ADM pursues big ag merger with grain trader Bunge: source

CHICAGO/CALGARY, Alberta (Reuters) – Top U.S. grain merchant Archer Daniels Midland Co (ADM.N) has proposed a takeover of Bunge Ltd (BG.N), according to a person familiar with the approach, which could set up a bidding war with Swiss-based rival Glencore Plc (GLEN.L).

Large grain traders that make money by buying, selling, storing and shipping crops have struggled in recent years with global oversupplies. Thin margins have squeezed core commodity trading operations, including those of ADM, Bunge, Cargill Inc [CARG.UL] and Louis Dreyfus Co [AKIRAU.UL], which together are known as the “ABCDs” and dominate the industry.

Consolidation is seen as one remedy. Glencore last year sought a tie-up with Bunge in what was viewed as a start of a wave of mergers and acquisitions in the industry.

Bunge, which rebuffed an acquisition offer from Glencore last year, might not follow up on ADM’s proposal, the source said, requesting anonymity because the approach is confidential. A standstill agreement prevents Glencore from making a new offer until next month, and Bunge is keeping its options open for now, the source added.

White Plains, New York-based Bunge operates in more than 40 countries and is Brazil’s largest exporter of agricultural products, while Chicago-based ADM says it has customers in 160 countries.

Bunge, which has a market capitalization of $9.79 billion, closed up 11.4 percent at $77.56 on Friday. ADM has a market cap of $22.64 billion.

ADM said it does not comment on “rumors or speculation,” while Bunge did not respond to requests for comment. Glencore was not immediately available for comment. The Wall Street Journal first reported on ADM’s interest in Bunge.


Grain companies in recent years have expanded into higher-margin sectors, such as food ingredients and aquaculture, to offset weak results and wild swings in their traditional business of handling crops.

In 2014, ADM bought natural ingredient company Wild Flavors for about $3 billion in its biggest deal ever. The company has also expanded into handling healthy ingredients such as fruits, nuts and “ancient grains.”

“News of the ADM bid is a bit surprising given that ADM had been indicating the company’s strategic direction was more towards value-added rather the traditional commodities,” said Stephens Inc analyst Farha Aslam.

ADM is the most U.S.-focused of the major grain companies and a takeover would help it grow in South America, where Bunge is a major agricultural force.

ADM, which dates back to 1902, has tried to expand its international operations, in part to take advantage of growing demand from China. In 2013, Australia rejected its attempted $2.55 billion takeover of Sydney-based grain handler GrainCorp Ltd (GNC.AX) on concerns it could reduce competition.

Bunge was founded in Amsterdam 200 years ago. It moved its headquarters to South America as its operations grew in the region and relocated to New York ahead of an initial public offering in 2001.


Aslam estimated that fair value for Bunge in a takeover would be $90 to $95 per share, but Morningstar said the price could exceed $100.

Any tie-up would probably face stiff scrutiny from regulators and opposition from farmers who fear handing more market control to ADM could hurt wheat, corn and soybean prices.

The biggest overlap between ADM and Bunge in the United States is in grain origination and oilseeds processing, Aslam said. The companies would probably need to divest facilities in North America and also possibly in Europe, she added.

Aslam raised the possibility that ADM and Glencore could partner in a bid for Bunge to split up its operations.

“ADM would take the more value-added downstream businesses, and Glencore would own the more ag commodity businesses,” she said.


An ADM-Bunge merger would also face opposition from farmer groups in key agricultural markets, including the United States, European Union, China, India and Brazil, said Erik Gordon, a professor at the University of Michigan’s Ross School of Business.

The companies’ relatively late move into the big-agriculture merger game, behind DowDuPont (DWDP.N), Nutrien Ltd (NTR.TO) and others, would make gaining regulators’ approval even tougher, Gordon said.

“When you’re the first one, there’s still more competition,” he said. “Once they’ve let a few through, they may have second thoughts.”

Grain farmers need five or six active buyers to get fair prices for their goods, but there are already only a handful, said Peter Carstensen, who teaches law at the University of Wisconsin at Madison.

“This is the kind of transaction that will screw farmers,” he said.

Illinois farmer Dan Henebry, who delivers corn and soybeans to ADM’s North American headquarters in Decatur, Illinois, said he was worried a takeover of Bunge could lead grain handlers to pay farmers less for their crops.

“We’ve had so many mergers,” Henebry said. “Less competition is not good.”

Reporting by John Benny in Bengaluru, Rod Nickel in Calgary, Alberta, Tom Polansek in Chicago, Chris Prentice and Greg Roumeliotis in New York and Diane Bartz in Washington; Writing by Peter Henderson and Anna Driver; Editing by Leslie Adler and Lisa Von Ahn

Digital Is Dead

Has America lost its fascination with the tech industry? An article that went viral on CNBC suggests that the bloom is very much off the rose. Fashioned as a letter from a disappointed dad to an misguided son, it blasts the tech world for its miscues over the past year, from frat-boy antics to a sometimes appalling lack of transparency.

