hammer its stock. The stock, at a recent $43, is off about 20% in the past year.
Yet, despite today’s risks and skepticism, Seritage is likely to offer an opportunity for significant long-term growth that could lift its equity value more than eightfold in the next decade. The REIT is redeveloping and re-leasing its properties to new tenants, including Whole Foods Market (WFM), Primark, and Cinemark Holdings (CNK), which are paying as much as $18 a square foot in rent, far above the $4 Sears pays under its master lease. As Seritage re-leases space, its reliance on Sears will diminish, and the average rent per square foot will rise.
If Sears doesn’t file for bankruptcy protection in the next three years or so, the danger to Seritage probably will pass. But even if a Sears filing occurs in the near term, Seritage should be able to ride out the crisis and build long-term equity value.
Manhattan-based Seritage has a roster of big-name investors. Lampert, 54, controls 3.8% of the A shares and all of the B shares through ESL Investments, giving him 8.5% of the voting power. Bruce Berkowitz’s Fairholme Capital, a longtime Sears holder, owns 12% of the A shares.
Warren Buffett, who heads Berkshire Hathaway (BRK.A), bought two million Seritage A shares, or a 7% stake, at the end of 2015 with his own money. The shares were around $35 at the time.
Mohnish Pabrai, managing partner of Pabrai Investment Funds, purchased Seritage shares for his funds about a year ago, but told Barron’s that he recently sold all of the stock. He says he has been surprised by the speed of the deterioration at Sears.
“I had first thought Sears would survive three or four years; now that might not be possible,” says Pabrai. In the event that Sears declares bankruptcy, he sees a high probability that the company will have a Chapter 7 filing, seeking to liquidate.
“If Sears doesn’t file until 2020, Seritage is fine,” he says. “It is possible they are fine if there is a late-2019 filing. Any filing before that means taking extraordinary measures.”
Those could include raising capital, which might dilute current holders.
Pabrai, who says his decision to sell Seritage was also motivated by a desire to invest in new ideas, estimates the REIT’s equity could be worth $12.6 billion in 10 years, compared with $1.5 billion last week, if it redevelops its square footage in that span. His 10-year estimate assumes a 6% cap rate—a rate of return on real estate value—and that Seritage takes on $4 billion in debt for redevelopment purposes.
He notes that with its robust cash flows, Seritage could buy and redevelop Sears properties it doesn’t already own. That would further increase the value of its equity. Even with a Sears filing, he says, “Seritage will survive.”
He adds, “I might get a chance to take another bite of the apple.”
SERITAGE BOUGHT its properties from Sears in a sale-and-leaseback transaction in the summer of 2015. Seritage’s joint ventures are with high-profile real estate and mall-development firms, including Simon Property Group (SPG), GGP (GGP), and Macerich(MAC). Its properties are situated in good locations in major U.S. markets in 49 states. Half are located in regional malls.
Sears pays rent and reimburses Seritage for taxes and maintenance. Total reimbursements were $62 million in 2016. The retailer also can terminate leases. If it chooses to do so, it pays Seritage one year of rent and tenant reimbursements. The master lease runs for eight more years, after which a renewal option kicks in. Under the terms, Seritage can reclaim from Sears up to 50% of the space over time.
In 2016, Seritage generated funds from operations of $107 million, or $1.92 a share, on $249 million in revenue. RBC Capital Markets analyst Wes Golladay expects property revenue to be flat this year at $250 million, but to jump 17% in 2018, reflecting higher-priced leases.
Seritage has been making solid progress. It signed 2.1 million square feet to new tenants in 2016. That lowers Sears’ share of rental income to 64% on an annualized basis, including signed but not occupied leases.
Golladay forecasts that Sears’ share of rental income will fall to 51% in 2018. He says that by early 2019, Seritage will be in the clear from any risk from Sears.
Golladay, who carries a $48 price target on the stock, noted in a recent report that while he is “encouraged by elevated leasing activity at Seritage…performance at Sears remains an overhang and a likely near-term driver for the shares.”
OPERATING RESULTS at Sears have been dismal. Revenue fell 12% last year to $22 billion, reflecting a 7.4% drop in sales at stores open at least a year. The retailer generated negative $1.5 billion in free cash flow.
Only three Wall Street analysts cover Sears. Evercore’s Greg Melich wrote of the company in a March note that “operating as a retailer will continue to result in large cash operating losses, and liquidity remains driven by asset sales.” Melich looks for an 18% revenue decline this year, and $1.1 billion in negative free cash flow.
Sears has shrunk its business by slashing costs and closing stores. Last year, it sold its Craftsman brand to Stanley Black & Decker (SWK) for $525 million. This year, management plans to sell at least $1 billion in real estate and cut $1.25 billion in costs.
Sears’ liabilities are hefty, with net debt of $3.9 billion and underfunded pension liabilities of $1.75 billion. In its annual filing, the company warned about its ability to continue as a “going concern,” but the addition probably reflected the implementation of a new Financial Accounting Standards Board rule requiring companies to share such information, instead of leaving it up to auditors.
Lampert’s ESL and Fairholme hold roughly $2 billion of Sears’ debt. If operations don’t turn around and they continue to fund the retailer, the timing of a potential bankruptcy filing could be delayed.
Lampert and Berkowitz also control 85% of Sears’ equity. If Sears filed for bankruptcy via Chapter 11, seeking to reorganize, it could continue running some stores and make lease payments. Melich, of Evercore, sees a higher probability of a prepackaged Chapter 11 filing.
Lampert and Seritage CEO Benjamin Schall couldn’t be reached for this story.
Seritage could generate $55 million in free cash flow this year, before paying an annual dividend of a dollar a share. Any loss of Sears’ payments would hurt in two ways: Seritage would lose both rental income from Sears and tenant reimbursements. Seritage has $64 million in annual interest expense on its $1.1 billion in debt and roughly $400 million left to spend on redevelopment projects. Its balance sheet, which looks sufficient to cover current needs, holds $140 million in cash and $280 million in untapped credit, including a term loan from ESL.
If necessary, Seritage has options to raise capital. The REIT could sell its share of its joint-venture properties or its undeveloped properties, or take in additional investment.
Pabrai doesn’t think an equity raise is likely; he says Seritage will have no trouble lining up private capital. In addition to Lampert, he ticks off a list of potential investors that could include Berkshire Hathaway, Bill Ackman’s Pershing Square, and Cascade Investment, Bill Gates’ investment vehicle.
He puts the maximum capital raise at $1 billion, followed by $1 billion over a few years for redevelopment projects. The big risk for current shareholders would be the extent of any potential dilution. That, too, could lower the long-term stock opportunity.

