Under Armour scores invite to S&P 500

NEW YORK (CNNMoney)

That puts it in the ranks of the largest largest companies on U.S. stock exchanges -- call it the "varsity league" of stocks.

Under Armour (UA) stock has been on the kind of winning streak that the Yankees would envy. It has skyrocketed 850% over the past half-decade. It will replace Beam (BEAM) in the S&P lineup once the alcohol company's $13.6 billion buyout from Japan's Suntory Holdings is completed next week.

Related: Under Armour's crew of star athletes

But the Baltimore-based company didn't get much of a victory lap. Under Armour shares fell on Friday, which is somewhat unusual since new additions to the S&P 500 typically enjoy a bounce as funds that track the broad benchmark buy shares of the companies in the index.

The problem is the athletic-gear maker is a member of the "momentum crowd", a group of stocks that has quickly gone out of style on Wall Street as investors increasingly shift their money into stocks of more boring, but stable companies.

Under Armour experienced that shift first hand on Thursday, when the company's shares tumbled over 7% despite revealing a 73% leap in profits and indicting a lot of optimism about the rest of the year.

Still, the addition to the S&P 500 highlights the ability of Under Armour in recent years to challenge industry leaders Adidas (ADDDF) and Nike (NKE, Fortune 500), the latter of which was added to the even more exclusive Dow Jones industrial average in 2013.

Under Armour sports strong profit margins and impressive growth overseas, where sales surged 92% in the first quarter from the year before. The company has also boosted sales by expanding into new categories, including hunting and golf.

Earlier this year, Under Armour scored a 10-year deal to become the official sports apparel outfitter of Notre Dame's varsity teams. Terms were not disclosed but the blockbuster deal is estimated to be worth around $100 million.

So far Under Armour has been able to weather the storm stemming from the Winter Olympics, where the U.S. speed-skating team blamed the company's high-tech suits for slowing them down in Sochi. The speed-skating team even extended its exclusive contract with Under Armour.

Shares of Under Armour fell over 1.5% on Friday, trimming their 2014 gains to below 15%.

On the other hand, LinkedIn (LNKD) dropped about 5% as the professional social network was snubbed from the S&P 500 despite ample speculation earlier in the week that it would get the bid to join the lineup.

First Published: April 25, 2014: 11:44 AM ET

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Elon Musk's SpaceX will sue U.S. over rocket contract

Musk claims his aerospace company SpaceX was unfairly shut out of a contract for rocket launches he says he can do for less money.

WASHINGTON (CNNMoney)

SpaceX plans to sue the U.S. Air Force to challenge a $7.2 billion contract awarded to a company called United Launch Alliance, Musk said at a news conference on Friday.

The alliance, a venture of Boeing (BA, Fortune 500) and Lockheed Martin (LMT, Fortune 500), is set to use rocket boosters to launch things like GPS satellites into space for the federal government.

The contract, Musk charged, "essentially blocks companies like SpaceX from competing for national security launches."

"This really doesn't seem right to us," added Musk, whose electric car maker Tesla (TSLA) is challenging established auto companies.

The Air Force did not respond to a request for comment.

United Launch Alliance spokeswoman Christa Bell said the contracting process began in 2011. She said the ULA contract was able to deliver $4 billion worth of savings compared to past contracts.

"ULA recognizes the DOD plan to enable competition and is ready and willing to support missions with same assurance that we provide today," Bell said.

Related: Elon Musk's ventures

SpaceX has filed notice that it plans to sue the Air Force, the first step before a federal contract can be challenged. The suit will be filed late Friday or Monday, a spokesman said.

Musk alleged the United Launch Alliance contract is costing taxpayers "billions of dollars, for no reason" because SpaceX could provide launch rockets more inexpensively.

SpaceX has a $1.6 billion contract to launch a dozen unmanned cargo ships to the International Space Station, delivering equipment and supplies.

First Published: April 25, 2014: 3:13 PM ET

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Taco Bell tests new restaurant aimed at Chipotle crowd

A rendering of a U.S. Taco Co. shows an eatery that could compete with chains like Chipotle and Qdoba.