In a sense, this shouldn’t be surprising. Silicon Valley is no longer a collection of swashbuckling upstarts battling corporate behemoths. Today, Apple, Alphabet, Amazon and Microsoft are the most valuable companies in the world. Younger firms, such as Facebook and Uber, have already become powerful forces in our lives.

Perhaps most of all, the digital revolution is now two decades old and it has become very hard to move the needle. Compared with the personal computer, the Internet and the smartphone, smart watches and talking assistants just don’t add that much value. To be truly useful, digital technology can’t stand alone, but must learn to empower industries in the physical world.

The New Energy Revolution

We mostly think about the cost of energy when we have to pay for gas at the pump or when the electric bill arrives, but it’s far more pervasive than that. The Institute for Energy Research estimates that it makes up 8% of the global economy, so roughly eight cents out of every dollar you spend goes to energy, which functions like a tax on your consumption.

Yet that will likely change over the next few decades. Renewables, like wind and solar, have already achieved grid parity in a number of places and costs are steadily decreasing. In fact, the US Department of Energy predicts that solar costs in 2030 will be half of what they are now. Experts expect that electric cars will become more efficient than gas powered ones around 2022.

The main bottleneck now is energy storage, both to power electric cars and to handle the intermittency issues on the grid. The current technology, lithium-ion, is still too expensive and is nearing its theoretical limits, so completely new battery chemistries need to be developed. Nevertheless, there seems to be significant progress here as well, with several prototypes in the testing stage.

Add it all up and it’s possible — even likely — that our energy will not only be much cleaner, but cost half as much by 2030, which is like giving everybody a tax cut of 4%. Also, because the burden of energy costs hit low-income people harder, it will also positively impact income inequality.

Tackling Crippling Healthcare Costs

One of the great achievements of the 20th century was modern medicine. A hundred years ago, we had no way to treat simple infections and even a scratch while working in your garden could turn deadly. Conditions like heart disease and cancer were basically untreatable. Once you got sick, there was little you could do except wait to die.

Improvements in health care changed all that. Life expectancy in developed countries soared from about 40 years in 1900 to almost 80 years today, while child mortality and health inequality decreased significantly. Better health also had other benefits that were somewhat counterintuitive, like a decline in the birthrate and a reduction of population growth in developed countries. 

However, modern medicine has also had some unintended consequences. When people live longer, they are more likely to get chronic conditions, like diabetes, cancer and Alzheimer’s, which are considerably more expensive to treat. Today, healthcare makes up 10% of global GDP — far more in the US — and costs are increasing significantly more than the general inflation rate.

Yet here again, there is cause for hope. New genomic techniques, CRISPR especially, are being used to treat cancer as well as hereditary diseases like hemophilia. This is still a very new area, so we’ve barely begun to scratch the surface, but it is already clear that there is great potential to improve outcomes while lowering costs.

Advancing Manufacturing

While many still think of manufacturing as an “old economy” business relegated to hollowed out rust belt towns and developing countries, in recent years it has been a hotbed of innovation. In fact, the Obama Administration set up a network of advanced manufacturing hubs to develop new techniques in a diverse number of areas, from fabrics to photonics.

One rapidly developing technology is low-cost collaborative robots. Unlike traditional robots, which need to be set away from workers in cages, these are intelligent enough to work alongside humans safely and easy enough to use that they can be reprogrammed in minutes. They mostly do mundane tasks, like loading objects onto a conveyor belt, which frees up workers to do higher level jobs.

Probably the most exciting area is developing advanced materials. For example, the new 787 Dreamliner, which because it uses far more advanced composite materials, is 20% more efficient than its predecessor while achieving similar performance. Consider that the airline industry uses tens of billions of dollars worth of fuel each year, and that really adds up.

In the future, we can expect the cost of developing new materials to come down significantly. One company, Citrine Informatics, applies advanced machine learning algorithms materials databases in order to find valuable new compounds much faster and cheaper. It already enabled firms to develop new materials 2-5 times faster and that should improve in time.

Manufacturing still makes up 17% of the global economy, so even a small improvement is worth a lot.

A Fundamentally Different Kind Of Innovation

Over the past few decades, we’ve come to see innovation as what happens when someone like Steve Jobs stands on stage and shows off a new device. Clearly, advances in energy, healthcare and manufacturing are not that. However, the potential impacts in these areas are far greater than the typical Silicon Valley gadget.

The OECD estimates that information and communication technologies contribute about 6% to the economies in developing countries — and probably far less than that in the world as a whole. Now compare that to energy, healthcare and manufacturing, which make up about a third of global GDP, and it becomes clear how much potential there is.

Yet none of this can be achieved without digital technology, which can empower the industries of the future. As IBM’s Angel Diaz put it to me, “today we need more than just clever code. We need computer scientists working with cancer scientists, with climate scientists and with experts in many other fields to tackle grand challenges and make large impacts on the world.”

We’re entering a new era of innovation in which collaboration will be the new competitive advantage. The days when the digital world could stand alone in blissful ignorance of how the rest of the world does business are clearly waning.

