April 2016

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Tesla shows the critical marriage of story and technology

Tesla unveiled its Model 3 sedan on March 31 to much fanfare. Over 325,000 customers pre-ordered the car, by making a $1,000 (refundable) deposit. An incredible feat, no doubt. But why Tesla? And why now? There have been other electric cars available at similar price points. The Nissan Leaf comes to mind. Chevy announced the
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Why would Comcast buy DreamWorks? Think theme parks

The Wall Street Journal reported on Wednesday that Comcast is in talks to buy DreamWorks Animation. Upon reading the news, I quickly realized I wasn’t familiar with all the groups that help make an animated feature film. So, for my own benefit (and maybe yours), let’s walk through this at a high level. The parts
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Do we spend too much energy trying to save dying companies

The Wall Street Journal ran an article on Sunday about department stores. Specifically, a research firm claims department stores need to close about a fifth of their US mall space to bring performance in line with 2006. The article notes the competitive pressures eating away at department stores: It’s super easy to find almost anything
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A great quote showing the human struggle with prediction

Yahoo! Finance ran an article on Saturday showing how stock analysts struggle to understand Warren Buffett’s company, Berkshire Hathaway. Here’s the quote that hit me like a freight train: Mr. Buffett is very good at investing but you never know what he’s going to buy next. I never would have thought he’d buy Precision Castparts
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The balance sheet value of NFL draft picks

  The NFL draft is next week in Chicago. Within the past week or so, we’ve seen huge two trades, involving the first and second overall picks in the draft. It turns out, understanding why teams trade up and down in the draft can help explain why companies buy and sell assets. Let’s start with
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Goldman Sachs and the danger of a "wait and see" business model

This week, Goldman Sachs reported its lowest first quarter revenue in the past ten years. How bad was it? It was an “un-Goldmanlike quarter with revenue pressures on just about every business,” Glenn Schorr, an analyst at Evercore ISI, wrote in a note. Bad. Pressures across the whole business. But at least it was in
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What could kill Coca-Cola?

Hadley Malcolm published an article yesterday for USA Today titled “5 ways Coke is battling fizzing soda sales”. I learned something interesting about Coke’s evolving strategy from the article: the company established its own venture capital firm for investing in beverages startups. Coke’s venture capital play Coke calls this element of their business Venturing & Emerging
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Why scientists and engineers should care about corporate finance

It has to do with incentives. I’ve dedicated STEM to Business to helping scientists and engineers build their business acumen. The more we, as STEM professionals, know about business, the better chance we have to earn promotions, change careers, or start our own companies. In the past couple of months, I’ve written extensively about corporate
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Bank of America's ridiculous "strategy"

Bank of America reported its 2016 Q1 earnings last week. Here’s a comment from their CFO, Paul Donofrio, about their performance: In a challenging and volatile environment, we stayed true to our strategy this quarter. We grew loans and deposits, increased core net interest income and improved an already strong and highly liquid balance sheet…
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Microsoft sues US government, shows the politics of innovation

Microsoft sued the U.S. Justice Department yesterday. The issue at play is whether the Justice Department can (a) force Microsoft to hand over data about its customers and (b) not tell the affected customers about it. Interesting, right? If you have your own data on Microsoft’s servers, there’s a chance the Justice Department is forcing
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