Business

Shunned by corporations, U.S. gun entrepreneurs launch start-ups

Larry Lopata and some friends were sitting around the campfire on a hunting trip when they came up with an idea for a new firearms product: an adjustable-length trigger, so people with different sized hands can comfortably share the same gun. The four business partners put $150,000 into development until last December when they were ready to seek more funds from investors. Crowdfunding sites such as Kickstarter and Indiegogo would have been perfect, but they prohibit users from raising money for weapons projects. So Lopata created his own, gun-friendly crowdfunding site, GunDynamics.com, which launched last month. While much of corporate America has turned its back on firearms-related business following mass shootings such as the Feb. 14 massacre at a high school in Parkland, Florida, that killed 17 people, pro-gun entrepreneurs are creating their own start-ups to fill the void. “Parkland really brought out this open warfare against the gun community,” Lopata said. Others who make their living in the firearms world have felt unwelcome on sites such as YouTube and PayPal and are also constructing online businesses to cater to gun-lovers. Some are promoting their self-reliance at the National Rifle Association annual meeting in Dallas this weekend. Since launching on April 19, Lopata has raised $6,720 for his project, which is seeking $50,000 to fund an initial production run of 5,000 triggers. The only other product on GunDyanmics.com, a device to reduce “muzzle climb,” when a gun barrel rises upon recoil, has won pledges of $7,850 toward a goal of $100,000. One prospective entrepreneur wants to develop the assault rifle of the future for the U.S. military, while another wants to create a new concealed-carry vest for women, Lopata said. Kickstarter and Indiegogo declined to comment beyond referring to their published policies, which prohibit crowd-funding projects involving weapons, replica weapons and weapon accessories. After the Parkland massacre, a number of major U.S. companies sought to disassociate themselves from the firearms industry. While the Second Amendment of the U.S. Constitution guarantees that the right to keep and bear arms shall not be infringed by the government, private businesses are free to turn away from guns, and many have. Bank of America Corp said it would no longer lend to companies that make military-style firearms for civilians. Dick’s Sporting Goods said it would stop selling assault-style rifles, and WalMart Inc, L.L. Bean and Kroger Co’s Fred Meyer stores raised the minimum age for firearms purchases to 21 from 18. Other companies pulled out of marketing deals that offered incentives to NRA members, including insurer MetLife Inc , Delta Air Lines and United Airlines, and the three rental car brands owned by Enterprise Holdings Inc. Tim Harmsen, star of the Military Arms Channel on YouTube and a celebrity at the NRA meeting, said he saw the backlash coming and prepared by creating his own “YouTube” for guns, called Full30.com – a reference to a full 30-round magazine. Full30 has taken on content providers that have been kicked off YouTube, which prohibits the sale of firearms or the provision of instructions on how to make guns or accessories such as high-capacity magazines or silencers.

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T-Mobile, Sprint to merge in all-stock deal

T-Mobile US Inc. and Sprint Corp. agreed on Sunday to merge in an all-stock transaction, following on-again, off-again talks to combine the two companies. Deutsche Telekom, which owns a majority stake in T-Mobile, will control 42% of the new company. SoftBank Group, which is the majority shareholder in Sprint, will control 27% of the company. The remaining 31% will be held by the public. Based on Friday’s closing stock prices, T-Mobile has a market value of $55 billion, while Sprint’s market value is $26 billion. The new company will be named T-Mobile, with current CEO John Legere remaining in charge, and will be headquartered in Bellevue, Washington, while a second headquarters will be located in Overland Park, Kansas – the current headquarters of Sprint. By combining, T-Mobile will become the nation’s third-largest mobile carrier service, following Verizon Wireless and AT&T, which rank first and second, respectively. “This combination will create a fierce competitor with the network scale to deliver more for consumers and businesses in the form of lower prices, more innovation, and a second-to-none network experience – and do it all so much faster than either company could on its own,” Legere said in a statement. “As industry lines blur and we enter the 5G era, consumers and businesses need a company with the disruptive culture and capabilities to force positive change on their behalf.” The merger will create more new jobs than T-Mobile and Sprint would separately, the two companies said in a press release, adding that the new company plans to invest $40 billion in its new network and business in the first three years – 46% more than both spent combined in the past three years. One of the major goals the new company hopes to accomplish is creating a strong 5G wireless network across America. Development of the technology – which would have significant economic benefits – is underway, with 5G networks expected to launch worldwide around 2020. Currently, China is ahead of both South Korea and the U.S. in overall 5G readiness. The highly-anticipated, more powerful wireless network is expected to provide significant economic benefits to the leader, something America experienced as the forerunner in the 4G race. By investing $275 billion into building 5G network infrastructure, three million jobs will be created and $500 billion added to the U.S. economy, according to data from CTIA, a trade group representing the wireless communications industry in the U.S. Still, the mega-merger will need to be approved by U.S. regulators, which has not been easy under President Donald Trump, whose administration sued to block the proposed $85 billion deal between AT&T and Time Warner last year. If it does receive regulatory approval, the new company will have more than 120 subscribers.

