Billionaire buys $201 million life insurance policy

NEW YORK (CNNMoney)

Guinness World Records, which announced the policy, said it is the largest ever issued.

Neither the record keeper nor the issuer would say who is covered by the massive policy.

Dovi Frances, the adviser who arranged the policy, would only say it went to a well-known technology billionaire from California.

Related: How to choose a life insurance policy

The wealthiest of the wealthy buy life insurance for several reasons.

Primary among them are tax purposes, Frances explained.

A wealthy estate is hit with a hefty tax bill, and there may not be enough cash to cover it, since many millionaires and billionaires hold their wealth in investments, he said.

Related: The ultimate guide to retirement

The $201 million policy is more complicated than most. It's underwritten by 19 different insurance companies, each with a slice of less than $20 million, he said. If a single lender took the whole policy, Frances said, "they would go into bankruptcy if the insurance policy is called."

And a big plan comes with a big cost. Frances said the price is "in the low single-digit millions."

First Published: March 16, 2014: 5:21 PM ET

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Guinness pulls out of St. Patrick's Day parade

Revelers watch the St. Patrick's Day parade last year.

NEW YORK (CNNMoney)

The beer maker late Sunday announced its decision to drop its sponsorship of Monday's parade in New York City.

Over the weekend, gay rights icon Stonewall Inn had threatened to stop selling Guinness beer if the company continued to sponsor the parade. And LGBT advocacy group GLAAD had planned an anti-Guinness event on Monday.

"We were hopeful that the policy of exclusion would be reversed for this year's parade," Guinness said in a statement. "As this has not come to pass, Guinness has withdrawn its participation."

Parade organizers could not be reached for comment.

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The announcement by Guinness comes days after rival Heineken (HEINY) also pulled out of the New York City parade, and Sam Adams (SAM) announced that it would no longer sponsor the Boston parade for the same reason.

Both parades have policies under which sexual orientation is not allowed to be displayed, meaning marchers are not able to hold signs or wear shirts identifying themselves as LGBT (lesbian, gay, bisexual or transgender).

"Today, Guinness sent a strong message to its customers and employees; discrimination should never be celebrated," GLAAD president Sarah Kate Ellis said in a statement.

The speaker of the New York City Council also congratulated the three beer companies on their decisions.

"I want to commend Guinness, Sam Adams and Heineken for taking a stand on behalf of the LGBT community who should be able to march openly and proudly in the St. Patrick's Day Parade," Speaker Melissa Mark-Viverito said in a statement.

--CNN's Elizabeth Landers contributed to this report.

First Published: March 16, 2014: 9:03 PM ET

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Alibaba snub puts Hong Kong exchange on the defensive

Alibaba founder Jack Ma has decided to list his company in the U.S. after negotiations failed with Hong Kong.

HONG KONG (CNNMoney)

Hong Kong clocked three consecutive years as the global IPO leader between 2009 and 2011, attracting major companies such as Prada, Glencore and Samsonite to the city's exchange.

But in recent years, mega IPOs have been few and far between due to a sluggish global economic recovery and slowing growth in mainland China.

Landing Alibaba would have been a move in the right direction, but the Hong Kong exchange refused to allow the e-commerce giant to list with a corporate structure that would give management unprecedented powers.

Related story: China's Alibaba picks U.S. for IPO

Alibaba's partners, including founder Jack Ma, were worried about losing control of the company and had lobbied furiously for a rule change. To maintain their grip, Alibaba's partners wanted the right to appoint board members.

When the Hong Kong Stock Exchange refused, Alibaba decided to take its business to a U.S. exchange, where the company's management structure will be accepted.

Hong Kong has now lost its chance at hosting what's expected to be one of the world's largest market debuts, and sentiment remains divided over whether a rule change is necessary.

Some say greater flexibility is needed to attract firms to Hong Kong, while others say the rules must remain in place to protect the interests of investors and shareholders.

Whether Hong Kong decides to make substantial changes remains to be seen, but there are indications the city could be considering amendments to its listing regulations.

