FedEx’s New Plan To Deliver Value

With shares of FedEx sitting at the same level as five years ago, executives have been looking for new ways to “deliver” value. πŸ€”

One of those ways is by changing the operating structure that founder Fred Smith loved but investors and analysts criticized. πŸ“‹

The change was initially suggested by activist investor D.E. Shaw who won two additional board seats last year. Now, that vision is coming true. Executives announced today that they’re integrating FedEx Ground (outsourced package delivery) with FedEx Express (overnight air delivery).Β 

FedEx Chief Executive Raj Subramaniam said the change will help the company trim down its infrastructure and cost base. Like its competitors, a demand slowdown has hit FedEx at the same time as costs have risen significantly. And while the company has been able to raise prices, it’s not been enough to offset the decline in global shipping volumes. πŸ“¦

Under the new structure, FedEx will use a “hybrid” employee and contractor model for deliveries, continuing its non-union approach. Additionally, FedEx Freight will continue operating as a standalone company under the Federal Express Corp banner. πŸ›«

The shift is part of FedEx’s plan to cut $4 billion in permanent costs by the end of the fiscal year 2025. It hopes to become more competitive with rival UPS, which has always used this operating model.

In addition to the cost-saving announcement, the company increased its dividend by 10% as it looks to entice shareholders further. πŸ’°

$FDX shares initially rose by 4% but closed up about 1.5%. πŸ“ˆ

Tinder’s New Tier Costs $500/Month

It was a slow-ish news day today, so the talk of the town was Tinder’s new $500-per-month plan. Like other “zero-interest-rate-policy” (ZIRP) darlings, the company’s parent, Match Group, has struggled to keep public market investors happy in a post-pandemic world. πŸ˜“

Growth has slowed significantly, so the company is betting big on premium “power users” who will pay $500 monthly for features like exclusive searching and matching. Tinder Select is currently only being offered to less than 1% of users among the app’s most active. But don’t fret; it plans to open up applications on a rolling basis, so you’ll still have a shot if you didn’t make the first cut.

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Another Chip Off The Ol’ Block

Last month, we discussed pain in payments landΒ with Dutch payments processor Adyen NV and U.S.-based PayPal treading water. πŸ’³

Today, the focus was on Jack Dorsey’s Block, previously known as Square, after its Square and Cash App services were reportedly down throughout Thursday. Its news sent shares of $SQ lower by about 5% as they continue to trade at a key technical level. πŸ“‰

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Sell The Rumor & The News

Unlike the excitement over the pizza at Casey’s General Store, Apple’s annual iPhone launch event was an absolute snoozefest. 😴

Investors had been looking for exciting changes to the product to help justify higher-priced phones or at least entice customers to upgrade; they were left disappointed. That’s because the iPhone 15 price was not raised and will again start at $799 for the base model and $999 for the pro model. The only model to see a change was the Pro Max, which will start $100 higher at $1,199.

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Pepsi Eyes Beverage Growth

Seemingly everyone from global conglomerates to content creators is getting in on the beverage space. That’s because beverage products tend to have much higher margins than food products. And if you can market your way through the competitive space, you can make a pretty penny. πŸ§ƒ

If you need evidence of that, just look at one of the best-performing stocks in the market, Monster Beverage. Since going public about thirty years ago, it has returned nearly 270,000%. It’s almost as if its stock price drank a lot of monster energy. 🀩

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