You Are Worth Less than Elon Musk, but Are You Worthless? Why We Need to Change the Way We Value Humans

One vision of the future says that there will be no jobs, and if we’re lucky Elon Musk will give favor to us mere mortals and we’ll join him on his spaceship to Mars.

Of course, there is a possibility that Elon can’t save us, and the world ends up looking more like Mad Max: Fury Road.

A second vision of the future says that this wave of automation is no different than prior periods of technological advancement. Yes, some jobs will be destroyed, but in the long run most of the people who want to find work will be able to do so, and the workers displaced by automation will find employment doing different jobs. In fact, these workers are lucky, because in theory the new jobs will be better than the old ones.

These future visions are comforting–even the Mad Max version. They are comforting because they operate under the premise that either we are all doomed, or none of us are doomed. If we are all doomed, we’ll be forced to figure out solutions. Everyone will have a vested interest in creating a society that works for everyone. If none of us are doomed, well…none of us are doomed.

But what if just some of us are doomed?

In his reporting on automation and retail workers, LinkedIn editor Chip Cutter notes that cashier and retail salesperson are the first and second most common jobs in America.

What do we do about the potential loss of 8 million low-skilled jobs?

Conventional economic theory has an answer.

That answer says jobs will be reallocated to some other sector of the economy, as they have been in the past. Low-skilled agricultural jobs were, over time, reabsorbed into other sectors of the economy once farming became mechanized.

In other words, in the long run, it will be okay.

However, for workers, families, and communities, the long run can turn out to be a very long run. Manufacturing workers displaced by technology–and to a lesser extent, trade–may never reenter the labor force. If they do, they often earn significantly less than they used to.

Why do we seem to have so little empathy for the actual people impacted by change?

It is true that in economic terms, some workers’ contributions are worth less than others. Though (for now) we are both flesh-and-blood human beings, my economic worth is much smaller than Elon Musk’s. But, as author and professor James Kwak argues, economics has increasingly become the lens through which we view all societal interactions and relationships.

In that world, it’s easy for “worth less” to become “worthless.” In fact, as I write this article, it is literally harder to type the words “worth less.” Autocorrect just doesn’t believe that worth less isn’t worthless.

Our economic model has become a societal model that says some people are worthless–as though what separates the type of people who spend their day in a corner office and the people who stand behind a cash register is pure intrinsic worth, conveniently ignoring that what you contribute to the economy has a lot to do with where you born, the color of your skin, or whether your parents went to college.

Automation and artificial intelligence won’t eliminate all jobs at once. They likely won’t even eliminate most jobs, and there will be new, higher-paying jobs that come with the automation revolution. The challenge of the automated future won’t be figuring out what to do when no one has a job. It will be figuring out how to do deal with millions of people who aren’t going to step out from behind a cash register or leave the cab of an 18-wheeler and become coders or programmers.

That isn’t an insurmountable challenge, and the first step doesn’t even need to be figuring out what jobs 8 million people will have.

The first step is recognizing that worth less is not the same thing as worthless.

Snap Needed Emotional Intelligence This Week but Didn’t Have Any

Snap, parent corporation of social network Snapchat, has faced a number of recent leaks about the business, including a new round of layoffs. But the company’s reaction, a threat to sue or imprison employees who might talk to the press, was the second time in a week the company showed a disturbing lack of emotional intelligence.

Snap has made some bad moves in the past, like the initial fight among the co-founders. Turning down $3 billion for an acquisition by Facebook and the fall stock plunge. But the biggest problem of late has been the attitudes toward employees that management clumsily communicated.

Patience is understandably running thing. Over the last six months, Snap has faced the following:

  • Expenses raced ahead of income, increasing fiscal pressures as user growth has not kept pace with expectations. (When Fortune writes, “Its first trick was making selfies disappear. Its latest is sending gargantuan piles of cash into the ether,” you know the coverage will be ugly.)
  • The company saw two big stock drops immediately after earnings announcements in August and November.
  • The current stock price of about $14 remains far below the $17 IPO figure.
  • Layoffs this week and October after a September restructuring suggest the level of problem and money pressures Snap faces.

Snap has been like a sieve for insider news getting out to the press, which has made the company irate, as reported by Cheddar’s Alex Heath. This resulted in a harsh memo that in part said the following:

As a result, all employees must keep our information strictly confidential until disclosed by Snap. We have a zero-tolerance policy for those who leak Snap Inc. confidential information. This applies to outright leaks and any informal “off the record” conversations with reporters, as well as any confidential information you let slip to people who are not authorized to know that information.

If you leak Snap Inc. information, you will lose your job and we will pursue any and all legal remedies against you. And that’s just the start. You can face personal financial liability even if you yourself did not benefit from the leaked information. The government, our investors, and other third parties can also seek their own remedies against you for what you disclosed. The government can even put you in jail.

Not that anyone should minimize the need for a basic level of confidentiality. Leaking information from a public company, particularly if some people have a chance to trade on the insights before others do, can be a significant legal risk. But there are different ways to communicate, and Snap management opted for as heavy-handed a one as might be imagined. If they wished an effective deterrent, internal training and emphasis would have been far more effective.

