Monday, September 10, 2018
To kick off a new week in the U.S. indexes we see a few inter-weaving themes: CEOs stepping down (for different reasons) and expectations from Apple Inc. (AAPL - Free Report) as well as its suppliers. Les Moonves is exiting CBS Corp. (CBS - Free Report) , the company he’d run for more than 20 years, while Alibaba (BABA - Free Report) -co-founder Jack Ma gives himself exactly one more year at the helm of the firm. And before Apple unveils new products tomorrow, some of its Chinese suppliers sold off overnight.
Following more allegations surfacing in the New Yorker than Moonves was engaged in inappropriate sexual behavior with women in the workplace, the long-time media head is being forced out at CBS. He will be replaced on an interim basis as CEO by current COO Joseph Ianniello effective immediately. The new charges were published yesterday; the company did not wait til the workweek to drop the axe on Moonves.
Part of what would have been is severance package will be re-directed, it has been reported, to efforts supporting the #MeToo movement, which has for the past year or so sought to bring consequences to those who use sex-related behavior to demean, intimidate and otherwise abuse work relationships. Moonves is far from the first executive to face this music; he also may not be the last. For his part, Moonves calls the allegations “untrue.”
In related CBS news, controlling member Shari Redstone has announced she and her company, National Amusements, will no longer pursue a new merger with entertainment conglomerate Viacom . The companies had been merged from 1999 to 2005 previously. Also, six CBS board members interested in diluting Redstone’s control of the company will be stepping down.
Changing of the Guard at Alibaba
Also stepping down as the head of his company is Jack Ma, exactly one year from today. Expressing an interest to “try new things,” Ma will be replaced as Chairman by current Alibaba CEO Daniel Zhang. Ma will stay on the board at BABA through 2020.
Apple Suppliers Plummet
Staying in China another moment, suppliers of Apple components such as Luxshare Precision and Shenzhen Sunway fell 10% in the Chinese markets, following a tweet by President Trump where he mused that Apple parts should be made in the U.S. This is far from settled policy at this stage, but investors on the Shenzhen Stock Exchange were not amused to see further aggravation of U.S.-China trade issues hitting Apple and its Chinese suppliers.
Apple is also set to unveil two new high-end iPhones as well as a more-affordable model this week. We also expect to see a new Apple Watch released at its biggest hardware event of 2018. It’s nearly a year since Apple’s celebrated iPhone X came out; wil such a speedy turnaround of new Apple products be received with the same enthusiasm?
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