Berkshire Hathaway’s 2013 annual letter offers clues as to what Buffett sees in Seritage. In the letter, Buffett discusses two real estate investments he made with his own funds in the 1980s and ’90s. One was a building in lower Manhattan near New York University in which he invested with partners in 1993, during a commercial real estate downturn. That building’s largest tenant occupied 20% of the space and was paying $5 per square foot. The other tenants were paying $70 per square foot.
“The expiration of this bargain lease in nine years was certain to provide a major boost to earnings,” Buffett wrote. In time, as the old lease expired, earnings tripled.
MALL OWNERS have been suffering as retailers have closed up shop. Macy’s (M) andJ.C. Penney (JCP) have announced store closures, leaving other landlords to compete with Seritage for new tenants.
Still, Seritage properties have been successful at attracting growing companies. Last year, fast-casual chain Shake Shack (SHAK) became a tenant.
For investors with a 10-year time horizon, owning Seritage could work out well. But the next two years will be critical. If Sears files for bankruptcy protection and Seritage shares drop, investors will be able to snap up a bargain. If a Sears filing doesn’t occur, Seritage’s stock could move higher in the near term—and post substantial gains thereafter.

9to5.com : Tim Cook reportedly threatened to remove Uber from the App Store in C

Tim Cook reportedly threatened to remove Uber from the App Store in CEO meeting

Uber has long been the suspect of user tracking allegations on iOS, with the company itself addressing the problem as recently as last year. A new wide-raging profile from The New York Times, however, offers more detail on Uber’s location tracking habits, and how they almost got the app banned from the App Store…


The profile covers a variety of different things about Uber and is well worth a read, but the most startling tidbit of information is just how far Uber went in trying to trick Apple engineers. What Uber wanted to do was assign a persistent identity to iPhones with a small piece of code, better referred to as “fingerprinting.” This tactic, however, is in complete violation of Apple’s rules as the company believes a device should offer no trace of the owner’s identify after being erased.