Related story: Turning Alibaba away has risks for Hong Kong

Hong Kong needs "to find ways to make our market more responsive and competitive, particularly with respect to new economy or technology companies," Hong Kong Stock Exchange CEO Charles Li said in a statement.

"We have to consider possible changes where they might be necessary...to ensure our markets continue to be relevant in the new era of economic development," he said.

Li has previously voiced support for a debate around alternative governance structures similar to what Alibaba proposed -- something he suggested might be needed to attract tech firms.

But other experts say it remains unlikely that Hong Kong regulators will revise rules anytime soon.

Related story: Meet Alibaba, Yahoo's Chinese secret weapon

"The reason you would have changed them is for commercial reasons -- to get one of the world's biggest IPOs in history, and now that's slipped between their fingers," said Mizuho analyst Jim Antos. "I think they missed an opportunity, and it doesn't show the greatest business judgment in the world."

Alibaba is estimated to raise $15 billion -- that's just shy of Facebook (FB, Fortune 500), whose $16 billion 2012 market debut was the third-largest IPO ever.

First Published: March 17, 2014: 1:41 AM ET

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Weibo: China's Twitter files to go public

Weibo, a Chinese microblogging site, filed for an IPO in the U.S. on Friday.

NEW YORK (CNNMoney)

The Beijing-based social media company intends to list on the New York Stock Exchange and is looking to raise $500 million.

Weibo, owned by Sina Corp. (SINA), was profitable for the first time in the last three months of 2013, raking in $3 million. The results were boosted by a 163% surge in ad revenues to $56 million.

Most of the company's revenue comes from ads since it does not charge users, except for VIP memberships.

Weibo has been growing -- active daily users numbered 61.4 million at the end of December, up from 58.9 million in September.

Related: Weibo IPO should be turning points for Sina

It had about 129 million monthly users in December. Weibo has some catching up to do -- by comparison, Twitter (TWTR) averages 241 million monthly users and went public last November.

Friday's regulatory filing did not disclose the number of shares to be sold or the price range for those shares.

First Published: March 14, 2014: 7:06 PM ET

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Crimea: Economic fallout of a 'yes' vote

Crimea is voting on Sunday in a referendum to decide if the region should break from Ukraine and join Russia.

LONDON (CNNMoney)

The West has called the vote illegal, saying Russian military activity in Crimea violates Ukraine's sovereignty and will influence the outcome of the referendum.

U.S. and European leaders say Russia will pay a price for annexing Crimea, and German Chancellor Angela Merkel has warned of a potential "catastrophe."

Related: Live coverage of the crisis in Ukraine

If, as expected, Crimeans choose Russia over Ukraine, the fallout could ultimately affect economic growth, trade, investment and energy supplies.

Sanctions: Western powers may move as early as Monday to impose sanctions against leading Russians.

Europe and the U.S. would probably limit restrictions initially to travel bans and asset freezes on select individuals close to Russian President Vladimir Putin. Russia has said it will retaliate in kind.

The focus on individuals, rather than Russian companies or trade, reflects concern that a new Cold War could hurt the region's fragile economic recovery.

Russia's economy: While sanctions would hurt both sides, Russia would suffer much more than the West, analysts say. The European Union's exports to Russia account for 1% of EU gross domestic product. Russian exports to the EU are worth nearly 15% of Russian GDP.

Former Russian Finance Minister Alexei Kudrin, now an economic adviser to Putin, said even limited sanctions would hit foreign and domestic investment in Russia. Western banks are already shutting off credit lines. Kudrin was quoted by Russian media saying the economy may not grow at all this year as a consequence of the current tension.

Russian markets are reeling. The main stock market index has fallen by roughly 20% this year, and the ruble has plunged to record lows against the dollar. Investors pulled $33 billion out of the country in January and February, and that figure could hit $55 billion by the end of March, according to Russian investment bank Renaissance Capital.

Russia will also face a hefty bill for supporting Crimea. The region currently depends on Ukraine for roughly 70% of its budget, 90% of its water, and most of its energy and food supplies.

