Friday Briefing-May 27, 2016: Takata Cannot Afford the Recall Cost

May 27, 2016


It’s the last day of the week, and Takata hasn’t seen the last of its problem yet. The airbag recalls have proven to be too expensive for the company to afford. Its compatriot Takeda Pharma doesn’t exactly have a good day either when Valeant rejected its takeover offer. Read on to find the top stories on Sentifi.


1/ Takata Corporation: Faces a cash issue related to airbag recall [482% increase in voices in the last 24h]

The airbag recalls have proven to be too expensive for Takata.

The cost for the company’s faulty airbag recalls just keeps piling up. As of now, it has issued a recall for more than 100 million inflators, which is expected to cost above $20 billion. And the company only has $530 million in cash and short-term investments, forcing it to seek finance advices. The company has chosen Lazard to be its savior, and tasked the advisory firm to engineer a restructuring of its finances. It also seeks help from its biggest customers.


2/ Takeda Pharma: Rejected by Valeant Pharma [467% increase in voices in the last 24h]

Takeda, joined by TPG Capital Management, made a takeover bid for Valeant Pharma this spring, but the Canadian company turned it down. Takeda has made two acquisitions prior to making the offer to Valeant, costing the company $21 billion.

3/ Abercrombie & Fitch: Shares tumble on disappointing first-quarter earnings [445% increase in voices in the last 24h]

Sales fell 4%, same-store sales also dropped 4%, and total revenue slumped 3.3% are some of the talking points in the company’s first-quarter earnings. The company has been using the same excuse to explain for falling profits, which is it is failing to stay relevant with its tween and young-adult consumer market.

4/ Electra PE: Ends outsourcing contract with Electra Partners, appoints new interim CEO [421% increase in voices in the last 24h]

The company announced the termination of its agreement with Electra Partners, calling it a strategic move to flexibly put in place any potential changes to the operations and the investments of the company. Also part of the move, Edward Bramson of Sherborne Investors got appointed to the interim CEO position. The company is also searching for candidates for the CFO.

5/ Dollar Tree: Shares reach new 52-week high [387% increase in voices in the last 24h]

Quarterly revenue grew 133.6% to $5.09 billion, the company reported today, shooting the shares up 12.5% to a new 52-week high. $2.7 billion of that revenue was from Family Dollar which the company acquired last year. Earnings forecast issued by the company is also very positive, as it expects the current quarter revenue to be from $5.03 billion to $5.12 billion.

6/ Pure Storage: First-quarter results drag down shares [372% increase in voices in the last 24h]

The company reported an 89% increase in sales to $133.9 million, but unfortunately, a net loss of $63.5 million dragged down the sentiments among the investors and caused the shares to fall 18%. Nevertheless, the CEO was optimistic about the company’s prospects, assuring investors they will reach sustained positive cashflow by the second half of calendar year 2017.

7/ Brent Crude Oil: Prices go above $50 [370% increase in voices in the last 24h]

Brent crude goes past $50 for the first time in month. But is it a real recovery?

The commodity surpasses $50 price tag for the first time since November, but it is not enough to signal a recovery or a positivity, according to Japanese Prime Minister Shinzo Abe. During the G7 meeting, Abe showed a pattern in the global commodity prices, a downward pattern to be exact. The prices had gone down 55% between June 2014 and January 2016, and that could be a red flag for the next global financial crisis.



8/ Snapchat: Raises $1.8 billion [356% increase in voices in the last 24h]

The messaging app startup just raised more money in its latest Series F round, $1.8 billion to be exact. Only recently that the company started its monetization efforts, which helped the company reach $59 million in revenue in 2015. The company is now thought to have a valuation of $22.7 billion with this latest funding round, but that doesn’t mean investors are happy with the company as there have been speculations that the growth of the company is stalling this year.

9/ Toyota Motor Corp: Foresees a production fall in South Africa, forecasts Q1 2017 earnings [323% increase in voices in the last 24h]

The company’s South African branch said the production at its Durban plant drop from 138,000 units to 122,000 units as the production for newer models will be completed in the middle of the year. Exports will also fall from 60,000 units to 52,000 units.

10/ NetApp: Posts quarterly earnings, signs new licensing agreement [303% increase in voices in the last 24h]

NetApp saw a 3.3% drop in its share price after posting lower-than-expected, fourth-quarter earnings. The company earned $1.38 billion in revenue, whereas the analysts expected $1.40 billion. Analysts remain skeptical about near-future positive movement of the company, but they do stay hopeful about company’s health in the long run.

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