Here’s how Uber maneuvered around these rules:

So Mr. Kalanick told his engineers to “geofence” Apple’s headquarters in Cupertino, Calif., a way to digitally identify people reviewing Uber’s software in a specific location. Uber would then obfuscate its code from people within that geofenced area, essentially drawing a digital lasso around those it wanted to keep in the dark. Apple employees at its headquarters were unable to see Uber’s fingerprinting.

As you might expect, however, it didn’t take long for Apple and its engineers to catch on to Uber’s tactics and the issues went straight to the top. Tim Cook called Uber CEO Travis Kalanick to come meet with him on Apple’s campus. Cook reportedly opened the meeting with a simple, “So I’ve heard you’ve been breaking some of our rules.”

He went on to demand that Uber stop the fingerprinting and put the app back in compliance with Apple’s privacy guidelines. The consequence for refusing this demand from Cook, was that Uber would be removed from the App Store.

For Mr. Kalanick, the moment was fraught with tension. If Uber’s app was yanked from the App Store, it would lose access to millions of iPhone customers — essentially destroying the ride-hailing company’s business. So Mr. Kalanick acceded.

Last December, Uber was accused of tracking customers for weeks after their last trip. While Uber explained itself, it’s clear that the company still has some issues with location data.

TechCrunch : How to make Twitter profitable

How to make Twitter profitable

For better and sometimes worse, Twitter is one of the most powerful forces on the planet. Twitter has arguably played a critical role in at least two of the defining political upheavals of our era: The Arab Spring and the election of a political outsider, Donald Trump, as president of the United States.
Every day, Twitter contributes to the political debate, the sharing of ideas and the widespread dissemination, via links, of news articles and the otherwise obscure findings of academics and nonprofit studies. And, each day, this activity on Twitter contributes to meaningful, ongoing political debate across societies and across the political spectrum.
Of course, Twitter also is filled with conversations related to our everyday lives. Sometimes they are meaningful, sometimes they are not. But, for many people, Twitter plays a central role in how they connect with friends and family. Like every social platform, there is noise filled with high-minded discussions as well as seemingly mundane conversations.
What is perhaps unique about Twitter is the dichotomy between this valuable role in empowering and connecting people and its ongoing lack of profitability. With restructuring charges, Twitter’s net loss in the fourth quarter of 2016 was $167 million, or 23 cents a share, and less than 1 percent year-over-year revenue growth. For 2017, the company has announced plans to achieve profitability, largely through staff cuts. Skepticism that profitability will be achieved is high.
At the same time, many believe these layoffs mortgage the company’s future by cutting the sales force that generates revenues and the R&D staff that makes the service more appealing over the long term. In 2009, after writing a book arguing that extreme and growing economic inequality would lead to societal dangers, for our politics and the health of our economy, I became an active Twitter user. Over the years, my activity has waxed and waned, but Twitter remains the central mechanism I use to share my ideas.
At the same time, as an internet marketer, I have developed Twitter campaigns for myself and commercial clients. The net result is that I have a strong understanding of how Twitter can build awareness and influence in the political, nonprofit and commercial realm. Most important, my belief in the fundamental value of the service, and the benefits it brings the world, is very high.
A simple proposal
Twitter, like all social media, has evolved dramatically since its founding. What the founders fully envisioned we cannot know. My guess is Twitter’s founders never envisioned corporate accounts with millions of followers. I believe they set out to create a service that would connect people with each other.
Nonetheless, there is one thing we do know: Today, many business entities have millions of followers and communicate with these followers using Twitter as a tool to promote their products and services. This is free advertising, no ifs, ands or buts.
What is perhaps unique about Twitter is the dichotomy between this valuable role in empowering and connecting people and its ongoing lack of profitability.