"It will be a great problem for [Russia] to supply ... all these necessary daily products for the population," said Yaroslav Pylynskyi, a director at the Woodrow Wilson Center.

Helena Yakovlev Golani from the University of Toronto estimates Russia will want to commit roughly $10 billion annually over the next five years to build infrastructure, support pensions and pay social benefits to the region's 2 million people.

Energy supplies: As long as the crisis doesn't spill over into other parts of Ukraine, analysts believe a full scale trade war should be averted and Russia will keep pumping critical supplies of energy to Europe.

In its weakened economic state, Russia can't afford to lose export revenues. And the threat of a suspension of gas supplies is less potent than the last time it happened -- in 2009 -- because European gas stockpiles are higher and the weather is getting warmer.

Related: 4 reasons Russia will keep gas flowing

Europe's economy: European markets could suffer modest and short-lived losses from the chill in relations with Russia, given close business and trading ties. Germany would be most exposed -- it has more than 6,000 companies active in Russia.

Still, economists expect the fallout to be contained. Berenberg's Holger Schmieding said the hit to Germany's economic growth would be at most 0.1% to 0.2% over the next 12 months, assuming the crisis is limited to Crimea. That would leave the European recovery intact.

Ukraine: With or without Crimea, Ukraine will need billions in financial support over the next few months to get back on its feet.

The EU has offered Ukraine $15 billion over the next two years, in the form of loans, grants, investments and trade concessions. The U.S. has promised $1 billion in loan guarantees, and the World Bank is talking about backing infrastructure and social security projects worth $3 billion.

A team from the International Monetary Fund has been on a fact-finding mission in Kiev since March 4. The IMF said Thursday the team would stay until March 21 to begin negotiations on a program of support and economic reform.

-- CNN's Isa Soares contributed to this report.

First Published: March 15, 2014: 7:54 AM ET

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China loosens grip on its currency

HONG KONG (CNNMoney)

The People's Bank of China announced Saturday that it would double the allowable trading range for the yuan against the dollar to 2% from a midpoint rate it sets every day.

The change, which is effective Monday, means the yuan will go up and down in value more than it has in the past.

Related: China to fight pollution with drones

While the move had been largely expected, as the yuan was already trading in the last month at a wider range than usual, the announcement remains significant for a government that has always tightly controlled the exchange rate to keep it at favorable terms.

In fact, it's been nearly two years since the government broadened the yuan's trading range.

Related: Why ex-pats are ditching their passports

China has touted a goal of opening up its economy since President Xi Jinping took his post a year ago, including unwinding tight currency controls and allowing greater foreign investment. And experts say, so far, so good.

"From a macro perspective, today's band widening shows Beijing's determination to speed up financial reforms," HSBC analysts Paul Mackel and Qu Hongbin wrote in a research note. "A wider trading band should pave the way for a more flexible exchange rate and capital account convertibility."

Many investors have always viewed the yuan, also called the renminbi, as a safe bet -- a one-way appreciation game.

But the Chinese government is now trying to show that its currency markets are just as susceptible to outside factors. Doing so may boost outside confidence in the yuan and help promote offshore hubs for the currency -- an endeavor the government is eager to promote.

The central bank said in a statement that it would continue to promote two-way flexibility, while keeping the yuan "fundamentally stable within reasonable and balanced levels."

"As financial reforms pick up pace, there will be more two-way cross-border capital flows," according to HSBC. "Increasing two-way capital flows, greater RMB flexibility and wider usage of the RMB in trade and investment are likely to be the new normal in the next few years."

Given that, the volatility of the yuan will continue, experts say. HSBC expects $1 to eventually equal 5.98 yuan at the end of the year.

First Published: March 15, 2014: 2:01 PM ET

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GM raising Corvette prices

NEW YORK (CNNMoney)

The base price of the sports car just went up by $2,000, going from $51,000 to $53,000. General Motors (GM, Fortune 500) also increased prices for the Stingray convertible by $2,000. It now costs $58,000.

