Sunday, August 11, 2013

Business Media & Good/Bad News Flow

Let's face it, bad news sells, good news .. not so much. Remember the plethora of bad news articles and commentaries surrounding Facebook when it got listed with an IPO price of $38, it went downhill all the way ... way way to low 20s, and that was less than 14 months ago. With each passing dollar down, news articles were rampant on what went wrong. Did you know as of last week Facebook went above $38? Not many do unless they traded US stocks. It did not magically surged to $38 from low 20s overnight, it took months, well much of it over the last 3 months, but most of us would not be aware because there was scant coverage on the whys and hows on the way up. Newsies love a bad story, editors love a bad breaking story.

So if you want to get depressed quick, always stay put with the news .. be it from the dailies, the TV or the radio.

Here is another good story which many would not have heard of. As a business person, I am always amazed at how certain big companies can somehow reinvent, recharge themselves and turn the tables. Its not easy to shift a titanic, and its not like your competition is staying still.

Everyone now knows Audi is the top dog but where was it 10 years ago? What happened? What happened is what I love about business, you cannot say CEOs do not matter, you cannot say board of directors do not matter, employees can only do so much ... they have to be put on the right path, get the right trajectory, make the right changes, all without disrupting the morale of the company too much.

Many would have heard of Tesla the new darling of the market, however one car maker has been able to more than match the stock price performance of Tesla and that is Subaru, owned and made by Fuji Heavy Industries. FHI has risen 500% since beginning 2012, largely owing to the growing success and acceptance of Subaru by car buyers. Surprised?

Profits and sales are heading toward records after the company benefited more than most Japanese carmakers from the weakening of the yen and as new models.  Among those sales is the BRZ, jointly developed with Toyota, which was so popular it once had an eight-month waiting list in the U.S. Sales of Impreza sedans more than doubled in 2012 after the company introduced a remodeled version in 2011. The new Forester SUV introduced last year earned the highest safety evaluation by the U.S. Insurance Institute for Highway Safety this year, making Subaru the only carmaker with a Top Safety Pick winner in its lineup for four consecutive years, the company said. Funny thing is that Toyota Motors, which have had a torrid 5 year, is FHI's biggest shareholder.

Part of its recent success can be attributed to luck. The company’s failure to win Chinese approval to build cars in the country became a blessing last year, after a territorial dispute over a group of uninhabited islands fueled a wave of anti-Japan protests across China. Fuji Heavy was largely immune to the backlash that led Toyota, Nissan Motor Co. and Honda Motor Co. to report drops in China sales in 2012.