Newsletter: California Inc.: Bankrupt Weinstein Co. is finally reaching end of the line
Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.
I’m Business columnist David Lazarus, and here’s a rundown of upcoming stories this week and the highlights of last week.
Financial markets get back in gear Monday after Friday’s news that 164,000 net jobs were added to the economy last month, while the unemployment rate fell below 4% for the first time since 2000. However, the drop in the jobless rate was for a bad reason: The labor force shrank for the second month in a row.
LOOKING AHEAD
Weinstein sale: The long and winding road of Weinstein Co. hits another milestone Tuesday at a Delaware court hearing to determine if the bankrupt studio can sell its assets to a Dallas-based private-equity firm for $310 million, plus liabilities. Lantern Capital Partners was the only bidder to make a viable offer for Harvey Weinstein’s namesake company.
Mouse house: Walt Disney Co. will unveil its fiscal second quarter financial results Tuesday. Disney is the largest media company, and thus its results are watched closely by Wall Street. Analysts will be focused on ESPN revenue and subscriber counts because cord-cutting appears to have accelerated this year.
Pay TV: Satellite TV provider Dish Network also releases its quarterly results Tuesday. Investors will be curious to see whether the company suffered as many cancellations as AT&T’s DirecTV, Charter Communications and Comcast.
Inflation watch: The latest pulse reading on inflation comes out Thursday with the release of the Consumer Price Index for April. In March, the index rose to 2.4% from 2.2% in the prior month. Core inflation, excluding food and energy prices, rose to 2.1% from 1.8%.
THE AGENDA
Monday’s section notes that the rare trifecta of soaring share prices, cheap loans and low inflation is coming to an end. “Overall, the economy is still doing well today, and many economists don’t expect any major disruption this year. But the rise in consumer prices and interest rates — and the stagnating stock market — are seen by many as warning signs that this period of easy growth could be ending.”
STORY LINES
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Market slapdown: Elon Musk learned a hard lesson last week: Tweeting on Twitter with fanboys is one thing, dissing analysts on a conference call is another. The stock of Tesla took a hit after he insulted two analysts questioning him about Tesla’s problem-plagued Model 3 production. Musk issued a “sort of” apology the next day … on Twitter.
Not well: Wells Fargo & Co. agreed to pay $480 million to settle a class-action lawsuit accusing it of securities fraud related to the fake-accounts scandal that has rocked the company since 2016. The San Francisco bank denied the allegations but said it had “entered into the agreement in principle to avoid the cost and disruption of further litigation.” The bank was fined $1 billion last month for other consumer abuses.
Ugly picture: Snap Inc. saw its shares nosedive after it delivered its latest underwhelming earnings report. The Venice-based maker of Snapchat posted revenue and daily-active user numbers that fell below Wall Street estimates following a redesign of its picture-messaging app that has been widely panned.
Discrimination lawsuit: Albertsons was accused by the U.S. Equal Employment Opportunity Commission of violating the rights of Latino employees in San Diego-area stores by forbidding them to speak Spanish around non-Spanish speakers — even when they are conversing with one another during breaks or helping Spanish-speaking customers. The Idaho-based chain denied the allegations.
No wasteland: The L.A. Cultural Heritage Commission recommended that the City Council declare CBS’ Television City on Beverly Boulevard a historic and cultural monument. “All in the Family” and other classic series were filmed at the 25-acre lot in the heart of the desirable Fairfax district. CBS, which now mostly leases its soundstages, is considering selling the complex, considered a prime development site.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
High deductibles: An alarming report from the New York Times about women with breast cancer delaying treatment because of high insurance deductibles. “About half of all covered workers in the United States are now enrolled in plans with a deductible of at least $1,000, and many must pay several thousand dollars in medical bills before their plans even start to cover their care.”
Can do, can do: Bloomberg chats with a gambler named Bill Benter, who wrote an algorithm that couldn’t lose at the track. “Benter had achieved something without known precedent: a kind of horse-racing hedge fund, and a quantitative one at that, using probabilistic modeling to beat the market and deliver returns to investors.”
Jobs on the line: The Orange County Register says Southern California jobs could fall victim to President Trump’s trade war with China. “Although California’s large and diverse economy tends to insulate it from a trade war, it nonetheless counts 287,000 jobs in businesses targeted by Chinese tariffs — more than any other state.”
#MeToo: From the New Yorker, a profile of Lauren Bonner, the face of #MeToo on Wall Street. “Her lawsuit accuses executives at Point72 of paying her substantially less than several ‘lesser-qualified’ male peers, and of being generally reluctant to promote women at the firm.”
Ancient wisdom: As climate change poses a threat to contemporary society, the Atlantic looks at how a 9th century society withstood 60 years of drought. “Based on surviving Chinese and Uighur documents from the drought years, the study’s authors concluded that the Uighurs survived by diversifying their economy and using international diplomacy to boost trade.”
SPARE CHANGE
The Wall Street Journal has put together a fascinating slide show of how the National Rifle Assn’s marketing has changed over the years. In the 1950s, for example, the organization published a comic featuring a boy named Billy who injures his friend by accidentally firing a loaded gun he found in the attic.
For the latest money news, go to www.latimes.com/business. Mad props to Laurence Darmiento and Scott J. Wilson for helping put this thing together.
Until next time, I’ll see you in the Business section.