In addition, the price of the Z51 performance option package went up by $1,200. It now costs $4,000. The Z51 package adds larger wheels, performance tires and special aerodynamic features, among other things.

Gallery - Driving the new Corvette Stingray

"The consumer demand for Stingray has far exceeded our expectations, particularly for the Z51 package," GM spokesman Monte Doran said.

Days-to-turn, an industry term for the average amount of time a car sits on a dealer lot before going to a customer, is seven days for the Corvette, Doran said. The industry average is about 60 days.

The Corvette was completely redesigned for the 2014 model year and has won a number of awards, including Automobile Magazine's Automobile of the Year. The two-seat sports car is powered by a 455-horsepower V8 engine.

First Published: March 7, 2014: 5:40 PM ET

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Boeing reports wing cracks on Dreamliners

'Hairline cracks' were found on the wings of some Dreamliner jets still in production.

NEW YORK (CNNMoney)

"Hairline cracks" were found on the wings of some jets still in production, the company said Friday.

The aerospace company is inspecting the 40 planes it says may be affected. It will take between one and two weeks to address the issue, wrote spokesman Marc Birtel in an email. He said the company is confident that the problem does not exist for any planes currently in service.

Boeing (BA, Fortune 500) was notified by its supplier Mitsubishi Heavy Industries that a change in its manufacturing process may have led to the cracks. Mitsubishi did not immediately return a call for comment.

Related: Boeing to end pensions for non-union workers

The wing cracks are only the most recent problem Boeing has faced with its 787 Dreamliner, a lightweight wide-body jet that uses composite materials instead of aluminum to be more fuel efficient than other similar planes.

The Dreamliners were grounded by the Federal Aviation Administration in January 2013 due to a fire risk associated with the plane's batteries. The problem was fixed, but an empty Dreamliner jet caught fire last July at Heathrow's airport due to a problem with an emergency beacon.

Despite those problems, there is still consumer demand for the jet and Boeing ramped up production throughout last year.

The company said there may be some immediate delays in deliveries, but it does not expect the recently discovered wing cracks to impact deliveries planned to be made throughout the rest of 2014.

First Published: March 7, 2014: 6:41 PM ET

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How a marijuana ad went up in smoke

NEW YORK (CNNMoney)

The press release in question was published Monday on behalf of MarijuanaDoctors.com, a company that says it helps connect patients with doctors who prescribe medical marijuana.

The release stated that MarijuanaDoctors.com was buying television ads through a division of Comcast (CMCSA, Fortune 500), marking -- its words here -- "the first time that any 'major' U.S. network has ever allowed the advertising of a medical marijuana service."

Turns out that was a false claim -- the ads never actually aired.

But reporters for news organizations, including ABC News, Time magazine and The Chicago Tribune, all published stories as if the press release was fact. A CNN newscast included a mention of the alleged pot ads, too. Even "NBC Nightly News with Brian Williams" covered the story, despite the fact that NBC is owned by Comcast, which explicitly denies that the ads ever ran on any of its cable systems.

Related: Colorado stash: $184 million in marijuana taxes

Here's what happened, as best I can tell. The company commissioned a very creative ad that showed a shady-looking actor peddling sushi and asking the question, "You wouldn't buy your sushi from this guy, so why would you buy your marijuana from him?" The ad pitched its service as a better, safer way.

Once the ad was uploaded to YouTube, the company distributed a press release that proved hard for journalists to resist. It claimed a "first" — "first marijuana television commercial," even though other ads have aired in the past — and told a reporter-friendly tale of perseverance: Jason Draizin, the chief executive of MarijuanaDoctors.com, was quoted as saying that "securing the airtime for our commercial on a major network was extremely difficult and at the same time, extremely satisfying."

Comcast's Comcast Spotlight unit sells ad time on cable channels in local communities. (Cable channels like CNN typically reserve a portion of every hour for these kinds of ads.) The press release said the ad would run in New Jersey on A&E, AMC, CNN, ESPN, and a number of other channels. But Comcast Spotlight never gave the pot ads a final thumbs-up, so it never aired.

