Amazon's New Cost-Cutting Plan
Plus, Tilray's newest acquisition.
Today is Tuesday, April 11, 2023.
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Amazon's New Cost-Cutting Plan
It appears that Amazon (Nasdaq: AMZN) is experimenting with a new way to lower expenses, and customers aren’t going to like it.
Details: According to a report from the technology news website The Information on Monday, Amazon is starting to charge fees for some returns at UPS (NYSE: UPS) Stores. It is now a $1 fee, according to the report. If customers choose another free return option that is an equal distance or closer to the UPS Store, then Amazon adds the fee.
Why: The report suggests that the e-commerce giant is doing this to deter customers from using UPS for returns. UPS can be expensive and Amazon is trying to cut down on costs. These fees are in addition to other charges for delivery driver pick up of returns.
Stock Price: Amazon is up 19% this year after the stock dropped in 2022.
Final Thoughts: Although this is bad for customers, it is refreshing for investors to see Amazon focus on cutting costs. In the past, the company has relied on layoffs to trim expenses. Now, it is turning to its customers. The news comes a week after another report said that Amazon has reduced stock awards for employees.
Notable Earnings Today: CarMax (NYSE: KMX), Organigram Holdings (Nasdaq: OGI), Albertsons (NYSE: ACI), Skillsoft (NYSE: SKIL), Uxin (Nasdaq: UXIN), Splash Beverage Group (NYSE American: SBEV).
Notable IPOs Today: Parabla Innovation ETF (Nasdaq: LZRD), Roundhill BIG Tech ETF (Nasdaq: BIGT).
Notable Equity Crowdfunding Campaigns Ending Today: Booking Ninjas (SMBX), Prime Lightworks (StartEngine), Parallel Flight Technologies (StartEngine), Uncle Waithley’s Beverage Company (StartEngine), Revolution Brands (StartEngine).
Notable Economic Events Today: WASDE Report (12:00 p.m. ET).
Tilray’s Acquisition Didn't Please Investors
Shares of Tilray (Nasdaq: TLRY) fell by 6.20% in after-hours trading on Monday after the cannabis company posted bad financial results and announced an acquisition.
Financials: Tilray reported a loss of $1.90 per share in the past quarter and revenue of $145.6 million; both were below estimates.
Also: Net revenue increased from $144.1 million in the prior year quarter, but investors were clearly expecting more.
Powering the Story: Tilray also announced that it was buying cannabis company HEXO (Nasdaq: HEXO) for $56 million. This implied a purchase price of $1.25 per share. Each HEXO investor will receive 0.4352 of Tilray stock for each outstanding HEXO stock. Investors liked the acquisition, with the stock jumping by 25%, but the stock basically lost most of those gains in after-hours trading.
Stock Price: Tilray’s stock is about even this year. Over the past 12 months, the stock is down over 50%.
Final Thoughts: Tilray hopes that HEXO can improve the company with operating efficiency and profitability. Cannabis was once seen as a growth area in stocks, but now a slowdown in deregulation is creating concern among investors.
Brookdale Senior Living’s Strong Guidance
Brookdale Senior Living (NYSE: BKD) posted better-than-expected preliminary financial results, causing the stock to jump by 8.72% in after-hours trading on Monday.
Final Thoughts: The company expects adjusted EBITDA to be “meaningfully above the previously issued guidance range.” It also expects total revenue to exceed previous expectations due to higher revenue per available room.
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Trends to Watch
The Dirty Dozen: Visa increases board to 12 as Pam Murphy elected (MarketWatch)
Consumers Aren’t Buying It: Apple’s Mac shipments fall more than 40%, worse than major rivals (CNBC)
Once in a Blue June: Bitcoin Approaches $30K, Reaching Highest Price Since June (CoinDesk)
Surge: A Little-Known Stablecoin Gets Big Help From World’s Largest Crypto Exchange (The Wall Street Journal)
Sweet: Newmont sweetens bid for Australia's Newcrest to $19.5 bln (Reuters)
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