iRobot Left To Sweep Solo

AMAZON: Abandons Acquistion

Amazon has abandoned its planned acquisition of vacuum maker iRobot due to regulatory hurdles, with both companies acknowledging there was no feasible way to obtain approval. Additionally, iRobot announced a 31% workforce reduction, approximately 350 employees, and the immediate resignation of its chair and CEO, Colin Angle.

The deal's collapse followed reports that the European Union would not approve it, citing concerns about Amazon's market dominance. The European Commission had previously investigated the acquisition, fearing it might unfairly limit competition on Amazon's platform.

iRobot is now refocusing on increasing profit margins and scaling back on research and development, particularly halting projects unrelated to its core floorcare products. Following the failed deal, Amazon will pay iRobot a $94 million breakup fee. Initially valued at about $1.7 billion, the deal's termination has led to a decline in iRobot's market value, which now stands at under $400 million.

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OIL: The World Awaits

Oil prices stabilized as the world awaits the US response to an attack on American troops in Jordan, potentially escalating tensions in a key oil-producing region. Brent crude remained above $82 a barrel despite a recent drone assault due to Iran distancing itself from the incident. Saudi Aramco's halt in production capacity expansion had a limited short-term market impact but may have future implications. Saudi Arabia would like to have oil prices over $100 a barrel. OPEC+ has slowed their production cuts, which has put pressure on prices.

The White House is carefully responding to the attack, seeking to deter Iran without igniting conflict or spiking oil prices, a crucial balance for President Biden in an election year.

EARNINGS: General Motors

General Motors outperformed Wall Street's revenue and profit forecasts in the fourth quarter and expects a strong 2024 despite potential economic challenges. The company projects a 2024 net income of $9.8 to $11.2 billion and earnings per share of $8.50 to $9.50. GM's shares rose over 7% after this announcement.

For 2023, GM reported a 10% increase in revenue to $171.84 billion and included special costs like North American strike expenses and new agreements with LG. Despite a slight share decline this year, GM had previously seen a 7% rise, helped by a $10 billion share buyback program.

EARNINGS: 

• Earnings per share: $1.24 versus $1.16, estimated

• Revenue: $42.98 billion versus $38.67 billion, estimated

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The King Of Luxury

You might have heard of brands like Louis Vuitton, Dior, Hennessy, Dom, and Sephora, but the story behind them is wild.

Arnault is from Roubaix in northern France. He pursued an engineering degree at the esteemed École Polytechnique and then began his professional journey at his father's construction firm, Ferret-Savinel.

In 1984, Arnault took over a struggling company known as Agache-Willot-Boussac, which held ownership of esteemed brands such as the French department store Bon Marche and the fashion house Christian Dior, for around $15 million. He rebranded the company as Financiere Agache and instigated a revitalization effort that involved cost reduction and divestment of certain businesses and lay-offs of over 9,000 people. This garnered the nickname "the Terminator.” Within the first year, Dior reported earnings of $112 million.

During the late 1980s, he turned his attention to LVMH Moët Hennessy - Louis Vuitton, investing $2.6 billion to acquire a significant stake and assume the roles of its largest shareholder and chairman. In 1987, Louis Vuitton and Hennessy had a massive merger. The CEOs of each company clashed, so Arnault stepped in, removed them both, and named himself the new CEO of the newly merged LVMH. Today, the company is worth $438 billion, making “the Terminator” one of the wealthiest people in the world.

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