So, here’s a proposal to radically change the economics of Twitter: Charge businesses that exceed a set number of followers (perhaps 250,000) a monthly fee based on their total number of followers. To provide a sense of scale, here are the follower counts for a cross-section of well-known brands:
  • @TeslaMotors 1.4 million
  • @Verizon 1.7 million
  • @Pepsi 3.1 million
  • @CocaCola 3.4 million
  • @McDonalds 3.4 million
  • @Intel 4.7 million
  • @Marvel 4.9 million
  • @GoogleChrome 6.1million
  • @SamsungMobile 12.1 million
  • @Google 17.6 million
I suspect most of these businesses spend large sums (with in-house personnel or outside agencies) planning and developing their Twitter activities — a clear form of advertising that provides value, with no portion going to Twitter. Why would it be wrong for Twitter to capture, through fees, a piece of the economic value its service brings these companies?
To assess the potential magnitude this change might have on Twitter’s bottom line, let’s take a hypothetical example: Suppose Twitter collected an average annual fee of $600,000 from 2,000 businesses. This would represent increased annual revenues of $1.2 billion. Of course, there would be costs associated with implementing this policy, but the upside is enormous: Most of this $1.2 billion increase in revenues would drop straight to the bottom line.
The reality of value delivered
I don’t claim to know what the right fee is, or how this fee should increase by the number of followers involved. But, let’s ask the most important question: Would a major brand leave Twitter if a new fee of $50,000 per month were imposed? Companies with millions of followers derive far greater economic value than this monthly sum. Indeed, I strongly suspect many companies spend far more simply staffing their Twitter-related social media campaigns and working with outside agencies. Of course, this would be a cost, which adds to these existing expenses. But, once again, I strongly suspect tweets bring these companies far higher returns than this proposed monthly fee plus any social media management expenses. I also believe these companies know it.

In short, a central reason for Twitter’s profitability problem is that it has been far too good a deal for large advertisers (defined as any company with a substantial Twitter following, which means the company has an active, significant Twitter presence).
Yes, I think it’s legal
I have discussed this idea with a limited number of colleagues. Inevitably, they ask whether charges of this type, levied solely on companies with large follower bases, might represent some form of illegal price discrimination. My understanding is that this suggested revenue idea is entirely lawful.
Here’s how it can be done: First, let’s take a “worst case” example that assumes, under the applicable law, corporations that are Twitter users have the same rights as people. Then, these charges could be defined as advertising fees on any Twitter user that has more than 250,000 followers. (Remember, Twitter allows users to block followers, so no one forces a person or corporation to move from the free classification to the new, higher-follower paid classification).
Second, discounts for different categories of advertisers (which can be defined by purpose or commercial segment) are, I believe, legal. As a result, individuals and entities with a non-commercial purpose, such as politicians, journalists, academics, news entities, governmental entities and all nonprofits could be exempted from these advertising fees. They would effectively receive a 100 percent discount. Indeed, significant discounts for nonprofits and educational institutions are commonplace across the spectrum of internet services.
Why would it be wrong for Twitter to capture, through fees, a piece of the economic value its service brings these companies?

Finally, the group that may present the most significant issue for this proposal are celebrities: movie stars, athletes, authors and musicians. One again, I believe the issue of category discounts resolves this concern. Twitter could decide not to charge these people — who for many Twitter users add value to the community — or to charge a lower fee (a specific discount for this category).
Now, let’s look at the alternative scenario, and assume corporations do not have the same rights as people. Twitter can freely exempt all individuals from charges. Here, Twitter could require corporations to pay advertising fees based on their volume of followers, with fees starting when a firm has more than 250,000 followers (or whatever number is deemed appropriate). In this scenario, discounts would apply, as frequently happens now online and offline, to entities that have a political, informational or non-commercial purpose (i.e. news entities, political entities, governmental entities and nonprofits). The one difference is that on Twitter these discounts would total a full 100 percent.
Adding value for corporate users
Next, Twitter could take a small piece of the large revenue increase discussed here and create services that add additional value for these paying, large corporate users. I can imagine a wide range of mechanisms that Twitter, with access to its “firehose” of data, could deploy to increase the effectiveness of large businesses actively using its service.
New services may be valuable, but are not necessary
In recent years, Twitter has based its path to profitability on service enhancements designed to increase user engagement and growth, and on a transformation into a media consumption platform. Twitter’s recent loss to Amazon of its “marquee deal” to stream NFL Thursday night games casts an additional shadow on this often-questioned media-related strategy.

