Happy Friday everyone! I’m particularly excited for this weekend since according to my weather app, we’ll finally be seeing some warmer weather in the mid-atlantic! I can’t take this 25 degrees and windy nonsense anymore.
And now for our Friday tradition, here’s a recap of the key (mostly business) news this week.
- RadioShack declares banktruptcy
“Staples has reached a deal to buy Office Depot for $6.3 billion. While RadioShack has reached a deal to buy an old futon on Craigslist.” – Seth Meyers
In a move that surprised no one, RadioShack (RSHC) declared bankruptcy yesterday. The company has been mounting losses for years. In fact, RadioShack was so cash strapped that it couldn’t even afford to close its stores (turns out it’s more expensive than you think), and was only able to close 175 out of a proposed 1,100 stores last year. Now the company has reached a deal to sell up to 2,400 of its 4,000 stores.
Interestingly, RadioShack won’t be going away all together. Sprint (S) will create a “store within a store” in up to 1,750 stores. So the stores will be co-branded, and owned by Sprint, but customers will still be able to purchase RadioShack products, services and accessories there.
Turns out even this star-studded commercial couldn’t save RadioShack…
- Twitter finally pulls off a good earnings report
Twitter (TWTR) reported earnings last night, and for once it was met with a good reaction in the market. The company showed strong growth over last year and beat analyst estimates. Fourth-quarter earnings per share (EPS) were 12 cents, vs. analyst estimates of 6 cents and last year’s 4Q EPS of 2 cents, and revenue was $479 million, vs. analyst estimates of $453 million and last year’s 4Q revenue of $243 million.
Investors were also excited about Twitter’s announcement of a deal with Google (GOOG), which would allow tweets to show up in the search engine. The stock is up about 12% after the announcement.
- Staples is set to buy Office Depot
“I wouldn’t marry you if you were the last man on earth… Oh wait, we’re the last two left? Never mind.” – Staples
Earlier this week, Staples (SPLS) agreed to buy Office Depot (ODP) for $6.3 billion. The deal would merge the last two big office supply stores left. Staples estimates the deal will increase revenues and allow them to cut costs by $1 billion. Instead of celebrating though, investors sent Staples’ stock down 12%. Why? Antitrust laws.
Given that Staples and Office Depot are lone survivors in their industry, the merger could create a monopoly in the office supply world. Which means the Federal Trade Commission (FTC) will investigate the merger and needs to approve it before it goes through. Things are a bit complicated here though, since there are now plenty of non-office supply stores where you can buy office supplies, such as Amazon, Wal-Mart, and Target.
Luckily, Staples has an out. It can back out of the deal if the FTC makes things too messy.
- Jordan fights back
After ISIS brutally murdered a captured Jordanian pilot, Jordan is fighting back. Yesterday, Jordanian fighter jets carried out airstrikes against ISIS, then returned to fly over the slain pilot’s hometown. The efforts were all slickly videoed and aired on state TV, a clear retaliation to ISIS’ video. As the Jordanian armed forces said on TV, “this is just the beginning and you shall know who the Jordanians are.” Now some lawmakers are calling for increased US support of Jordan’s airstrike efforts.
- Turns out the FCC likes to binge watch Netflix too
Speaking of government regulation, the head of the Federal Communication Commission (FCC) came out in full support of net neutrality this week. Net neutrality is the idea that all websites get equal treatment from internet providers, so this blog gets to load just as fast as Amazon does. Internet providers are against net neutrality, as they want websites to have to pay for faster internet. There were even rumors that the providers were slowing down Netflix’s connection to help out their cable TV divisions.
But now the FCC chair has proposed the “strongest open Internet protections” for the Web, and wants to reclassify the internet as a public utility. The proposed laws would ban internet providers from blocking content or creating fast lanes for Web services that can pay for preferential treatment. Some people are surprised he took such a harsh stance, since he used to be a lobbyist for the cable industry. The fact that President Obama came out in strong support of net neutrality in November may have had something to do with his decision.
- Just for fun: The cutest commercial of all time