Hostess employees get a year’s worth of free Twinkies and Ding Dongs as a bonus

On January 31, Hostess Brands Inc. announced that not only would their employees receive monetary bonuses this year, but that they would also get a year’s worth of free baked goods! After enacting tax legislation, Hostess will be rewarding its 1,036 bakery and corporate employees bonuses of $750 in cash, a 401(k) contribution of $500, and a year’s worth of free product. “The recent tax reform changes have given us the opportunity to review our benefit and compensation structure with an eye toward further investing in our workforce — our extraordinary team of employees who have and continue to help make Hostess so successful,” said executive chairman C. Dean Metropoulos in a press release by the baked goods brand. “As we have done in the past, the company’s management and board take great pleasure in sharing the company’s success with our employees.” No, employees will not have to fill their cars with a year’s worth of Twinkies and Ding Dongs. On a weekly basis, a representative from each bakery location will choose a “product of the week” for the bakery and all eligible employees will be able to take home one multi-pack of the chosen item every week for an entire year.

🙂

U.S. Service Sector Hits 13-Year High

The U.S. service sector picked up momentum in January, reversing a slowdown at the end of 2017. The Institute for Supply Management on Monday said its nonmanufacturing index rose by more than four points to 59.9 in January, a far stronger reading than the 56.6 expected by economists. In December, the index slipped to 55.9. January’s figure is the highest in 13 years. A reading above 50 indicates that non-manufacturing business is expanding, while a reading below signals contraction. The survey tracks the performance of service-oriented companies, such as banks and restaurants, as well as real estate and construction. Fifteen of the 18 business sectors tracked by ISM experienced growth in January. ISM’s gauge of non-manufacturing employment rose to an all-time high of 61.6, up from 56.3 in December. Its index of new orders surged 8.2 percentage points to 62.7. The survey shows that the economy is off to a strong start in 2018.

Indeed!!   🙂

Comcast hopes for a TV windfall from Super Bowl, Olympics

Comcast’s NBC is airing both the Super Bowl and the Olympics in February, a double-whammy sports extravaganza that the company expects to yield $1.4 billion in ad sales, helping it justify the hefty price it’s paying for both events. NBC is banking heavily on these sports events since traditional TV ratings have slumped in recent years. Live sports are marquee TV events that draw most of the largest TV audiences, but even those ratings have declined. More Americans are dumping their cable packages — Comcast lost 33,000 video customers in the fourth quarter and 151,000 for all of 2017 — and advertisers are following consumers to their phones. Spending on U.S. TV ads is expected to grow an anemic 0.4 percent this year, according to eMarketer. In the October-December quarter, NBCUniversal’s broadcast TV ad revenue fell 6.5 percent, after a boost in 2016 from election ads. As it adapts to a slowing TV market, NBC is continuing some digital efforts from Rio and expanding others to meet viewers wherever they are — whether in front of a TV or not. The Super Bowl reaches more than 100 million people in the U.S., outstripping every other TV event. It’s the most expensive ad time on TV. This year’s Super Bowl is Feb. 4 and follows a two-year slump in regular-season NFL ratings, according to ESPN . But NBC has said it is not worried about a lack of interest. The game is an event that “transcends sport and even the game itself,” Dan Lovinger, an NBC Sports ad-sales executive, said in January, about three weeks before the game. NBC said then that it had nearly sold out Super Bowl ad spots and that on average, companies are paying more than $5 million for 30-second ads during the game. Kantar Media expects rates slightly higher than last year’s $5.05 million. Fox aired the Super Bowl in 2017, and said it had $500 million in ad revenues for the day. NBC has predicted about $500 million for the game and associated events this year. NBC also makes money from ads during events before and after the game and a special episode that day of its hit drama, “This is Us.” For the first time, it’s selling ads for the game that will only appear on its app or website. NBC is paying $963 million for the broadcast rights to the Winter Olympics in Pyeongchang, South Korea, which follow a Summer Olympics in Rio two years ago that disappointed in some ways. NBC ruled the airwaves during the Rio Games, besting other networks, and raked in $250 million in profit. But ratings for the prime-time broadcast declined compared to the London Olympics in 2012, so NBC had to give advertisers some extra ad slots to make up for it. This time around, NBC will sell ads for this Olympics based on total viewership, counting cable and digital viewers as well as those who tune into NBC proper. That gives them more leverage with advertisers, said Brian Wieser, an ad analyst for Pivotal Research Group. NBC expects to sell more than $900 million worth of ads for the Olympics, which it says would be the highest ever for a Winter Games. (Summer Games are more popular.) The company is offering more hours of programming this year, both on TV and online, than it did for the Sochi Games in 2014. Past Olympics have been criticized by fans for tape-delayed events. This year, NBC will air its nightly prime-time broadcast simultaneously across the country. That means the West Coast evening broadcast will start early, at 5 p.m.