Unfortunately, though, the Comcast representative who initially fielded questions about the attempted ad buy didn't know that. "Comcast spokeswoman Melissa Kennedy today said the Monday night ad was the first of others that will only air in states where medical marijuana is legal," ABC's story about the ads said. "The ads will air between 10 p.m. and 5 a.m., she added, but exclude children's and family programming."

Other reporters were given similar information, and stories started popping up all over the Web with variations of this very confident-sounding headline in the New York Daily News: "First medical marijuana commercial airs in New Jersey."

On Tuesday, I started to ask Comcast representatives about the ads. While I waited for answers, more inaccurate stories were published by more Web sites, hungry for the web traffic that a topic like marijuana provides.

But Wednesday, spokeswoman Jennifer Khoury confirmed what I'd suspected: "The ad has not appeared on Comcast Spotlight and media reports and press releases to the contrary are incorrect."

What happened here? It seems that MarijuanaDoctors.com jumped the gun, publishing its press release before it was sure the ad was going to air. "All commercials are subject to final review by Comcast Spotlight prior to airing and during that process it was determined that the spot did not meet our guidelines," Khoury said.

When I told Draizin this on Thursday, he disputed it. He told me that "the ads continue to be aired," adding "We are receiving phone calls from patients and doctors in New Jersey who have seen the ads." (My guess is the phone calls were from people who had seen the video on YouTube or in the media coverage that ensued.)

Related: Feds working on new pot banking rules

The media coverage, of course, put the Web site in front of far more eyeballs than the attempted ad buy ever would have. Thursday evening, the ad was even highlighted on "NBC Nightly News" with Brian Williams playing a clip from it and noting that "so far it's airing just in New Jersey."

On Friday, one of Draizin's representatives called and said what Comcast had said Wednesday — that the ads hadn't aired at all. That prompted MarijuanaDoctors.com to write a new press release. In it, the company acknowledged that "the campaign had not, in fact, launched," and said it would be speaking with Comcast executives Monday "in order to get to the bottom of this situation."

"For now, the campaign in New Jersey has ended," Draizin said Saturday in a statement. He went on to say that "we are very satisfied to have achieved our objective" — that is, informing people about its service. Presumably he meant through the news media, not through its ad.

First Published: March 8, 2014: 2:33 PM ET

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Albertsons to buy Safeway

Albertsons and Safeway, two grocery store chains, will merge.

NEW YORK (CNNMoney)

The move will create a network of 2,400 stores, 27 distribution facilities and 20 manufacturing plants with more than 250,000 employees.

No stores will close because of the merger, which is expected to be finalized later this year.

Still, the combined company will be be slightly smaller than Kroger, the largest grocery retailer in the U.S., which has 2,600 stores.

"Working together will enable us to create cost savings that translate into price reductions for our customers," said Albertsons CEO Bob Miller in the release.

Those cost savings could come if the two companies are combined and run efficiently, said Ken Perkins, an analyst at Morningstar.

"If they're buying more, they may have pull to get more favorable terms when negotiating with suppliers," Perkins said.

Albertsons, which is privately owned by Cerberus Capital Management, Kimco Realty Corporation, Klaff Realty, Lubert-Adler Partners, and Schottenstein Stores Corporation, will acquire all Safeway shares.

Safeway (SWY, Fortune 500) shareholders are expected to receive $40 per share. That values the deal at more than $9 billion. Shares of Safeway fell more than 3% in after-hours trading.

Bob Miller will become the executive chairman, while Robert Edwards, Safeway's current president and CEO, will become president and CEO of the combined company.

The merger comes at a time when traditional supermarkets have been struggling to compete with the larger chains like Costco (COST, Fortune 500) and Wal-Mart (WMT, Fortune 500). Those rivals are willing to take lower profit margins because they know food drives people into their stores, Perkins said.

First Published: March 6, 2014: 6:13 PM ET

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