In her semi-annual Congressional testimony, on July 15, Federal Reserve Board Chairwoman Janet Yellen targeted Wall Street hype, and the valuations of social media stocks, claiming that they are “substantially stretched [in price].” Wall Street’s predictable reaction to this statement sent social media stocks tumbling, as investors feared Yellen was implying the formation of an imminent bubble.
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Our Chronic Addiction
As the United States slowly inches toward ending its ill-fated War on Drugs, first decriminalizing marijuana, we have begun to see the first attempts to build legitimate businesses around pot. With the legalization of marijuana in Colorado and Washington, the growth of medical marijuana in several states (including California), and the diffuse relaxation of penalties for pot-related crimes, many have recognized the enormous potential market for legal weed, especially if current trends continue.
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Storm On The Horizon
Last month, my colleague, Zac Cherin, covered Tesla Motors CEO Elon Musk’s decision to share Tesla’s technology patents with its competitors. His analysis of the long-term benefits to Tesla — a new market for its batteries, potential allies in lobbying the government, and a chance to share the cost of expanding its supercharger network — over the short-term losses of an exclusive rights to technology was superb.
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Dirty Dov: The American Apparel Scandal
After accusations of sexual harassment and misconduct, the American Apparel (APP) Board of Directors has fired long time CEO and founder Dov Charney. The highly anticipated announcement was released two weeks ago. However, the outspoken and flamboyant Charney has made it clear that he will not go down without a fight, vehemently defending himself from the company he established.
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Filthy Rich
Yesterday, the former CEO of Microsoft (MSFT), Steve Ballmer, announced his intention to buy the Los Angeles Clippers from the embattled Sterlings for $2 billion. While the deal is by no means final, according to the LA Times, it appears likely to go through. Furthermore, although this is big news, the funding behind Ballmer’s acquisition of the Clippers is even more intriguing (and raises serious questions about Microsoft’s executive pay plan).
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The $50 Billion Acquisition
Last week, AT&T (T), the second largest wireless provider in America, announced its intent to purchase satellite television provider DirecTV (DTV) for $50 Billion. The takeover will allow AT&T to bundle more television, mobile, and Internet plans while improving the quality of its overall services. By acquiring DirecTV, AT&T will now serve more than 26 million video users in the United States.
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Sprint, Your New BFF
Wireless telecommunications provider Sprint (S) aims to expand its share of the cellular services market by acquiring T-Mobile (TMUS), the fourth largest cell carrier in America. This move would not only cement Sprint’s position as the third largest American carrier, but would also increase its mobile spectrum, allowing Sprint to better compete with Verizon (VZ) and AT&T (T), the top two American market leaders.
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