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Senate confirms Jerome Powell as Fed chairman in 85-12 vote

Senators delivered a show of confidence in Jerome Powell, President Trump’s pick for chairman of the Federal Reserve System, voting overwhelmingly Tuesday to confirm him to the position. Mr. Powell, who’s been part of the Fed’s board of governors, will replace Janet Yellen, whom Mr. Trump declined to nominate for a second term. As chairman, Mr. Powell will be the most important voice in deciding how the Federal Reserve moves forward with the economy appearing to be humming yet again, even as banks chafe against restrictions imposed in the wake of the 2008 Wall Street collapse. Tuesday’s 85-12 vote saw just four Republicans and eight members of the Democratic Caucus vote against Mr. Powell, who had enjoyed bipartisan support before. “He has served as a steady voice and thoughtful leader,” Majority Leader Mitch McConnell said in urging his confirmation. The U.S. Chamber of Commerce called Mr. Powell the “right man at the right time.” The Federal Reserve is an independent government agency charged with keeping inflation in check and supporting job growth. It took on an outsized role in the Wall Street collapse, sparking criticism from some quarters that it had overstepped. More recently the Fed has raised some key interest rates, hoping to keep the economy growing without overheating. Mr. Trump had criticized Ms. Yellen’s performance during the presidential campaign, but in office he changed his tone, even calling her tenure “excellent.” But he did not give her a second term, making her the first chair in decades to be ousted after one four-year period. Her predecessor, Ben Bernanke, served for two terms, and before that Alan Greenspan served for nearly two decades.

Apple CEO: Trump Tax Plan ‘Will Result in Job Creation and a Faster Growing Economy’

Apple CEO Tim Cook said in a recent interview that President Trump’s tax plan would result in a faster-growing economy and greater job creation. In an interview with ABC News, Cook discussed a number of recent announcements by Apple, including their plan to invest $350 billion in the U.S. economy over the next five years and how President Trump’s tax plan will help the U.S. economy. Cook refused to “take a position” on how the new tax plan will affect individual Americans but commented on the corporate tax saying, “I do believe the corporate side will result in job creation and a faster growing economy.” Cook added that under Obama’s tax plan, the $38 billion tax payment the company plans to make as part of repatriating offshore cash would not have been paid. “I hope — I have that faith — that it will be used for great purpose for the country,” said Cook, “whether that’s infrastructure or education, or what have you, that will further supply jobs in the U.S.” Cook criticised the Obama-era tax plans saying that he “never thought” that the old tax system was “good for the United States.” Cook stated that he believed the harsh tax restrictions forced “people to invest elsewhere instead of within the country.” Cook also believes that a company like Apple could only have been founded in America and they have a responsibility to give back to the country, “one of the ways to do that is to create jobs,” said Cook. Cook also discussed the company’s decision to pay employees $2500 in stock grants, “We’re one of the few — we’re probably the only company of our size where every person is an owner in the company,” Cook said. “… Instead of a onetime kind of bonus, we wanted to do something that lasts a longer period of time.” Apple will reportedly be focusing on three areas in the future: direct employment by Apple, spending and investment with U.S. suppliers and manufacturers, and helping to grow the thriving app-store economy. “We believe deeply in the power of American ingenuity,” said Cook, “and we are focusing our investments in areas where we can have a direct impact on job creation and job preparedness. We have a deep sense of responsibility to give back to our country and the people who help make our success possible,” Cook said in a press release.

Major kudos to Tim Cook and Apple for this breathtaking investment in our economy.  Wow!!     🙂