NEW YORK (CNNMoney)

How far is Taco Bell branching out? The Mexican Car Bomb isn't even a taco. It's a vanilla shake with Guinness, tequila caramel sauce and chocolate flakes.

U.S. Taco Co is set to open in Huntington Beach, Calif., this summer, with a taco-focused menu -- but not the same tacos you can buy for a buck or two at Taco Bell.

The "Brotherly Love" will be like eating a Philly cheese steak stuffed inside a flour tortilla. The "Winner Winner" adds a southern twist, with crispy chicken and gravy.

The southern California location is a test-run, but it could be the first of dozens across the country, Taco Bell CEO Greg Creed told the Orange County Register.

The eatery won't offer Mexican restaurant favorites like burritos or tortilla chips, and instead it will sell steak fries with tacos.

Related: Why McDonald's is offering free coffee

U.S. Taco Co. aims to fit in with other "fast-casual" chains like Chipotle, Qdoba Mexican Grill and Panera, said Morningstar analyst R.J. Hottovy.

Those chains offer higher quality food at the same speed as a fast-food joint.

U.S. Taco Co's menu will offer steak fries and milk shakes along with tacos.

It's a growing industry so it makes sense that Taco Bell, owned by Yum! Brands (YUM, Fortune 500), would want to enter the field.

"The cost to operate isn't as high as casual restaurants, but they can still charge higher prices. It's very lucrative," Hottovy said.

The tacos will cost $4 at the new restaurant, while most cost under $2 at the nearly 6,000 Taco Bell locations in the United States.

First Published: April 25, 2014: 4:39 PM ET

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Taco Bell tests new restaurant aimed at Chipotle crowd

A rendering of a U.S. Taco Co. shows an eatery that could compete with chains like Chipotle and Qdoba.

NEW YORK (CNNMoney)

How far is Taco Bell branching out? The Mexican Car Bomb isn't even a taco. It's a vanilla shake with Guinness, tequila caramel sauce and chocolate flakes.

U.S. Taco Co, set to open in Huntington Beach, Calif., this summer, with a taco-focused menu -- but not the same tacos you can buy for a buck or two at Taco Bell.

The "Brotherly Love" will be like eating a Philly cheese steak stuffed inside a flour tortilla. The "Winner Winner" adds a southern twist, with crispy chicken and gravy.

The southern California location is a test-run, but it could be the first of dozens across the country, Taco Bell CEO Greg Creed told the Orange County Register.

The eatery won't offer Mexican restaurant favorites like burritos or tortilla chips, and instead it will sell steak fries with tacos.

Related: Why McDonald's is offering free coffee

U.S. Taco Co. aims to fit in with other "fast-casual" chains like Chipotle, Qdoba Mexican Grill and Panera, said Morningstar analyst R.J. Hottovy.

Those chains offer higher quality food at the same speed as a fast-food joint.

U.S. Taco Co's menu will offer steak fries and milk shakes along with tacos.

It's a growing industry so it makes sense that Taco Bell, owned by Yum! Brands (YUM, Fortune 500), would want to enter the field.

"The cost to operate isn't as high as casual restaurants, but they can still charge higher prices. It's very lucrative," Hottovy said.

The tacos will cost $4 at the new restaurant, while most cost under $2 at the nearly 6,000 Taco Bell locations in the United States.

First Published: April 25, 2014: 4:39 PM ET

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Under Armour scores invite to S&P 500

NEW YORK (CNNMoney)

That puts it in the ranks of the largest largest companies on U.S. stock exchanges -- call it the "varsity league" of stocks.

Under Armour (UA) stock has been on the kind of winning streak that the Yankees would envy. It has skyrocketed 850% over the past half-decade. It will replace Beam (BEAM) in the S&P lineup once the alcohol company's $13.6 billion buyout from Japan's Suntory Holdings is completed next week.

Related: Under Armour's crew of star athletes

But the Baltimore-based company didn't get much of a victory lap. Under Armour shares fell on Friday, which is somewhat unusual since new additions to the S&P 500 typically enjoy a bounce as funds that track the broad benchmark buy shares of the companies in the index.

