Good Thursday Morning and the tide rolls out.
Daylight – This morning red flags are flying all over Wall Street, Silicon Valley and Seattle. Federal regulators from SEC are in the books of Alibaba , the Chinese version of Amazon. It does not appear to be a one-off type of deal but a wide net as the SEC asked the company to provide “details of its accounting” for a delivery affiliate, it s operating data for the its largest online shopping day of the year and all “related party transactions in general”. This is a deep probe into the Alibaba company which also holds stakes in Lyft, ShopRunner and discount shopping website Jet.com.
Also, yesterday Walgreen’s WAG +0% came clean on blowing $50 million dollars on a partnership with Theranos, the crippled blood test technology company which proclaimed it could do dozens of lab tests with a single drop of blood. After one visit from founder Elizabeth Holmes, Walgreens agreed to locate blood test machines in all their stores. Ms. Holmes showed up with thick three ring binders of data to show their accuracy (my old college debate tactic to overwhelm the other side). Walgreens never vetted the technology.
Also, Microsoft MSFT +1.09% raised the surrender flag on its mobile phone hardware operations. It’s getting out of the business and laying off 1850 workers. Microsoft’s previous CEO Steve Balmer acquired Nokia’s headset business, forgetting he was a software company.
The good news for the day was that US Foods, a real company, went public and sold shares at the upper end of the targeted price range.The offering values the US chain at $5 billion. Nine years ago, buyout firms paid over $7 billion for the company, but they have paid themselves huge dividends over the years. With the IPO and dividends, they have doubled their money. WSJ