FDX - Wall Street Breakfast Podcast: FedEx To Consolidate Operations

2023-04-06 07:15:02 ET

Listen on the go! Subscribe to Wall Street Breakfast on Apple Podcasts and Spotify FedEx ( FDX ) to consolidate operations amid cost-savings effort. Amazon ( AMZN ) eyes reduced stock awards for employees - report. Tesla ( TSLA ) nearly triples total workforce at Austin gigafactory. Learn more about these stocks with Seeking Alpha Premium .

*This is an abridged transcript of the podcast*

• FedEx announces changes to its structure. FedEx is consolidating in a cost-saving effort.

• Today is crypto Thursday so that means we’re hearing from our weekly contributor Mike Fay with BlockChain Reaction on Seeking Alpha. One of the topics he’s considering is bitcoin mining in March. SB.

• Amazon is looking into reducing stock awards for employees. Any official changes would not take place until fiscal year 2025.

OUR TOP STORY

FedEx announces long-term cost savings initiatives,

The company announced a consolidation of overall delivery operations ahead of its investor day event Wednesday.

According to the announcement, FedEx Express, FedEx Ground, FedEx Services, and other FedEx operating companies will be consolidated under one umbrella, Federal Express Corporation.

Meanwhile, FedEx Freight will provide less-than-truckload freight transportation services as a stand-alone company.

The transition to the new company structure is due to be fully implemented by June 2024.

According to the investors section of the FedEx website, the Board of Directors approved an increase in the annual dividend rate on its common stock of 10%, or $0.44 per share, to $5.04 per share for fiscal 2024. The Board declared a quarterly cash dividend of $1.26 per share of FedEx common stock. The dividend is payable July 3, 2023 to stockholders of record at the close of business on June 12, 2023.

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Bed Bath & Beyond closed down 4.75% on Wednesday despite announcing a $120M vendor consignment program.

The agreement between Bed Bath & Beyond and ReStore Capital, requires ReStore to purchase “up to $120M, on a revolving basis at any given time, of pre-arranged merchandise from the company's key suppliers to supplement inventory levels already sold at Bed Bath & Beyond ( BBBY ) and buybuy BABY.”

Premarket BBBY is up 4 percent.

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NOW MORE ON THE MARKET

U.S. stocks ended mixed on Wednesday

The Nasdaq ended 1.07% lower. The S&P 500 slipped 0.25% and the Dow eked out gains of 0.24%.

Of the 11 S&P sectors, Utilities rose by more than 2%. Health Care and Consumer Staples also ended higher. Of the losers, Consumer Discretionary, Industrials and Tech fell the most.

Treasury yields slipped as traders snapped up bonds. The 10-year yield was down 4 basis points to 3.30%, while the 2-year yield had slipped 4 basis points to 3.79%.

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Today is crypto Thursday and we’re hearing from our weekly contributor, Mike Fay. Mike Fay is behind the investing group BlockChain Reaction on Seeking Alpha.

Today he’s putting on bow on bitcoin mining in March and he’s looking ahead to ethereum price and staking withdrawals next week.

*audio from Mike Fay*

Mike referred to an article he wrote in January about ethereum. I’ll leave a link to that article in show notes. From there you can get to Mike’s Investing Group, BlockChain Reaction.

MORE OF OUR TOP STORIES

Tesla has increased its workforce at its Austin headquarters nearly three-fold year over year.

According to Bloomberg, an annual report provided to Travis County shows that the total workforce at the plant increased from 3,523 at the close of 2021 to 12,277 at the end of 2022.

CEO Elon Musk tweeted in late 2021 that the factory will eventually create “at least 20k direct & 100k indirect jobs”.

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Amazon is assessing plans to cut the number of stock awards for employees in coming years.

According to Insider , a leaked internal memo outlined the policy change, which blamed adverse economic conditions as the reason for the change. This could move compensation toward cash in order to make up for potential weak stock performance, offering managers flexibility on implementation.

The new compensation plan will be evaluated in Q1 2024 with an aim to make any official changes for the 2025 fiscal year.

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Tattooed Chef has received a letter from the Nasdaq informing the company that it was not in compliance with the Nasdaq Listing Rule.

The company can regain compliance with Nasdaq’s continued listing requirements at any time before May 30, 2023, by filing the Form 10-K with the SEC.

Back in November, Lucas Wolgram wrote an article entitled, Tattooed Chef three reasons to avoid this cash incinerator.

In the article they say there is a substantial risk of the company going out of business for good.

I’ll leave a link to the article in show notes.

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Pan American Silver has announced that it will transfer the listing of its common shares to the NYSE from the NASDAQ.

Pan American expects to begin trading on the NYSE on April 18, 2023, under its existing ticker symbol "PAAS".

Pan American's shares will continue to trade on the NASDAQ until market close on April 17, 2023.

Pan American’s listing on the Toronto Stock Exchange will not change.

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Walt Disney has changed heads at the top of its streaming organization, elevating its Hulu president to take over the group.

Joe Earley, chief of Hulu ( DIS ) ( CMCSA ), has taken over as president of direct-to-consumer for Disney Entertainment, replacing Michael Paull, who's leaving the company after six years.

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VCI Global, a Malaysian consulting group, has reportedly postponed its downsized $8M US initial public offering.

The company postponed the deal on Wednesday.

VCI Global had hoped to list its shares on Nasdaq under the symbol VCIG.

VCI offers technology and business consulting services, including IPO preparation, for businesses and government-linked agencies. The company's clients are based in Malaysia, China, Singapore and the US.

VCI downsized the proposed IPO from $15M to $8M in March.

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And finally the U.S. stock market will be closed in observance of the Good Friday holiday. However, the U.S. government doesn't recognize that day as an official federal holiday. This means that the jobs report will be released at 8:30 as usual.

Due to the stock market closure we will not have a regular edition of the Wall Street Breakfast podcast but we will have a special edition of the show. The focus will be the numbers from the jobs report.

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Now let’s take a look at the markets as of 6:20 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are mixed. The Dow is up a tiny fraction. The S&P 500 is down a small fraction and the Nasdaq is down 0.4%. Crude oil is flat at more than $80 a barrel. Bitcoin is down 2.2% at $27,884.

In the world markets, the FTSE 100 is up 0.6%. The Dax is up 0.5%.

On today’s economic calendar, at 10 am St. Louis Federal Reserve Bank President James Bullard will give a presentation on the U.S. economy and monetary policy before the Arkansas State Bank Department's Day with the Commissioner event. And at 1 pm the Baker Hughes rig count.

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