Our snapshot of the day's top business news stories includes GogoPro's picture-perfect IPO, Japan's improving economy and Nike's winning fourth quarter earnings
Japan’s Economy Improving
Japanese economic officials Friday announced consumer prices in the country rose 3.4 percent in May, meeting analysts’ expectations and giving rise to the belief the economy is improving. Japan had been suffering from deflation risks and the rise in prices for 12 straight months indicates that problem is being dealt with. A rise in fresh food and utility prices are the drivers behind the rise in consumer prices. At the same time, Japan’s household spending dropped 8 percent in May, because the country raised its consumption tax to 8 percent from 5 percent in May and purchases dropped as a result. Japan’s jobless rate also dropped to its lowest level in more than 10 years.
Just Earn It: Nike Scores with Fourth-Quarter Earnings
Nike announced Thursday its fourth-quarter net income rose a better than expected 5 percent despite the company’s heavy investment in marketing for the World Cup soccer tournament, The Associated Press reports. The Beaverton, Oregon based athletic gear maker reported net income for the three months ended May 31 at $698 million. That compares with net income of $662 million in the same quarter last year. Revenue for the Nike brand rose 13 percent to $7 billion. Nike says orders for deliveries scheduled from June through November rose 11 percent compared with a year ago.
Smile! GogoPro Snaps Picture-Perfect IPO
Consumer electronics company GoPro went public Thursday and raised about $425 million. The deal values GoPro at nearly $3 billion. Shares are selling for more than $31 after they were initially offered at $24 per share. The company’s successful viral marketing campaign on behalf of its wearable cameras has raised the company’s visibility, analysts say. A video shot on the company’s HERO3 camera featuring images from around the world has generated 32 million views on YouTube in the past year. GoPro's HERO cameras represented a 45 percent share of the U.S. camcorder market by dollars in 2013, up from 11 percent two years earlier.
Airport Fees Scheduled to Take Off in July
Passenger security fees will be going up at U.S. airports on July 21, CNN reports. The fee, which helps fund airport security efforts by the Transportation Security Administration, comes courtesy of last December’s bipartisan budget deal. About three-fourths of revenue from the fee hike will be used to offset federal budget spending and not go toward improving security checks at the airport. The passenger security fee is presently $2.50 for each plane passengers take. However, the fee is capped at two plane rides each way, ensuring passengers won’t pay more than $5 en route to a destination, or $10 roundtrip, no matter how many planes they take. On July 21, however, a flat fee of $5.60 will be imposed in each direction, no matter how many planes you board en route, assuming you only have short layovers. As a result, you will pay more than double if you fly nonstop -- $11.20 roundtrip vs. $5 now. Those not flying nonstop will only pay $1.20 more roundtrip ($11.20 vs. $10 now), CNN figures.
Call Amazon For Takeout
Amazon is going to do battle with takeout food services like GrubHub and DeliveryHero by starting its own takeout food service. The new service will be performed through Amazon Local, the online retailer’s daily deals app. It will allow users to order food through the app and have it delivered to them. The service was launched on Tuesday in Seattle but was taken down. It is expected to go live again soon.
Alibaba to Open on NYSE
Alibaba Group, the Chinese e-commerce company, is going to put its initial public offering on the New York Stock Exchange. Alibaba plans to list its shares on the NYSE under the symbol BABA, but the size and target price of the IPO have not been announced yet. Alibaba is expected to price its shares sometime in August. The decision is seen as a defeat for Nasdaq, which had been vying for the Alibaba IPO, which is expected to challenge Visa as the largest U.S. IPO ever. The company also considered listing in Hong Kong. Alibaba announced net income of $3.71 billion on revenue of $8.45 billion for the year ending March 31.