Why Alibaba Stock Is Tanking

Alibaba stock plunged nearly 10 percent after the Chinese e-commerce giant reported sales that disappointed Wall Street and dealt with a regulatory spat in its home country.

Alibaba, which made history last September with the largest initial public offering ever, on Thursday reported results for its fiscal third quarter, which ended Dec. 31. The company racked up sales of $4.2 billion, up 40 percent from the same period a year earlier. But the results disappointed analysts polled by Thomson Reuters, who expected sales of $4.45 billion.

Alibaba's stock price dropped nearly 10 percent on Thursday morning.

Investors also reacted to a Chinese regulatory probe, disclosed in a white paper posted on the website of China's State Administration for Industry and Commerce on Wednesday. The paper said the agency was investigating Alibaba for failing to crack down on counterfeit goods sold on its Taobao online marketplace.

In a statement on its website, the SAIC said it discussed the paper with the company last July, but kept the meeting a secret, in “order not to impede Alibaba’s preparations for its initial public offering.”

Alibaba denied knowledge of the paper on Wednesday, amid accusations from bankers that the company misled investors by hiding the information.

"The first time we saw the white paper was when it was posted on the SAIC web site yesterday," Joe Tsai, Alibaba Group's executive vice chairman, said in a statement on Thursday. "I want to make it absolutely clear that Alibaba has never requested the SAIC to delay the publication of any report."

Paperwork the company filed in the U.S. before its IPO acknowledged investigations by the Chinese government and others into alleged trademark infringement, particularly by third-party sellers who use Taobao. But it did not specifically mention the SAIC report.

Alibaba's stock has been volatile since it went public at $68 a share. It jumped more than 40 percent on its first day of trading. But it has been tumbling from a peak of about $119 in November.

Chipotle Adds Another Pizzeria To Its Empire

Chipotle is expanding its new pizzeria chain eastward, a sign that the fast-food giant has national ambitions for pizza.

The company said Thursday that it plans to open a Pizzeria Locale in Kansas City, Missouri, later this year. This will be Chipotle's first pizza eatery outside Colorado, where it already operates two Pizzeria Locales.

“If this was just a side project, they’d do a couple more of these in Colorado,” Aaron Allen, founder of restaurant consultancy Aaron Allen & Associates, told The Huffington Post. “We expect to see a whole lot more opening in a short period of time.”

The announcement of the Kansas City parlor comes just months after Chipotle opened its second Pizzeria Locale in its home base of Denver. Chris Arnold, a spokesman for Chipotle, told HuffPost it was “too soon to know” when the new restaurant would begin serving customers. He said there are no currently plans to expand to other cities.

Chipotle makes its pizzas pretty much the same way it makes burritos. Customers select fresh ingredients and toppings from a buffet, and line chefs slide the doughy pizzas into a specially designed oven built to cook them in just two minutes. Diners then seat themselves.

Fast-casual restaurants such as Chipotle and Panera have trounced traditional fast-food giants in recent years, attracting customers willing to pay a little more for simple, streamlined menus, customizable meals and higher-quality ingredients. Restaurants mimicking the format have proliferated over the last few years, applying it to cuisines ranging from Pakistani to sushi.

Chipotle's stock (blue) has skyrocketed as fast-food rivals such as Yum! Brands (indigo), Wendy's (green), Burger King (yellow) and McDonald's (red) stagnate.

Even Chipotle -- the juggernaut of the fast-casual category -- has opened its own copycats. Besides Pizzeria Locale, the company operates 10 Southeast Asian-style eateries, called ShopHouse, in the Los Angeles and Washington, D.C., areas.

“Both Pizzeria Locale and ShopHouse are on faster growth trajectories right now than Chipotle was in the beginning,” Arnold told the HuffPost.

U.S. pizza sales topped $37 billion in 2013, according to an annual report by PMQ Pizza Magazine. And 34 percent of diners polled in 2012 by the research firm Technomic said they would pay more for gourmet ingredients, up from 26 percent in 2010.

“Pizza is far more popular than even Mexican,” Allen said. “This can be an absolute goldmine.”

Fast-food behemoths have taken note of Chipotle's success. McDonald’s, whose chief executive announced this week he will step down amid anemic sales, is slimming down its menu in hopes of making it more simple. Yum! Brands -- the parent company of Taco Bell, KFC and Pizza Hut -- opened Banh Shop, a Vietnamese street-food chain in Dallas in September. To more directly take on Chipotle, the company also launched U.S. Taco Co., an upscale taqueria, in Huntington Beach, California, in August.