As an active Twitter user, I also can imagine a wide range of service enhancements that would increase my engagement. For example, I simply can’t imagine why Twitter is not the premier source for an automated, real-time feed of the personalized news topics that meet my interests. The existing “News,” “Trends” and #search features fall short of satisfying this craving. However, issues associated with creating more engaging features are outside the scope of this article.
Nonetheless, new service features, while desirable, are not needed for Twitter to achieve far higher profitability: A radical shift in its revenue model will enable Twitter to achieve the profitability it merits. Twitter’s existing user base already delivers enormous marketing and advertising value to businesses. To date, Twitter, in contrast to other media, has not sought to capture an appropriate share of the value its service creates for businesses benefiting from the use of its platform.
Jack, give me a call
Jack Dorsey, we have never met, and you probably resent people like me suggesting ideas that no doubt you have considered and rejected. But, let’s face it: Your business is not improving. You are at a crossroads: You can be Yahoo (without a buyer) or a reimagined business, with Facebook-like potential. I suggest you choose the latter. Let’s talk.

TechCrunch : Online grocery platform Farmdrop raises £7M Series A led by Atomico

Online grocery platform Farmdrop raises £7M Series A led by Atomico

Farmdrop, a farmer-friendly online grocery platform based in the U.K., has raised £7 million in Series A funding. Leading the round is Atomico, the London VC fund founded by Skype co-founder Niklas Zennström.
Originally launched in 2014 as a ‘click and collect’ service that let you order groceries online direct from farmer-producers and pick up your order at a local collection point, the company has since pivoted to door-to-door delivery but with the same basic idea of a marketplace that bypasses the mass supermarkets.
“The fundamental problem is that the supermarket’s dominance over the last fifty years has put huge amounts of downward pressure on farmgate prices,” explains Farmdrop co-founder Ben Pugh. “In this environment, the only option for producers has been to focus on yields and durability which has led to a big depreciation in the taste and nutritional quality of homegrown foods”.
To counteract this, the Farmdrop platform claims to remove (or replace) wholesalers and retailers from the supply chain, which enables it to pay producers roughly double what they would get from a supermarket. Specifically, I’m told that farmers receive around 75 per cent of the final shelf price. To put this in context, Pugh says that most farmers would be lucky to get 50 per cent from the supermarkets.
“Basically, Farmdrop is creating a profitable route to market for smaller farmers whose sole aim is grow foods that maximise flavour and nutrition. For customers we offer them the most affordable access to the freshest, farmer’s market quality ingredients,” he says.

Meanwhile, I’m told that the startup plans to use the new funding to improve customer experience, develop new technology for farmers to manage their own inventory, and launch new distribution hubs outside of London, with an opening in Bristol planned for later in 2017. It also says it reached annualised revenues of £3 million earlier this year.
Atomico’s Zennström comments: “Atomico likes to invest in companies looking to tackle some of the bigger sustainability challenges our planet is facing. That is why we’re incredibly proud to have led Farmdrop’s second investment round. They are deploying innovative technology to simplify the food chain and meet the growing demand for more sustainably sourced, local food”.
In addition to Atomico, Farmdrop’s other backers include Jon Reynolds, the CEO and co-founder of SwiftKey, Alex Chesterman, the founder of Zoopla, Nigel Wray, serial investor and chairman of Saracens Rugby club, and Quentin Griffiths, the co-founder of Asos.

>>> Novartis mandates Bank of America with potential sale of Alcon - report (tra

Novartis mandates Bank of America with potential sale of Alcon - report (translated)
22 APR 2017
Novartis AG (VTX:NOVN) has hired Bank of America regarding the potential sale of its contact lens care company Alcon, Basler Zeitung reported. The Swiss daily cited a Bloomberg article which said Bank of America has been mandated for the potential sale or spin-off of the business.
A Neue Zuercher Zeitung article said Novartis declined to comment.
The Basler Zeitung article appeared in print today on page 10.
The NZZ article appeared in print today on page 34.

>>> Heineken CEO says family ownership makes it less vulnerable to takeover (tra

Heineken CEO says family ownership makes it less vulnerable to takeover (translated) - Telegraaf.nl

Dutch beer brewer Heineken [AMS: HEIA] is less vulnerable to takeover bids because of its ownership structure, in which the Heineken family controls the holding company, CEO Jean-François van Boxmeer said in a longer interview with De Telegraaf.
The business has twice received hostile takeover bids from competitor SAB Miller [LON:SAB], the CEO said. The family decides whether it wants to sell the business and if so at what price, Van Boxmeer said in the item.