Instead, this move is almost guaranteed to scare employees not into knowing compliance with right actions but further into psychological bunkers and out of the company as soon as possible.

What can you expect when a culture of secrecy reportedly makes many employees feel isolated and in danger? This is like entrepreneurs who are so intent on protecting their “brilliant” ideas that they never learn how limited or flawed the concepts are because they won’t listen. If you regularly divide employees, you miss the communication and collaboration necessary for innovation and solving problems.

And speaking of innovation, as the hammer comes down in this way, it also strikes in another. In the memo released at the time of the most recent layoffs, via Cheddar, CEO Evan Spiegel discussed the need to create a “highly scalable business model” and an “organization that scales internally.” He wrote, “This means that we must become exponentially more productive as we add additional resources and team members.”

To many, that translates as “your life should be ours.” There is only so productive people can be. They aren’t machines, and if you continually expect more and more, even with additional tools and resources (but likely not), you burn people out. That may work if you think everyone but yourself is replaceable and you want to use individuals as tools to make money — but, on second thought, no, it probably won’t. Some have pulled it off, but far more often these attitudes have limited success at most.

Then that memo ended as follows:

Lastly, I’d like to make it very clear that our team is not here to win 2nd place. The journey is long, the work is hard, but we have and we will consistently, systematically, out-innovate our competitors with substantially few resources and in far less time. And we will have a blast doing it.

Put differently: You won’t have the resources you need but you will succeed and work faster and harder because you are order to, and you will enjoy the process whether you want to or not.

The communications style of Snap in these two instances betrays a remarkable degree of emotional tone deafness. Even though the people responsible are likely sure they are motivating employees while helping select for the types of people who will do well by them, they transmit subtexts that are off-putting to many who could be of immense help but are unwilling to submerge themselves into the drive to enhance the financial well being of a tiny group.

The people at Snap could have avoided the problem with a few steps:

  • Clarify and be honest with yourself about what you really want to achieve. Have someone from the outside look at materials, interview people, and offer a disinterested observation of the situation.
  • Look at things from an employee’s viewpoint and put yourself in their shoes. Given the general atmosphere, if you heard this as an employee, how might you react?
  • Recognize that how you feel personally and what you want to accomplish may not work well together. Focus on approaches most likely to produce the needed results, not something that makes you feel vindicated.
  • Get expert help. If you pride yourself on an engineering culture, as Snap seems to, don’t assume you’re also a master of psychology and motivation. Chances are that you aren’t.

How to Make People Care About Your Brand

People don’t choose to buy from your brand on a whim. There’s always a reason behind their decisions, and uncovering that reason is key to gaining a brand following and growing your business.

According to the American Marketing Association, the average consumer sees up to 10,000 brand messages a day. But out of those 10,000 opportunities, the consumer will only buy from a select few brands. So how do you ensure yours stands out in the sea of brand messages? In his book “Youtility,” marketing consultant Jay Baer says, “You can’t survive by shouting the loudest and relying solely on anachronistic interruption marketing. You can’t proclaim you’re featuring the ‘biggest sale ever!’ every day.”

Promoting your brand anywhere and everywhere just doesn’t work. You need to focus on building relationships with key consumers who will be interested in what your brand has to offer. Here are three ways to make your target consumers care about your brand.

1. Focus on your audience

You could have the greatest product in the world, but if no one cares about it, you won’t sell anything. Before you even thinking of marketing or selling, you need to first think of your customers. Who is it that you’re trying to reach and what do they want?

Do some research and delve into demographics like age, sex and occupation. Then, go deeper. Uncover your audience’s pain points and their needs. Paint a picture of what your target consumer is like. Instead of thinking about marketing to a mass of people, think about how you can market to that one person.

Once you have an idea of what your target consumer is like, figure out where your product or service fits in. What problems can you solve for the consumer? When you can find the crossover between what your customers want and what your brand provides, you’ve struck gold.

In a speech at Content Marketing World 2013, Jonathan Lister, VP of sales solutions at LinkedIn, said, “As marketers, we should be changing the mantra from always be closing to always be helping.”

Consumers today are savvier than ever, and they’re skeptical of brands that are overly promotional. Instead, they favor brands that focus on being helpful and offering value. When marketing your brand, try not to oversell or use too much promotional language. Instead, frame your marketing in a way that shows how your product or service helps the consumer and how it will improve their lives for the better.

2. Don’t be afraid to be controversial

When you’re trying to get people to like and care about your brand, saying something controversial is probably the last thing you think you should do. And while it’s true that you shouldn’t be offensive or stir up trouble, sharing an opinion can actually make more people identify with your brand and like you.

That’s because trying to get everyone to like you doesn’t work. But that’s okay, because not everyone is the right customer for your brand. And if you never share an opinion or choose a side, you may not make anyone dislike you, but you probably won’t get anyone to like you, either.

Sharing your opinion reveals your brand’s values and allows your audience either to agree or disagree with you. In this way, you find your true audience, the ones who will advocate for and believe in your brand.