The problem is the athletic-gear maker is a member of the "momentum crowd", a group of stocks that has quickly gone out of style on Wall Street as investors increasingly shift their money into stocks of more boring, but stable companies.

Under Armour experienced that shift first hand on Thursday, when the company's shares tumbled over 7% despite revealing a 73% leap in profits and indicting a lot of optimism about the rest of the year.

Still, the addition to the S&P 500 highlights the ability of Under Armour in recent years to challenge industry leaders Adidas (ADDDF) and Nike (NKE, Fortune 500), the latter of which was added to the even more exclusive Dow Jones industrial average in 2013.

Under Armour sports strong profit margins and impressive growth overseas, where sales surged 92% in the first quarter from the year before. The company has also boosted sales by expanding into new categories, including hunting and golf.

Earlier this year, Under Armour scored a 10-year deal to become the official sports apparel outfitter of Notre Dame's varsity teams. Terms were not disclosed but the blockbuster deal is estimated to be worth around $100 million.

So far Under Armour has been able to weather the storm stemming from the Winter Olympics, where the U.S. speed-skating team blamed the company's high-tech suits for slowing them down in Sochi. The speed-skating team even extended its exclusive contract with Under Armour.

Shares of Under Armour fell over 1.5% on Friday, trimming their 2014 gains to below 15%.

On the other hand, LinkedIn (LNKD) dropped about 5% as the professional social network was snubbed from the S&P 500 despite ample speculation earlier in the week that it would get the bid to join the lineup.

First Published: April 25, 2014: 11:44 AM ET

14.44 | 0 komentar | Read More

Elon Musk's SpaceX will sue U.S. over rocket contract

Musk claims his aerospace company SpaceX was unfairly shut out of a contract for rocket launches he says he can do for less money.

WASHINGTON (CNNMoney)

SpaceX plans to sue the U.S. Air Force to challenge a $7.2 billion contract awarded to a company called United Launch Alliance, Musk said at a news conference on Friday.

The alliance, a venture of Boeing (BA, Fortune 500) and Lockheed Martin (LMT, Fortune 500), is set to use rocket boosters to launch things like GPS satellites into space for the federal government.

The contract, Musk charged, "essentially blocks companies like SpaceX from competing for national security launches."

"This really doesn't seem right to us," added Musk, whose electric car maker Tesla (TSLA) is challenging established auto companies.

The Air Force did not respond to a request for comment.

United Launch Alliance spokeswoman Christa Bell said the contracting process began in 2011. She said the ULA contract was able to deliver $4 billion worth of savings compared to past contracts.

"ULA recognizes the DOD plan to enable competition and is ready and willing to support missions with same assurance that we provide today," Bell said.

Related: Elon Musk's ventures

SpaceX has filed notice that it plans to sue the Air Force, the first step before a federal contract can be challenged. The suit will be filed late Friday or Monday, a spokesman said.

Musk alleged the United Launch Alliance contract is costing taxpayers "billions of dollars, for no reason" because SpaceX could provide launch rockets more inexpensively.

SpaceX has a $1.6 billion contract to launch a dozen unmanned cargo ships to the International Space Station, delivering equipment and supplies.

First Published: April 25, 2014: 3:13 PM ET

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Tesla finds friends in the FTC

A Tesla Motors vehicle in a Miami showroom.

NEW YORK (CNNMoney)

Three officials at the agency argued Thursday that the electric car company should be permitted to sell vehicles directly to customers.

Many states currently forbid the practice of automakers selling cars to customers outside of the established dealer network, and the officials say that's a "bad policy."

In a post on the FTC's blog, the three officials write that these state laws stifle competition, hurt consumers and the chance for new businesses to succeed. The blog post isn't more than a recommendation, as auto sales are mostly regulated at the state level, and the authors say that it does not necessarily reflect the views of the commission.

"We hope lawmakers will recognize efforts by auto dealers and others to bar new sources of competition for what they are—expressions of a lack of confidence in the competitive process that can only make consumers worse off," they write.