WSJ : Flood of Dollar Debt Could Come Back to Haunt Emerging Economies

Flood of Dollar Debt Could Come Back to Haunt Emerging Economies
Worry grows over impact on repayments if global growth eases or interest rates increase

Emerging-market companies are binging on U.S. dollar debt and that could become a source of trouble in some parts of the world if growth slows, interest rates rise or the dollar resumes its ascent.

Governments and companies in the developing world sold $179 billion in dollar-denominated debt in the first quarter, the most dollar debt ever raised in the first quarter and more than double the amount raised during the same period last year, according to data provider Dealogic.

In all, U.S. dollar debt stood at $3.6 trillion in emerging markets through the third quarter of 2016, an all-time high, according to the Bank for International Settlements. Including local currency debt, and emerging-market companies have increased their borrowing by a staggering $17 trillion since 2008, according to the Institute of International Finance.

The International Monetary Fund warned of risks in reports ahead of its semiannual meetings in Washington, saying a bout of investor risk aversion could expose $135 billion worth of corporate credit to repayment problems.


“Emerging-market corporates have made progress in terms of making their economies more resilient, but vulnerabilities remain,” said Tobias Adrian, the IMF’s top financial economist. He pointed to 2013’s so-called Taper Tantrum, when the Federal Reserve signaled it would end a bond-buying program. Global interest rates soared and emerging-market currencies tumbled, hitting their economies. “We have seen how global interest rates can have negative spillover effects on emerging markets, and those risks are still present.”

Companies with dollar borrowings can be especially exposed. If the dollar rises, it makes the debt more expensive to pay off.

Companies that don’t earn dollar revenues, including some telecoms, property developers and retailers, can stumble. Repayment risk is especially high in countries with large external deficits and low levels of foreign-exchange reserves. If the dollar appreciates faster than expected, some corporate borrowers, especially those who derive their revenues largely in local currencies, could find themselves in a currency mismatch and be forced to ask the central bank for help—which not all central banks are positioned to do.

“A rise in the dollar would be a double whammy for countries that have significant current-account deficits and significant amounts of dollar-denominated corporate debt,” said Eswar Prasad, a professor of trade policy at Cornell University.

For now, borrowers are getting in while rates are still low and investor appetite for more exotic, higher-yielding credit is strong. The government of Paraguay, which is rated below investment grade, sold $500 million of 10-year debt last month at a yield below 5%.

After the Latin American and Asian credit crises of the 1990s and 2000s, some countries stocked up on foreign currencies for emergency cash in times of shortages. Many also now better balance borrowing between domestic currencies and foreign debt. That’s why vulnerabilities around the globe are mixed.

Countries such as India and the Philippines, which have relatively low stocks of external debt and healthy foreign-exchange reserves, are in better shape, analysts say. Economies such as Malaysia and South Africa, which have small currency reserves and high levels of dollar-denominated debt, are at particular risk. Venezuela and Turkey look especially vulnerable.

“Some could still feel stress, especially where there are pre-existing political or economic strains,” said Maurice Obstfeld, the IMF’s chief economist.

A slew of missed payments by major telecom operators in South Africa and Turkey, as well as Venezuela’s largest oil producer, have already sounded the alarm for emerging-market corporate borrowers, reflecting the increasingly challenging environment of rising borrowing costs, sluggish earnings growth, low commodity prices and growing trade protectionism.

“The protracted period of low U.S. dollar interest rates led to borrowers in emerging markets taking more than their fair share of foreign currency debt,” said Lesetja Kganyago, governor of South Africa’s central bank.

The parent company of Turk Telekom AS, Turkey’s largest phone company, missed two payments of $290 million each to its lenders in September and March, following a slump in the lira and sluggish earnings. The company has been borrowing aggressively in recent years, securing a record $4.75 billion syndicated loan from a group of international and local banks. According to the company, total debt amounted to 15 billion lira as of end-2016, and 70% of it was denominated in dollars.