In his book, “Pour Your Heart Into It,” former Starbucks CEO Howard Schultz writes, “Mass advertising can help build brands, but authenticity is what makes them last. If people believe they share values with a company, they will stay loyal to the brand.”

Don’t hold back on sharing your opinions and potentially being controversial. You may lose a few people who disagree with you, but the ones who agree with you will end up liking you more.

3. Be human

A brand is impersonal. It’s an abstract entity, a logo, a tagline. So how can you expect your audience to care about it?

To get people to like your brand, you need to be more personal – more human. People like people, and they want to know that there is a human person behind the brand they’re following, not just a corporation.

In your content and other marketing, be conversational and engaging. Write as though as you are talking to a friend. You also need to engage with your consumers and grow your following. Start conversations online and respond to any comments. If your customers have any questions or problems, be proactive with your customer service. If you want people to care about your brand, you need to care about them back.

In his book, “The Thank You Economy,” entrepreneur Gary Vaynerchuk says, “A strategy of caring usually out-shines tactics, but when they’re used with the right intent, tactics can help a brand achieve greatness.”

Although it’s quickly becoming cliche, authenticity is an important part of gaining a brand following. A study by Bonfire Marketing revealed 91% of consumers want the brands they follow to be authentic in their posts.

To be authentic, you need to first define your brand values. What does your brand stand for and what are those values? Then, in all of your marketing efforts, make sure your brand voice is aligned with those values.

Authenticity will inspire trust, and if your audience trusts your brand, they will buy from your brand.

Why should people care about your brand? What do you have to offer your consumers? How can you relay the message in your marketing? Share your thoughts in the comments below:

You Love Listening To Fleetwood Mac? Science Says This May Say Something Unexpected About You

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek.

Admit it. 

When no one’s around, your favorite Spotify playlists bathe your soul like a week-long yoga retreat.

Everyone things you’re up with your electronica and down with your rap. 

The truth, however, is that your true loves involve bastions of musical history such as Air Supply, Toto, Chicago, Bryan Adams and, oh, Fleetwood Mac.

Now science would like to whisper into your ear and tell you what this really means.

Researchers from Nagasaki in Japan believe that your musical choices reflect your biological makeup.

As the New Scientists details, talked 76 male and female subjects into being subjected to various sorts of music, but not famous tunes.

Then they asked them which tunes they liked best. 

Oh, and they asked them for a little saliva, too. 

Which was convenient, since they were interested in their testosterone levels.

What they found was that males with higher testosterone preferred music of an “unsophisticated” sort. 

Like soft rock or heavy metal.

I find myself lurching toward these researchers like Ozzie Osbourne once lurched toward a bat.

How dare they suggest that Fleetwood Mac and its ilk aren’t sophisticated?

And the mere suggestion that Black Sabbath, Deep Purple, Nazareth and Uriah Heep are somehow beneath the levels of, say jazz or classical music is offensive to my core.

But that could be just my testosterone talking.

The researchers admitted that they didn’t yet know how testosterone influences musical tastes, though they suspect it may have something to do with testosterone having an effect on regions of the brain that process emotions. 

They did declare, however, that their work showed that men with lower testosterone did prefer classical music and jazz.

There was, though, no link between the level of testosterone in women and their love of, say, Lionel Richie. 

Still, the next time you’re at work and you happen to overhear one of your colleagues humming Go Your Own WayHold The Line or some other classic of its genre, please resist your critical bent.

It could just be their testosterone playing them like a fiddle.

What Will Strong Nerf Sales on Amazon Mean for Hasbro?

On this episode of Industry Focus: Technology, Dylan Lewis is joined by contributor Danny Vena to discuss Hasbro‘s (NASDAQ: HAS) call-out in‘s (NASDAQ: AMZN) holiday press release and what that could mean for the company’s financial results.

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A full transcript follows the video.

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This video was recorded on Jan. 12, 2018.

Dylan Lewis: A company where maybe the impact is a little more questionable, Hasbro. This is one of the biggest companies in the toy and game space. We bring them up because the best-selling toy and game item in the United States per Amazon was the Nerf N-Strike Elite Strongarm blaster. This is a product, Danny, that I am extremely familiar with, because a lot of Fools wield this model around HQ. So, I’m used to being shot with this thing.

Danny Vena: I’m not surprised you would be a target.

Lewis: [laughs] You know, I don’t appreciate that. But, no, it’s true, it’s very true. People seem to love this. It’s a fairly simple little Nerf gun, it’s not one of those humongous rifle guns. I think they’re about $13 or something like that. You look at a company like Hasbro, and with this announcement, they’re a company that’s kind of in need of some good news.

Vena: Right. If you go back to the last quarter, the backdrop for all of the toy and game industry was the bankruptcy of Toys R Us and the amount of money like big players like Hasbro and Mattel had on the books with Toys R Us when they filed bankruptcy. There was some question whether or not these players would continue to supply Toys R Us with products going into the all-important holiday season. There were negotiations, they got those out of the way. But one of the things Hasbro management made a point to bring up was, there were other avenues where Hasbro sold toys. It was not limited to what was going to be sold at Toys R Us. This is just a good example of the other avenues that management was talking about. They sold a significant number of toys on Amazon, and one of their franchise products, the Nerf, was the biggest-selling toy on Amazon’s website.

