Hedgefund News Wrap: Week Ending 10/16/15

Walmart Has Its Worst Day This Millennium  

(CNN Money) – The cliché, what goes up must come down, is ringing true for Wal-Mart Stores Inc. these days. After being pressured into increasing the wages of over 600,000 employees, the retail giant is claiming that the increase will eat up all of the profits and consequentially, they slashed the sales forecast for the year. This lead to shares plunging 10.04 percent to $60.03, their worst slump is 17 years.

With competition like Target and Amazon beating them out, Walmart has been forced to spend a substantial amount on increasing wages, improving it’s online sales, as well as adjusting delivery methods. Charles Holley, “Wally World’s” CFO, stated that the investments would lower operating profits by about $1.5 billion in fiscal 2017, which is essentially all of next year and January 2017.

Profits are expect to rise again, but not until Walmart catches up to their ever-evolving competition. With grocery prices barely beating out the competition, Walmart is no longer a sought after alternative for shoppers. Over 55 percent of sales come from its grocery business, but that number is expected to decrease if their business model remains stagnant.

Read the entire article at CNN Money
More coverage: New York Times and Wall Street Journal

Twitter Employees Tweeting About Twitter 

(Forbes) – There’s nothing quite like your own employees using your platform to express how they truly feel about your management practices, just ask Twitter. Even with a 140 character limit, employees have been spreading news about the recently announced layoffs that Twitter plans on making under the newly placed CEO, Jack Dorsey.


Take the picture to the left for example, it tells the entire story and adds to the pile of bad PR that is quickly growing. The “ex-Tweeps” quickly took to Twitter to share their stories and hashtag #TwitterLayoffs sent a frenzy in the tech world.

While the news is disheartening and jobs were lost, everyone from Facebook, to Reddit, to startups began Tweeting at the fired employees and job offers were flying everywhere. One stated “The 37 minutes before I found a new job were the darkest moments of my life,” clearly a dig at his ex-employer.

Read the entire article at Forbes
More coverage: Business Insider and CBS

Square Files for IPO

(Forbes) – You know that little white box that companies have been using to swipe your credit card when you’re checking out? It’s called Square, and it just filed for an IPO in hopes of raising $275 million.

Jack Dorsey, Square CEO and newly appointed Twitter CEO, founded the mobile payments and financial services startup not too long ago. As with most payment businesses, fraud has taken a toll on Square over the years. “In the three months ended March 31, 2015, we recorded a loss of approximately $5.7 million related to fraud by a single seller using our payment services,” the company said.

It plans to list on the New York Stock Exchange under ticker symbol “SQ,” with Goldman Sachs serving as the lead underwriter. Other banks included in the deal are J.P. Morgan and Morgan Stanley, not a bad group to get this company on the green side of things.

Read the entire article at Forbes
More coverage: CNBC and Fortune