Could Apple have a wage war on its hands? The iPhone maker could face some problems as voices swirl over a big bonus to CEO Tim Cook compared to worker wages.
TheStreet's Luc Olinga writes "Apple (AAPL) is used to laurels. Most often we praise its sense of innovation. And when we're not bragging about the new features of the new iPhone, we're ecstatic about the breakthrough of the Apple Watch. And often when there's a crack in that armor at nearly $2.73 trillion in market capitalization, it doesn't last long."
But this problem may have some legs. As Olinga notes, employees at least two Apple retail stores are backed by major national unions and are preparing to file paperwork with the National Labor Relations Board. Spurred by wages that have stagnated below the rate of inflation, and encouraged by successful efforts by Starbucks SBUX employees to form unions, Apple retail workers say they hope they can push the world's most valuable company to share more of its record-setting profits with the workers who sell, repair and troubleshoot the products it sells.
Meanwhile, an influential shareholder advisory group is urging investors to vote against Apple CEO Tim Cook's $99 million pay and bonus package.
Institutional Shareholder Services, the FT reports, has urged its clients to vote down the generous package that Cook received for his compensation in 2021. In a client letter reported by the Financial Times, the advisory group said that there is "a significant concern" over the $82 million in stock awards that Cook received as part of his compensation. The package also included a $3 million salary, a $12 million cash bonus and just under $1.5 million in personal security and private jet costs, for a grand total of $98.7 million.
The more-than-generous compensation reflects not only Apple's size and success (shares rose by 31.88% in the last year) but also Cook's 10-year anniversary at the helm of the company after taking over following Steve Jobs' death. While not commenting on this specific ISS recommendation, Apple has previously named Cook's leadership as what helped it briefly reach a market cap of $3 trillion in January and become the first company in the U.S. to do so.
Now, check out how Cook's paycheck compares with that of the CEOs of Microsoft (MSFT) and Amazon (AMZN).
TheStreet Quant Ratings rates Apple as a Buy with a rating score of A.
In Crypto We (Don't) Trust
When the notorious cryptocurrency exchange Crypto.com, of which NBA superstar Lebron James has become the face, discovered on Jan. 17 that it had been hacked, the alert did not come from its monitoring tools.
The firm, an inside source told TheStreet, was made aware of the intrusion into its system by actor, investor and crypto enthusiast Ben Baller.
In a since-deleted tweet, Baller said his account had been compromised and that he had lost nearly $14,000 worth of ethereum, the second most popular digital currency. He also claimed that he had enabled two-factor authentication. In a word, the error did not come from him.
Three days after the hack, the Singapore-based company admitted in a blog post that more than $35 million worth of cryptocurrencies had been stolen by the hackers. Yet on its website, Crypto.com trumpets that: "Security First. Always."
The firm declined to comment for TheStreet's report.
Crypto.com's setbacks reflect the astonishment of a young industry that thought itself immune to cybersecurity problems because of its founding principles: open source, transparency, decentralization.
Hacks of crypto firms have exploded since January, which raises questions about the security of blockchain and web3 technologies. Read more in In Code We (Lose) Trust: How Security Became the Achilles' Heel of Crypto.
Here's a breakdown list of the technology and FAANG/MAMAA stocks to watch right now based on their performance over the past week:
Intel (INTC) shares fell about 5% last week after the biggest U.S. chipmaker told investors to expect muted profit margins as it accelerates spending on new foundries and technologies to meet future demand, while extending the timeline on its new strategy roadmap.
Intel, which unveiled a $5.4 billion takeover bid for Tower Semiconductor (TSEM) earlier this week, told an investor conference that gross margins would fall by 6 percentage points this year, to 52%, before slowly improving by 2026 -- a year behind its prior forecast -- when revenues from its new investments will start to accelerate.
Intel is also planning to invest $20 billion into two chipmaking plants in Ohio - following on from similar investments in Arizona last March -- that it hopes have have up-and-running within three years as it expands domestic production.
Nvidia Dips on Earnings, Rally From Here?
It was not the reaction the bulls were hoping for after graphics-chip major Nvidia (NVDA) reported earnings. Even as the company beat consensus expectations, Nvidia stock dropped about 3.5% in regular trade Friday.