Lewis: To look at this on a quarter-to-quarter basis and understanding what this news item might mean for company sales, this is more important from a broad strategy perspective than a distribution perspective long-term, than it will be for maybe the immediate results for this business as we look to their next earnings call. You mentioned before, this is one of their franchise brands, and Nerf falls into that category with other lines like My Little Pony, Transformers, Monopoly. Overall, that segment makes up just under 50% of the company’s top line. Nerf is a very strong performer in that segment. It’s posted double-digit growth, which has outpaced the 7% growth for the segment. But, because there are so many other brands in that portfolio, it’s not going to be big enough to dramatically move their overall business.

Vena: Again, this is one that’s probably not going to move the needle. Better as an indicator to look at, Hasbro was not necessarily held hostage to the situation that was going on at Toys R Us, and certainly they’re going to continue to grow whether or not they have the same type of growth that they would have seen if Toys R Us hadn’t had those problems. We’ll find that out when Hasbro releases their earnings. But in the meantime, it’s just an indicator that toys were still being sold over the holidays.

Lewis: A shocker. If you’re looking for a segment to watch with Hasbro, I would look at their Hasbro gaming segment. They’re posting 20% year-over-year growth. It’s on a much smaller base. I think they’re around $280 million in revenue as of the most recent quarter. That’s really not all that surprising. We look at what’s going on in the entertainment, toy, game space for younger kids, and it’s increasingly digital. It’s starting to look more and more like video games, mobile apps, things like that. The company is getting there. But I think it’s something that they need to make happen. It’s nice to see that this has some traction for them, because it seems to me like the age window for those classic toys is shrinking and getting smaller and smaller. Kids want to be on iPads, kids want to be on consoles and phones.

Vena: There are a lot of industries that are being disrupted by the onset of mobile devices. I think for Hasbro, they’re better positioned going forward than many of their industry competitors for several reasons. They do have some of the most well-known brands, and they’re working on ways for kids to interact with those brands. They have digital games for kids to download onto their devices. They also have used a lot of these brands, like Transformers, in the movie business, just to keep them front of mind with the public. Maybe some of them have been not as successful as others. Transformers is obviously the big one, My Little Pony is another one, where the studio has put out stuff that has resonated with the fans. You had some others that were flops. But, Hasbro has an integrated strategy for international sales, omni-channel sales, keeping the products in front of the public’s eyes with studio productions. I think they’re less going to be a victim of disruption than some of the other players, but that’s always something to keep in mind.

Lewis: Listeners, I hope no one lets Vince know that I stole a CG company for this last one that we’re talking about here with Hasbro.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Danny Vena owns shares of Amazon, Hasbro, and Mattel. Dylan Lewis owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and Hasbro. The Motley Fool has a disclosure policy.

Geysers yes, Ellis Island no: Some US parks open, some not

Visitors could still ride snowmobiles and ski into Yellowstone National Park Saturday to marvel at the geysers and buffalo herds, despite the federal government shutdown.

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But across the country in New York, the nation’s most famous monuments to immigration — the Statue of Liberty and Ellis Island — were closed.

The Interior Department had vowed to keep open as many parks, monuments and public lands as possible during the shutdown, which began at midnight Friday on the East Coast.

By mid-day Saturday, the pattern was spotty, and some visitors were frustrated.

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“My initial reaction is, they really kind of screwed up our day. We had a great day planned,” said Dan O’Meara, a California firefighter who wanted to visit the Statue of Liberty and Ellis Island.

“But the next thing is, you know — it’s troubling that the people we voted in are not doing the job that they’re supposed to be doing. So, it’s very frustrating,” he said.

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In Yellowstone, cross-country skier Carol Weaver was unhappy with lawmakers, even though the park was open for her and nine friends who planned a two-day visit.

Weaver, from Bozeman, Montana, worried about what would happen if the impasse is lengthy.

“This is our public land, and we should be able to use it any time we want,” she said. “Congress better get its act together. They’ve been so irresponsible the last year, as well as the White House.”

Yellowstone had 2 inches of fresh snow on Saturday and temperatures were in the teens. Visitor centers and other facilities run by the National Park Service were closed, but privately operated hotels, tour services and gift shops were open.

Xanterra Parks Resorts and other private companies that serve visitors at Yellowstone said they would groom the park’s snow-packed roads for up to a week to keep them open for snowmobiles and snow coaches — small buses with tank-like tracks.

In Philadelphia, the Liberty Bell and Independence Hall — where the Declaration of Independence and the Constitution were signed — were closed.

Gaetana Dimauro of Adelaide, Australia, wasn’t aware of the government shutdown when she went to see the Liberty Bell.

“That’s bad though,” she said. “I never heard of that before.”