This Map Reveals Just How Unequal The So-Called Recovery Is

In his State of the Union address last week, President Barack Obama cheered rising wages. What he didn't mention is that much of the income gained since the recession has gone into the pockets of the richest Americans.

In 39 U.S. states, the top 1 percent of earners gobbled up at least half of all of the income gains between 2009 and 2012. And in 17 of those states, the top earners got every bit of the income growth in those years. That's according to a new paper released Monday by the Economic Policy Institute, a think tank focused on labor issues.

In all states, the rebound in income in the three years after the recession pretty much all went to the richest of the rich, the EPI found.

"Over this period, the average income of the bottom 99 percent in the United States actually fell (by 0.4 percent)," the paper states. "In contrast, the average income of the top 1 percent climbed 36.8 percent."

The EPI paper, using state-level tax data from the IRS, builds on older research by economists Thomas Piketty and Emmanuel Saez, who analyzed income gains captured by the top 1 percent to illustrate broader trends in economic inequality. The French economist Piketty got famous last year for his book, Capital In The Twenty-First Century, which warned that inequality was only going to get worse without government intervention.

The map below shows where the richest 1 percent captured the greatest percentage of the overall income gained between 2009 and 2012. The darker orange and red shades show where the largest share of income growth went to the 1 percent.

Among the states where the 1 percent got the biggest share of the income gains were Delaware -- where they got 301 percent of income growth -- and Florida, where they got about 260 percent.

Nevada was arguably one of the most-unequal states in the country during that stretch: The income of the top 1 percent jumped nearly 40 percent, while the income of the rest fell 16 percent. But because total state income fell -- the only state in which this happened -- it doesn't register on the map, which measures the 1 percent's share of income gains.

West Virginia was the least-unequal state in the country during that stretch: It's the only state in which the 1 percent suffered falling income while the 99 percent enjoyed rising income.

Since the recession ended more than five years ago, wages have been one of the slowest parts of the economy to recover. In his speech last week, Obama applauded the 11 million new private-sector jobs created since 2009 and claimed that "Wages are finally starting to rise again."

But wage growth is still a lot slower than it was before the recession. And it's still too slow to keep up with the growth enjoyed by the 1 percent, who typically don't have to beg employers for raises.

Infographic by Alissa Scheller

Ending Greece's Nightmare

Alexis Tsipras, leader of the left-wing Syriza coalition, is about to become prime minister of Greece. He will be the first European leader elected on an explicit promise to challenge the austerity policies that have prevailed since 2010. And there will, of course, be many people warning him to abandon that promise, to behave “responsibly.”

Read the whole story at New York Times

JPMorgan's Dimon Gets Cash Bonus, Total Pay Unchanged

Jan 22 (Reuters) - JPMorgan Chase & Co paid Chief Executive Jamie Dimon a first cash bonus in three years, part of a total 2014 pay package of $20 million that was unchanged from the year before.

Dimon received a $7.4 million cash incentive bonus, JPMorgan said in a regulatory filing, atop a base salary of $1.5 million and $11.1 million in restricted stock. His 2013 package comprised the same base salary plus $18.5 million in restricted stock. (http://bit.ly/1E7BcMe)

JPMorgan did not explain its compensation decision. The board is expected to provide an explanation in a proxy statement to be filed ahead of the company's annual meeting in May.

The bank's 2014 net income rose 21.4 percent to $21.76 billion. Total net revenue, however, fell about 2.5 percent to $94.21 billion.

JPMorgan is the biggest U.S. bank, with $2.6 trillion in assets. Dimon, 58, is the most outspoken of big bank CEOs and has recently bristled at public criticism that JPMorgan is too big and complex to manage safely and efficiently.

On a call after JPMorgan reported results last week, the chief executive - who was treated for throat cancer last year - said banks were "under assault" from regulators.

In 2012, Dimon's pay was halved to $11.5 million after JPMorgan traders handling company accounts lost $6.25 billion in the so-called "London Whale" derivatives transactions.

Dimon was paid $23 million in 2011 and the same amount in 2010.

In the filing on Thursday, JPMorgan said the base salaries of other operating committee members were unchanged at $750,000, except Daniel Pinto, the London-based chief of corporate and investment banking.

The terms and composition of Pinto's compensation reflect applicable UK legal standards, which require at least half of incentive compensation to be paid in equity with the remainder paid in cash, according the latest proxy statement by the bank.