Related: Where you can buy a Tesla

Tesla (TSLA) CEO Elon Musk has been vocal about not wanting to use the traditional dealer model. He's fought with states like New York and New Jersey to keep Tesla stores open. His company is outright banned from selling vehicles the way he wants in other states like Texas.

Dealership lobbies are strong in many states and argue that the law protects small local dealers from abusive practices by manufacturers. But the FTC officials write that these laws have become "protectionist," preserving just one way of selling cars: through an independent care dealer.

Plus, they argue, Tesla sold just 22,000 out of the 15 million cars sold in the U.S. last year, hardly threatening established dealers. It has never had any independent dealers, and does not want them, they write.

Tesla could not immediately be reached for comment.

The dealership lobby isn't backing down, fearing Tesla's ways could pave the way for larger automakers to sell cars directly, too, and ultimately undermine the system of franchised auto dealers.

The National Automobile Dealers Association, an industry trade group representing 16,000 new car and truck dealerships, argues that dealers competing for customers in local markets, rather than factory owned stores, help give shoppers more bargaining power.

"Buying a car isn't like buying a pair of shoes online," said Jonathan Collegio, vice president of public affairs for the NADA. "Cars require licensing to operate, insurance and financing to take home, and contain hazardous materials, so states are fully within their rights to protect consumers by standardizing the way cars are sold," he said.

First Published: April 24, 2014: 8:57 PM ET

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Internet giant Sina caught in China porn crackdown

HONG KONG (CNNMoney)

Official state media reported that authorities will strip Sina.com of its video and audio publication licenses after finding lewd videos and images on the website.

It was not immediately clear how the Sina's operations would be affected, but the company's social media platforms and websites appeared to be functioning on Friday.

Chinese authorities have embarked on an anti-porn campaign in recent weeks, but the high-profile shaming of Sina is a surprise escalation that signals Beijing's determination to remove what it considers to be objectionable content.

Authorities have closed hundreds of websites and thousands of user accounts as part of the wider crackdown, according to state media.

The National Office Against Pornographic and Illegal Publications said it had found 20 pornographic articles and four videos on Sina.com. The agency said in a statement that it had referred several individuals involved in the case to police.

State media carried an apology from Sina (SINA), in which the company offered its "most sincere apology to all netizens and the public."

Related story: Move over Facebook, Alibaba's mega IPO is coming

The internet and media are closely controlled and censored in China. Services including Facebook (FB, Fortune 500) and Twitter (TWTR) are banned in the country, and Beijing has invested heavily in a firewall that restricts access to controversial websites.

The move against Sina comes just days after one of its social media properties, Weibo (WB), rallied 19% in its New York IPO.

Shares of the Chinese social media platform, which is often compared to Twitter, fell 4.5% in Thursday trading. Sina maintains a controlling stake in Weibo.

First Published: April 25, 2014: 2:04 AM ET

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Alibaba founders fund mega charity ahead of IPO

Alibaba founder Jack Ma has created charitable trusts that could be worth more than $3 billion.

HONG KONG (CNNMoney)

Alibaba co-founder Jack Ma, along with current CEO Joe Tsai, said Friday that they have established two trusts funded by share options worth about 2% of the company. The philanthropic effort will initially benefit environmental, medical, education and cultural causes in China, according to a statement.

Alibaba is widely expected to soon announce plans for a mega IPO that will rank among the largest in history.

Some analysts say the company is currently worth more than $170 billion -- a figure that would value the trusts at roughly $3.4 billion.

Alibaba, founded 15 years ago, has a stranglehold on the e-commerce business in China, and its online shopping sites account for about 80% of the industry.

The company has also expanded to a number of business areas, including online payment services and start-up investing.

Related story: Move over Facebook, Alibaba's mega IPO is coming

Ahead of the IPO, Ma is ranked China's 29th richest man with a net worth of over $4 billion, according to the Hurun Rich List, which tracks wealth in the world's second-largest economy.

Ma, who currently serves as executive chairman, said he established the trusts because "concern and complaints cannot change the current situation."

"We must assume responsibility and take action to improve the environment that our children will inherit," he said.

The establishment of the trusts makes Ma one of China's first billionaires to set up a major philanthropic endeavor, and puts him in the ranks other successful executives who have pledged large portions of the fortunes to charity.