In Boston, the USS Constitution, the 220-year-old warship anchored at Charlestown Navy Yard, was open to visitors. But the site of the Revolutionary War Battle of Bunker Hill was closed.

In New Mexico, parts of Bandelier National Monument’s cliff dwellings and fragile archaeological sites were off-limits to protect them from damage, but the entrance road and some trails were open.

Rocky Mountain National Park in Colorado and Yosemite National Park in California were open, but few Park Service staff were available to help visitors.

A storm moving into Colorado Saturday was expected to drop up to 18 inches of snow, and Rocky Mountain National Park spokeswoman Kyle Patterson said crews would not plow the roads.

The John F. Kennedy Presidential Library and Museum in Boston was closed, as were exhibits at the Clinton Presidential Center in Little Rock, Arkansas.


Elliott reported from Denver. Associated Press writers Paul Davenport in Phoenix; Anthony Izaguirre in Philadelphia; Robert Jablon in Los Angeles; Ken A. Miller in Oklahoma City; Bob Salsberg in Boston and Julie Walker in New York contributed to this report.

What’s the Deadline to File Taxes in 2018?

Taxes have certainly been hogging the news lately, especially in light of the recent changes that were implemented for 2018. But before we focus our attention toward the current year’s taxes, let’s not forget the little matter of tackling our 2017 returns. As you’re probably aware, those returns are due in mid-April, though their exact due date might surprise you.

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Without further ado, the deadline to file a return for the 2017 tax year is April 17, 2018. Why not April 15, as usual? Because when the 15th falls on a Sunday, the due date for returns is pushed to the following Monday. But since that Monday is Emancipation Day, a legal holiday in Washington, D.C., the rest of the country gets an extra 24 hours of leeway.

That said, the IRS will begin accepting returns as early as January 29, so it pays to get your taxes in ahead of schedule. Doing so will help you avoid late-payment penalties if you owe money, and will also push up your refund date if the IRS owes you a chunk of cash.

Get a head start on your 2017 taxes

Each year, countless tax filers wait until the very last minute to start tackling their returns — so don’t be one of them this time around. Now that you’re aware of the April 17 deadline, you can take steps to gather your paperwork and receipts so that you’re prepared to file your return ahead of schedule.

What sort of information will you need to file your taxes? If you’re a salaried worker, you’ll need your W-2, which summarizes your wages and tax payments for the year. If you’re self-employed, you’ll need a 1099 from each company you worked for. Keep in mind that the requirement to issue a 1099 is waived for earnings under $600, so if you did small projects for a number of clients, you may not get anything in the mail — but you’re still obligated to report those earnings, nonetheless.

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In addition to the aforementioned forms, it also pays to gather information on the following well in advance of the April 17 deadline:

  • Interest income, dividend income, or capital gains you received in 2017.
  • Mortgage interest you paid last year.
  • Retirement plan contributions you made.
  • Healthcare costs you incurred.
  • Money or goods you donated to charity.
  • Childcare expenses you paid.

Whether you choose to itemize or claim the standard deduction on your 2017 taxes, you’ll need to report all investment income on your return. Furthermore, most of the above-listed data will be essential if you’re looking to itemize, so the more time you give yourself to compile it, the easier it will be to file your taxes.

Don’t procrastinate

Though April 17 might seem pretty far away, the tax-filing deadline has a way of sneaking up on people. And that could hurt you in a number of ways.

First, if you don’t leave yourself enough time to complete your return, you risk submitting one laden with errors. If this happens, your return might get audited, or outright rejected, and neither scenario is what you want.

Furthermore, if you find that you’ve underpaid your taxes for 2017, and therefore owe the IRS money, you could end up scrambling to come up with that cash if you wait until the last minute. Imagine you complete your return and realize you’re staring at a $1,200 tax bill. If you come upon that information on or around April 17 and don’t have the money in savings to cover that obligation, you’ll face late-payment penalties that can quickly add up. On the other hand, if you realize in, say, mid-February that you’re looking at an underpayment, you’ll have two solid months to scrounge up that cash, whether in the form of taking on extra shifts at work, or signing up for some freelance projects to cover your shortfall.

Another good reason not to procrastinate? If you’re due a refund, waiting until the last minute will only delay your cash. The IRS expects most refunds to go out within three weeks of receiving returns, provided you file electronically. Signing up for direct deposit could further expedite the process. This means that, in theory, you could be looking at your refund as early as February if you really get moving on your taxes. Wait until April 17, and you’re more likely to get your cash in May.

That said, if you’re claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit on your return, the soonest you can expect your refund is late February. That’s because the IRS is required to withhold refunds associated with these credits due to high levels of related fraud. But otherwise, the sooner you file, the sooner you can expect your cash.

Don’t miss the boat

If, despite knowing the tax-filing deadline well in advance, you still find yourself unprepared come April 17 of this year, you have the option to request a tax extension, which will buy you an extra six months to complete your return. An extension, however, won’t give you additional time to pay your tax bill if you owe money, so at the very least, you should have a rough estimate of what your return is going to look like by the time April 17 rolls around.