“When we see companies with large foreign-exchange debt, we will just walk away right now,” said Elena Tedesco, an emerging-market equity manager at Hermes Investment Management. She added the outlook for the Turkish lira is also unclear given the country’s political and economic uncertainties.

South Africa, which has been running a current-account deficit, saw the fallout when Cell C, the country’s third-largest mobile operator, missed interest payments in January on its €400 million bonds, citing rising inflation, a weaker rand and industry uncertainty, according to S&P Global. Venezuela’s state-run oil company PdVSA was late on its coupon payments worth $404 million in November, in an apparent struggle against low oil prices and falling foreign-exchange reserves.

In 2016, the number of defaulted dollar bond issues reached 32 in emerging markets, the highest since the financial crisis, according to S&P Global. More companies are poised for further downgrades, rather than upgrades, the rating agency said.

“There are potential vulnerabilities looking further ahead, particularly if the Fed were to raise rates much more aggressively than what the market has priced at the moment,” said Michael Grady, senior economist at Aviva Investors, which has $422 billion of assets under management.

>>> Barrons weekend summary: Positive on top US banks, JNJ, MGM, SRPT, SRG, ORLY

Barrons weekend summary: Positive on top US banks, JNJ, MGM, SRPT, SRG, ORLY; Cautious on ARNC, HOG, INFY

* Cover story: MORN has exerted an outsize influence on the mutual fund industry for 30 years, but under new chief executive Kunal Kapoor it will continue to undergo a transition with a move beyond data and research as passive investing grows more dominant. 

* Tech Trader: Tiernan Ray talks about the growing trend among tech companies of delivering products in beta form, so that “the future is not delivered anymore so much as teased,” as with GOOGL’s Google Glass or FB’s recent announcement about augmented reality. 

* Trader: The results of the French election could have a major effect on markets this week, says MS strategist Michael Wilson; Positive on JNJ: Company’s “revenue miss could be a buying opportunity now that its shares look more reasonably priced”; Positive on MGM: When the gaming giant reports earnings Thursday it won’t likely miss, and a drop in share price presents an opportunity for investors. 

* Features: 1) Positive on BAC, C, GS, JPM, MS, WFC: Six major banks trade at a discount to the S&P 500 after a selloff sparked by economic and political concerns, but their profit outlook is improving and the shares look like buys; 2) Positive on SRPT: Shares should appeal to investors because there’s a good chance company’s Duchenne muscular dystrophy drug, Exondys 51, will ramp up this year, making Sarepta an acquisition target; 3) Positive on SRG: The REIT spun off from SHLD is signing on new tenants who pay substantially more than shuttered Sears stores, and it offers the opportunity for significant long-term growth; 4) Positive on ORLY: Shares are down on an earnings miss and concerns about a move into auto parts by AMZN, but the company should be able to get past its problems, and cheap shares are a good long-term bet. 

* Profile: David Brown of Hawk Ridge Fund monitors companies carefully for catalysts, such as a change in regulation or a division with unseen promise (long: AAN, EHTH, RACE, FOGO, Opera Software; short: CVGW). 

* Interview: Paul Hickey and Justin Walters of Bespoke talk about their ten years in business and what they think about the bull market (picks: SOM, TRVG, ZTS; pans: BURL, P). 

* Follow-Up: Cautious on ARNC: The ouster of chief Klaus Kleinfeld and an upcoming proxy fight make shares of sister company AA a better bet for now; Cautious HOG: Iconic motorcycle maker faces declining ridership and an aging consumer base, making shares a risky bet despite their recent uptick. 

* European Trader: France’s presidential election is the most important European vote in years, more critical than the Brexit referendum, and it could dictate the future of the EU and the euro. 

* Asian Trader: Cautious on INFY, Tata Consultancy Services: Donald Trump’s executive order on H-1B work visas is more bad news for struggling Indian infotech outsourcers. 

* Emerging Markets: “Fixed-income investment in emerging markets has traditionally been dominated by sovereign Eurobonds, but yield-hungry investors are widening their horizons to corporate debt, with good results.” 

* Commodities: Gold has regained strength after a drop, reflecting concerns about the U.S. economy and worries about the European elections. 

* Streetwise: “An April survey of global money managers by Bank of America Merrill Lynch showed 83% of respondents consider U.S. stocks overvalued, the highest on record.