Three of those -- Michael Bloomberg, Bill Gates and Warren Buffett -- praised Ma's decision in the statement issued by Alibaba.

"Their gifts set a new bar for philanthropy in China, and hopefully other entrepreneurs and business leaders around the world will follow in their footsteps," said Bloomberg, the former New York City Mayor and founder of Bloomberg Philanthropies.

First Published: April 25, 2014: 1:31 AM ET

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Regulators pave way for Internet "fast lane" with net neutrality rules

FCC chairman Tom Wheeler, a former cable industry lobbyist.

NEW YORK (CNNMoney)

The news quickly drew condemnations from net neutrality activists, who say the proposal from the Federal Communications Commission will give large companies that can afford to pay for priority access a permanent advantage over smaller competitors.

The proposal follows a January court decision that struck down the FCC's previous net neutrality rules, which barred Internet service providers like Verizon (VZ, Fortune 500) and Comcast (CMCSA, Fortune 500) from blocking or "unreasonably discriminating" against online content. Those regulations were challenged in 2011 by Verizon, which claimed the move overstepped the commission's legal authority, and the FCC has since been working to craft new rules that will pass legal muster.

The rules to be proposed on Thursday, according to an FCC spokesman, will require ISPs to offer "a baseline level of service" to their subscribers while allowing them to "enter into individual negotiations with content providers." That means that companies like Amazon (AMZN, Fortune 500), eBay (EBAY, Fortune 500) and Netflix (NFLX) could conceivably pay ISPs to ensure that their sites load for Web users faster than those of competitors.

Related: How net neutrality fight may change your Internet

In all cases, the FCC proposal says, Internet providers must act in a "commercially reasonable manner," with agreements between ISPs and content providers subject to review by regulators on a case-by-case basis.

"Exactly what the baseline level of service would be, the construction of a 'commercially reasonable' standard, and the manner in which disputes would be resolved, are all among the topics on which the FCC will be seeking comment," the FCC spokesman said.

The commission will vote on the proposed rules May 15 before putting them out for comment. In the meantime, Net freedom activists are already crying foul.

"If it goes forward, this capitulation will represent Washington at its worst," Todd O'Boyle, program director of Media and Democracy Reform Initiative at Common Cause, said in a statement. "Americans were promised -- and deserve -- an Internet that is free of toll roads, fast lanes, and censorship -- corporate or governmental."

Craig Aaron, president of the media freedom group Free Press, said the FCC was "aiding and abetting the largest ISPs in their efforts to destroy the open Internet." He said the FCC proposal would create the incentive for Internet providers to manufacture congestion on their networks and then charge content providers for the ability to avoid it.

Verizon spokesman Ed Mcfadden declined to comment directly on the FCC proposal, but said his company is committed to letting customers "access the Internet content they want, when they want and how they want."

"Given the tremendous innovation and investment taking place in broadband Internet markets, the FCC should be very cautious about adopting proscriptive rules that could be unnecessary and harmful," Mcfadden said.

Comcast and AT&T did not immediately respond to requests for comment.

Related: New chapter begins in net neutrality fight

The FCC's planned rules relate specifically to broadband, which is used for most home Internet connections. They won't cover the mobile Web, which is much more lightly regulated.

Concerns about traffic discrimination have already arisen in the mobile world. Earlier this year, AT&T (T, Fortune 500) announced a "sponsored data" plan for mobile customers in which content from paying businesses won't count against monthly data caps. Verizon and AT&T have also previously blocked use of the Google (GOOG, Fortune 500) Wallet app, which competes with their own offerings.

The FCC rules also won't cover deals like the one reached earlier this year between Netflix (NFLX) and Comcast, in which the online video company reluctantly agreed to pay for a direct connection to Comcast's network to boost lagging streaming speeds. That's because the proposal only relates to what ISPs do with content in the so-called "last mile" of their networks, where they connect directly to the homes of customers.

Netflix CEO Reed Hastings has called for the FCC to implement "stronger" net neutrality rules that would also cover connections between networks.

First Published: April 23, 2014: 7:42 PM ET

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