1) HP’s board has rejected Xerox’s $33 billion dollar takeover bid, for the same reason as Xerox’s previous offer, that the proposal significantly undervalues HP. Xerox first moved to acquire HP in November, but was rejected because HP stock holders would lose much of their value in the company. HP is a 2015 spinoff of giant Hewlett-Packard who has a market value of $300 billion dollars that dwarfs Xerox’s value of 7.7 billion dollars.
2) Mack Trucks, the manufacturer of large commercial trucks, announced plans to layoff 305 employees, which is about 13% of their payroll. After two years of high volumes of production, marked demand has dropped so the company must adapt to the lower demand. There are expectations of the truck market in America being down 30% this next year.
3) The American consumer continues to shun the traditional big department stores. Despite the monster holiday shopping season, America’s biggest department stores still lost money. This is a trend that has been in progress for several years as typified by Sears’ decline. Department stores such as JCPenny, Kohl’s and Macy’s continue to decline with dropping sales and store closings. Consumers are now going to big box stores and the internet commerce to save money, signaling a fundamental change in American consumerism.
4) Stock market closings for – 9 SEP 20:
Dow 28,956.90 up 211.81 Nasdaq 9,203.43 up 74.18 S&P 500 3,274.70 up 21.65
1 ) Hewlett Packard is buying the supercomputer maker Cray for $1.4 billion dollars. HP is intent on strengthening it position against IBM by expanding its high end computer line, expanding into AI (Artificial Intelligence), Internet of things and distributed computing offerings, and is expecting to see a return on investment in the next two years.
2) There are reports that the U.S. China trade talks have been put on hold, causing a reversal of the markets. The holdup is the increased scrutiny of Chinese telecom companies. This scrutiny is making it harder for Chinese companies such as Huawei to do business with U.S. companies.
3) Airline baggage fees is becoming an increasingly lucrative source of income. The U.S. airlines brought in $4.9 billion dollars from luggage fees, an 80% increase from 2009. Typical fees is $30 for the first bag, $40 for the second and $150 for the third. There are also expensive payments for heavy or oversize bags.
4) 17 MAY 19 Stock markets closing:
Dow 25,764.00 down 98.68 Nasdaq 7,816.28 down 81.76 S&P 500 2,859.53 down 16.79
Hewlett Packard one of the biggest technology and computer companies will soon have divided into two separate entities. The completion is supposed to take place November 1, 2015. The company will be a computer company and the other entity will be its printer company.
HP Enterprise will be raking in somewhere around $58 billion in revenue because of the split, whill HP Inc, will see around the $57 billion mark in revenue sales.
HP board approved of the demerger in the beginning of October and the markets rallied in favor of the demerger of the two divisions (printer unit and pc unit). HP stocks have been taking a hit the last few years because of certain improprieties in its business model, so dividing the company maybe suitable for long run performance. -SB