Obamacare will crush small business? Maybe not
Recapping the day's news and newsmakers through the lens of CNBC.
Obamacare good for business? C'mon now
Obamacare goes live on Tuesday, and owners and managers of many small businesses have been wringing their hands, worried health care expenses will torpedo profits and make it too expensive to hire. But some small business experts say the hit won't be so bad. Customer demand, not health care costs, determine the right staff levels, they say. And when it comes to red tape and paperwork, well, that's what your accountant is for. Recently, the rise in health insurance premiums has been slowing dramatically. Finally, many young, healthy, modestly paid workers may decline coverage, letting the boss off the hook.
"When it first came out, everyone said, 'Oh my God, it's going to kill our cash flow; it's not going to work.' The knee jerk was this is very bad thing for our business. ... [But Obamacare] doesn't have to be painful."—Gary Levy, head of the hospitality industry practice at CohnReznick, an accounting firm
"We recently expanded [our staff] in part because now we know what to expect with our health care premiums."—Jim Houser, owner of Hawthorne Auto Clinic in Portland, OR
Here's a case study for business executives: the crisis-management strategy at Lumber Liquidators, operator of 305 hardwood-flooring stores. Federal authorities have searched the firm's Virginia headquarters, but refrained from saying why. And the firm, rather than issuing a full-throated denial of wrongdoing, merely said it "has policies and procedures in place for the sourcing, harvesting and manufacturing of its products designed to comply with federal and other regulations." The firm said it would cooperate with investigators, but the statement didn't calm shareholders. The shares had a rough day, with investors hacking off five percent.
You can profit from BlackBerry ...
Could it get even worse for BlackBerry? Of course!
This morning BlackBerry reported tumbling revenue and a quarterly loss of nearly $1 billion, confirming expectations of worsening troubles for the mobile-device firm, which has put itself up for sale. The company plans to cut 4,500 jobs, or 40 percent of its workforce. The newest stink: a huge golden parachute that triples the CEO's pay to some $55 million after any change in ownership.
"This looks like a story of people making sure they are taking care of themselves even if the company, the employees, the area in which the company does its manufacturing, its partners and public are in no way taken care of."—Max Wolff, chief economist at GreenCrest Capital
At least Ackman got out before this
Troubled JC Penney cannot catch a break, unable to convince the markets it has a solid turnaround plan. Its stock tumbled 11 percent this morning after the retailer said it would issue up to $932 million in new shares to raise cash for the holiday season. The new issue will dilute existing shares, raising shares outstanding by 38 percent. The move suggests Penney's is burning cash faster than thought.
"While an equity raise improves [near-term] liquidity, we remain concerned that JCP will continue to burn cash in '14 and beyond."—UBS analyst Michael Binetti, who has a "sell" rating on the stock
Your very own private jet
Got to get somewhere quick? The fastest way is usually by private jet, with short security lines, direct-to-destination routes, no $25 bag fee and, quite possibly, a savory meal and free bar. Unfortunately, all of this can cost tens of thousands of dollars, unless you know how to work the system. In what's considered the industry's best kept secret, you can book an "empty-leg flight" on a private jet that otherwise would fly, well, empty—usually to pick up a client or return to home base. Full cost of a private jet one way from New York to Miami would be $10,000 to $12,000. The empty-leg rate could be as little as $2,000, or just a few hundred a person on a seven-seat plane. Various providers can book seats.
—By Jeff Brown, Special to CNBC.com