One final thing: Missing the April 17 deadline won’t just subject you to a late-filing penalty, but will also needlessly drag out the already-stressful process of filing a return in the first place. You’re better off getting your taxes over with in time and moving on with your life.

The $16,122 Social Security bonus most retirees completely overlook
If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,122 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

The Motley Fool has a disclosure policy.

4 Ways to Take Money From Your 401(k) or IRA Without Paying a Penalty

In an ideal world, everyone would leave their retirement savings untouched until they retired. However, we live in the real world, and sometimes you need to dip into your nest egg early. In fact, nearly a third of Americans who participate in a 401(k) plan have taken money out at some point before retirement, according to a 2014 study from financial services firm TIAA-CREF.

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The problem is that taking money from your 401(k) or traditional IRA can be costly. The IRS imposes a 10% early distribution penalty on money you withdraw before you reach age 59 1/2, and you’re also subject to income taxes on the money you take out (unless you’re withdrawing from a Roth 401(k) account). For small withdrawals, these costs may not be too burdensome. But if you need tens of thousands of dollars, the penalty alone can drain your bank account.

However, there are ways to take money from your tax-advantaged savings account without facing a penalty. The easiest is to simply wait until you turn 59 1/2, but if you don’t have that kind of time, there are other options.

Why withdrawing from your retirement savings should be a last resort

First, it’s important to note that while you can withdraw your funds from a 401(k) or IRA penalty-free, it doesn’t necessarily mean you should. Even if you withdraw a relatively small amount, it can have a significant impact on your long-term savings goals.

For example, let’s say you currently have $50,000 in your 401(k), you’re contributing $100 per month, and you’re earning a 7% annual rate of return on your investments. Here’s how withdrawing $5,000 from your 401(k) would affect your savings over time, assuming you continued to contribute $100 per month:

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In other words, that $5,000 withdrawal would cost you nearly $40,000 over 30 years, and that’s not including any penalties or income taxes you may need to pay.

That being said, if you’ve weighed all your options and decided you need to withdraw money from your 401(k) or IRA, there are a few situations in which the penalty is waived. Keep in mind that only the penalty is waived — not the income tax. However, avoiding the 10% fee can soften the blow to your wallet.

1. Buying your first house

If you’re buying your first house, you can withdraw up to $10,000 for a down payment without paying the 10% penalty. Unfortunately, 401(k) withdrawals are not eligible for penalty-free withdrawals for homebuyers, but you can withdraw money from an IRA without facing any fees.

With an IRA withdrawal, the maximum lifetime withdrawal limit for homebuyers is $10,000, and while you don’t necessarily have to be a first-time homebuyer, you cannot have owned a home during the last two years. If you don’t have an IRA, you can roll over money from a 401(k) into an IRA to get around the penalty. But because you can’t roll over funds from your current employer, it will need to be a 401(k) from a former employer.

If that’s not an option for you, you can borrow from your 401(k) instead. You can take a loan of up to $50,000 or half of the vested balance of your 401(k), whichever is less (unless half of the vested account balance totals less than $10,000, in which case you can borrow up to $10,000). Most employers require that you pay the loan back within five years, and if you leave your job before the loan is paid off, you’ll likely need to pay it in full within 60 to 90 days of leaving. Finally, you will need to pay interest on the loan, but that money is deposited back into your account.

2. Paying for certain medical expenses

Medical bills are costly, and not everything is covered by insurance. Fortunately, if you’re faced with a high bill that insurance won’t cover, you can use some of your 401(k) or IRA funds to pay for it penalty-free.

There’s a catch to this, though: The penalty is only waived for expenses that exceed 10% of your adjusted gross income and aren’t covered by insurance. In addition, you have to make the withdrawal in the same year that the medical expenses were incurred to avoid paying the 10% penalty.

3. Paying for health insurance premiums

Even if you’re unemployed, you shouldn’t forgo health insurance. The average cost of a routine adult physical examination is about $200 without insurance, according to Blue Cross Blue Shield, and more expensive medical expenses, such as an emergency room visit or MRI, can cost thousands.

After you’ve been unemployed for at least 12 weeks, you’re eligible to withdraw 401(k) or IRA funds penalty-free to pay for health insurance premiums. If you have a spouse or dependents, you can use those withdrawals to pay insurance premiums for them as well.

4. Paying for college

As with buying a home, 401(k) withdrawals used for college expenses are subject to the 10% penalty fee. However, in an IRA, there’s no penalty on distributions for qualified higher-education costs.

You can withdraw the full amount of your qualifying higher-education expenses from an IRA. The money doesn’t just have to go toward your own college costs, either; it can also cover the expenses of your spouse, child, or grandchild. Qualifying expenses include tuition, fees, books, supplies, room and board, and more.

Taking money from your retirement fund should never be your first resort, but it’s a possibility if you have no other options. While you’ll need to work a little harder to catch up on your savings after making a withdrawal, avoiding the 10% penalty can help ensure those withdrawals won’t derail your retirement goals.

The $16,122 Social Security bonus most retirees completely overlook
If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,122 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

The Motley Fool has a disclosure policy.