Chief Financial Officer Marianne Lake and asset management chief Mary Erdoes received an increase in total compensation. Pay was unchanged for other operating committee members.

Bonuses for Dimon and all operating committee members, except Pinto, comprised 60 percent restricted stock and 40 percent cash.

The median American household income for 2013 was $51,939, according to a report from the Census Bureau in September. (Editing by Savio D'Souza and Robin Paxton)

SkyMall Is Dead. Internet Lists Of Its Crazy Tchochtkes Will Live Forever.

SkyMall, a company known mainly for trying to sell you things no one needs while you sat on an airplane, filed for bankruptcy on Thursday.

The company didn't sell much from the catalog in recent years. Instead it sold a good chunk of its products online. But it still relied on people looking at the catalog on the plane to drum up interest in its website. And, with in-flight wifi, that was happening less and less.

SkyMall built a business on boredom, and people are less bored on planes than they used to be.

The Internet was instantly nostalgic about the imminent disappearance of the SkyMall catalog and responded by listing things you could have bought from SkyMall -- but hopefully never did.

All of these lists published Friday morning.

1. 11 Of The Most Ridiculous Items Sold By SkyMall (Business Insider)

2. We found the most insane item on SkyMall (Fusion)

3. 28 Essential Things You’ll Never Be Able To Buy From SkyMall Again (BuzzFeed)

4. In memoriam of SkyMall products: A lost national treasure (Mashable)

5. 18 Fantastic Products from SkyMall, America's Final Great Bastion of Innovation (Yahoo)

6. 5 things journalists actually could have used from SkyMall (Poynter)

7. As SkyMall files for bankruptcy, the Internet memorializes its crazy products (Daily Dot)

8. Here Are 12 of SkyMall’s Weirdest Products (Time)

9. THE BEST (=WORST) OF SKYMALL (Thrillist)

10. Our 6 Favorite Health and Beauty Products From SkyMall (Health)

11. 22 ICONIC SkyMall Products to Buy Before It's Too Late (Cosmopolitan)

And of course, The Huffington Post has been doing this for years, here, here, and here.

Last year Wired went out a limb and predicted what SkyMall will look like in the year 2040.

Now we'll never know if they were right.

McDonald's May Cut More Menu Items

The McDonald’s menu could be getting even smaller.

Mike Andres, McDonald’s U.S. CEO, hinted on a conference call with analysts Friday that the chain may cut more menu items.

“This menu rationalization process is clearly ongoing,” Andres said. “As we look forward, we’ve added quite a number of products over the last 18 months or so, so we’re rationalizing that.”

Andres was responding to a question from an analyst about whether the chain would be willing to keep cutting the menu if the recent decision to slash eight items proved successful. As part of the test, McDonald's went from four quarter pounders with cheese to one, three premium chicken sandwiches to one and three snack wraps to one.

CNBC reported Friday that according to more than one franchisee, the Bacon Habanero Ranch Quarter Pounder, Bacon and Cheese Quarter Pounder, Premium Chicken Club Sandwich and Premium Ranch BLT Chicken Sandwich will be nixed.

So far, the company's menu changes have led to improved sales and better throughput -- a measure of how many orders are processed in a given period of time -- in test markets, Andres said on the call.

McDonald’s could use the help. The chain’s profits plunged 21 percent from the same quarter a year ago, according to the fourth-quarter earnings report released Friday. The past few months also marked the fifth quarter in a row that McDonald’s reported a drop in sales at U.S. stores open at least a year, an important metric of a restaurant's health.

Analysts, the media, franchisees and even McDonald’s executives have blamed the chain’s bloated menu for its poor performance in recent months. The menu -- which had just nine items in the 1950s -- ballooned to more than 100 items over the past several years, ranging from things like Egg McMuffins to a few McWrap varieties to smoothies.

The complicated menu has made it harder for McDonald’s to deliver what it’s known for: cheap and quick food. It also comes at a time when Americans are turning increasingly to chains like Chipotle and Five Guys, which have a handful of menu items but offer diners the ability to customize their orders.

McDonald’s is rolling out its own customizable options for burgers, called Create Your Taste, at 2,000 locations nationwide. Diners can pick from fancy toppings like creamy garlic sauce, guacamole and pepper jack cheese. Andres hinted on the call that the program could make it easier for the fast food giant to cut even more from its menu.

“That offers unlimited variety to our guests, they can now choose whatever they want, so it takes some of the pressure off a lot of the other menu items,” he said.