The Santa Clara, Calif., company's guidance left a bit of concern and is responsible for today’s dip. That said, its revenue outlook was still well ahead of analysts’ expectations and investors are understandably frustrated by the stock dip.
Nvidia is the champ, says TheStreet's Bret Kenwell, and "it’s my opinion that bulls were looking for a reaction much like we saw with Advanced Micro Devices (AMD), even though the latter faded from its initial post-earnings pop.
A New Face And Voice for Facebook?
Did the controversies surrounding Facebook parent Meta (FB) get the better of Mark Zuckerberg? The chief executive with the look of an eternal teenager at one time had given the impression he luxuriated in media exposure.
But to many people's surprise, Zuckerberg said last week he and his No. 2 executive, Sheryl Sandberg, were going to step back a bit. He will focus on products and new technologies, in particular the metaverse, of which he has been singing the praises since last October. Chief Operating Officer Sandberg will focus on "the success of our business," Zuckerberg said.
Nick Clegg, the former British deputy prime minister, now becomes the voice of Meta as president for global affairs. Clegg joined Facebook in October 2018 as vice president of global affairs and communications after almost two decades in British and European public life, according to his LinkedIn page.
"I want to share an update on our company leadership as we begin our next chapter to help build the metaverse," Zuckerberg wrote on Facebook on Wednesday. "The landscape around regulation for our industry is changing quickly. We need a senior leader at the level of myself (for our products) and Sheryl (for our business) who can lead and represent us for all of our policy issues globally."
Clegg will report directly to Zuckerberg and Sandberg, the CEO added.
After a weaker-than-expected fourth-quarter-earnings report, morale at headquarters in Menlo Park, Calif., may be hurting; Bloomberg reports that the company is discussing ways to to retain staff. Meta's market capitalization has slumped. It stood at nearly $590 billion, a far cry from the $1 trillion threshold it hit in June of last year.
Shares of Meta Platforms fell 6% last week.
TheStreet Quant Ratings rates Meta Platforms (formerly Facebook) as a Buy with a rating score of B+.
Amazon is Worth $1 Trillion More
Hedge fund heavyweight Daniel Loeb, CEO of Third Point, is bullish on Amazon (AMZN), TheStreet's Dan Weil reports.
Loeb said in a private call with investors Wednesday that the market undervalues the technology/online retail titan by about $1 trillion, knowledgeable sources told The Wall Street Journal. Amazon currently has a market capitalization of $1.6 trillion.
Amazon Web Services, the company’s cloud computing business, has an enterprise value over $1.5 trillion, according to a slide shared on the call, The Journal sources said. And the slide showed that Amazon’s retail side may be worth $1 trillion.
Putting the numbers together could give a market cap of about $2.5 trillion. That would put Amazon’s share price at about $4,942. Amazon stock closed at $3,052.03 on Friday and were down about 0.41% for the week.
TheStreet Quant Ratings rates Amazon as a Buy with a rating score of B-.
Is Google Search Slowly Dying?
Google may be well-known as a verb, but critics have been rapping the company, challenging the quality and accuracy of its searches.
A recent blog post by search-engine blogger DKB titled "Google Search is Dying" asserts that Reddit, a social news aggregation, web content rating, and discussion website, is currently the most popular search engine.
The post declares "Google is dead. Long live Google + 'site:reddit.com'."
In addition to Reddit, some of Google's other competitors include Microsoft's (MSFT) Bing, Yahoo and the Chinese search engine Baidu (BIDU).
Wood: Tech Weakness Creates Buying Opportunities
Star investor Cathie Wood, CEO of Ark Investment Management, keeps on catching the falling knives.
She has insisted in recent weeks that the fall of young technology stocks has simply created buying opportunities. And Ark has been buying aplenty.
On Friday, its exchange-traded funds picked up shares of streaming platform Roku (ROKU), video meetings platform Zoom Video Communications (ZM), digital entertainment/e-commerce company Sea Ltd. (SE) and online video game platform Roblox (RBLX), among other companies.
Ark purchased 694,584 shares or Roku, worth $78.1 million as of Friday’s close; 82,488 shares of Zoom, worth $10.5 million; 40,384 shares of Sea, worth $5.2 million; and 65,057 shares of Roblox worth $3.2 million. Roku is the No. 3 holding in Wood's flagship Ark Innovation ETF (ARKK), and Zoom is No. 4.
