Best Growth Companies To Watch For 2014
Reed Saxon/AP SEATTLE -- Leaders in the International Association of Machinists publicly differed Friday on whether to bring Boeing's (BA) latest contract offer to a vote, exposing tensions within the union over how to handle the high-stakes negotiations. National union spokesman Frank Larkin said Friday that officials were exploring the idea after hundreds of members demanded an opportunity to vote on the contract to secure work on the 777X airplane. Larkin said members have always had the final say and that they have every right to vote on the terms of the offer. But local union officials said Friday they don't see any point in bringing it to a vote because it's too similar to a contract the union rejected a month ago. "So, until Boeing changes its conditions, we don't have an offer to vote on," said District 751 President Tom Wroblewski in a statement. A latest round of contract talks collapsed Thursday after local officials with the Machinists said they couldn't recommend Boeing's latest proposal to members. Local Machinists spokesman Bryan Corliss says Boeing has withdrawn the contract offer. Boeing spokesman Doug Alder, however, said the offer was rejected by the union, not withdrawn. He declined further comment Friday. Local union officials have seemed to disagree with their national leaders in recent weeks on how to handle Boeing's offers. That division was clear last month, when local union members voted to reject a contract negotiated by IAM leadership. Boeing and the Machinists have been exploring a deal that would secure the production of the new 777X airplane in the Puget Sound and the thousands of jobs that come with it. This week, Boeing made some changes to its original contract offer, backing away from a proposal that would slow the rate at which employees rise up the pay scale and adding an additional $5,000 in bonus pay. The biggest sticking point appears to be the company's insistence that workers move from a traditional defined-benefit pension to a defined-contribution savings plan. The local machinists said the company's latest proposal was too high of a price to pay to secure the 777X. "I think you'll agree these were very minor changes, and not nearly enough to offset the things Boeing was trying to take away from you, and for the Machinists who will join us in the future," Wroblewski wrote in a message to members Friday morning. Looming over the talks is the prospect that the company could build the airplane elsewhere. Boeing said it has received proposals from 22 states eager for the 777X jobs, with some proposing multiple sites. The company said 54 sites are now being evaluated. In its own bid to win the 777X jobs, Washington state recently approved tax breaks for Boeing valued at $9 billion over the coming years, along with legislation to improve aerospace training programs and the permitting process. Chicago-based Boeing began offering the 777X in May, but it's still finalizing plans for the plane and aiming to deliver the first aircraft by the end of the decade. Boeing has said it is expected to carry as many as 400 passengers and be more fuel efficient than the current 777. At the Dubai Airshow last month, Boeing received orders for 225 such planes from three airlines.
Alamy Barely a year has passed since Chinese conglomerate Dalian Wanda Group completed its $2.6 billion purchase of U.S.-based movie theater chain AMC Entertainment. In one fell swoop, that deal made it the world's biggest cinema operator -- with 432 theaters. Now, 15 months later, Wanda is ready to turn around and IPO AMC on the U.S. stock market -- and great news! They want to let you in on the deal. From Stubs-Member to Stockholder AMC operates a customer loyalty program that it calls "Stubs." Participants in this program pay a $12 annual membership fee. In return, they get benefits such as: $10 in movie theater credit for every $100 they spend at the theaters free upgrades on concessions in the lobby and a waiver of fees for buying tickets online. The prospect of "making your money back" after seeing just two films a year probably makes the program worthwhile all on its own. But this week, AMC added another bonus to the fringe benefits of its Stubs program: Loyal customers now get a chance to buy shares of AMC's stock on the cheap. Technically, AMC says the stock program is for its "employees," but as CEO Gerry Lopez explained : "We're offering this exclusive employee benefit to our AMC Stubs members to express our sincere gratitude for your loyalty." The Details According to the pitch, anyone who's a member of Stubs will be allowed to buy as little as $100 to as much as $2,500 worth of AMC shares at the IPO price, commission-free, by using the free online broker Loyal3. AMC currently plans to price the shares between $18 and $20. This could prove to be a very valuable fringe benefit, as it will give Stubs members a rare opportunity to "get in" on an IPO at the offer price, and to profit from any immediate jump in AMC's share price in the first minutes and hours after the stock begins trading. But there are caveats. First and foremost, there's absolutely no guarantee that AMC shares will go up in price at all, much less skyrocket. Indeed, a 2011 study conducted by BusinessWeek revealed that after initially "popping" from their IPO price, 20 of the 25 hottest IPOs held in 2010 and 2011 "tanked." While it's certainly conceivable that an investor might buy shares at the IPO, time his or her exit just right, and sell before the stock price drops, knowing when to sell is always an exercise in guesswork. Not to put too fine a point on it: If a stock jumps right out of the gate, and never looks back -- see: Tesla (TSLA), Twitter (TWTR) -- but you decide to make a quick couple bucks by selling after the first "pop," you'll kicking yourself for years. On the other hand, The New York Times cites multiple studies showing the downside -- severe -- of holding on too long. One study showed that nearly half of all IPOs ultimately lose money, and the median IPO loses as much as 30 percent of its value over the three years post-IPO. Another study suggests that nearly a third of companies that IPO go bankrupt within 10 years. So ... Should You Buy the IPO or Not? Which kind of IPO AMC will turn out to be is anybody's guess. But there are at a few numbers floating around that suggest that AMC's business isn't doing very well. For example, so far this year, AMC Entertainment posted $2.03 billion in sales. Yes, that was up 4 percent from the $1.96 billion in revenues the company had collected by this time, last year. But meanwhile, rival theater operator Regal Entertainment Group (RGC) was growing more than twice as fast, its revenues up 9.4 percent. Regal's also a more profitable operation than AMC, boasting 12.7 percent operating profit margins on its superior revenues over the past year, versus the mere 7.7 percent margin that AMC pulled down. Now, it's entirely possible that with new management from China, and a fresh infusion of cash from Stubs members, and other IPO investors, AMC will be able to turn itself around an catch up to the competition. But if AMC continues the way it's been going, this "free" fringe benefit of getting a piece of the AMC IPO could turn into an expensive mistake for Stubs members.
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