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Tag: Management Moves

  • Etsy’s stock is having its best day in seven months after Elliott takes ‘sizable’ stake

    Etsy’s stock is having its best day in seven months after Elliott takes ‘sizable’ stake

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    Investors bought up shares of Etsy Inc. on Thursday after the online crafts marketplace added to its board of directors a partner of hedge fund Elliott Investment Management L.P., which recently acquired a “sizable” stake in the company.

    Etsy
    ETSY,
    +9.31%

    said Marc Steinberg, who is responsible for public- and private-equity investments at Elliott, has been appointed to the board, effective Feb. 5, and will also join the board’s audit committee.

    “Etsy has a highly differentiated position in the e-commerce landscape and a uniquely attractive business model, supported by a distinctive and engaged community,” Steinberg said. “We became a sizable investor in Etsy and I am joining its board because I believe there is an opportunity for significant value creation.”

    Etsy’s stock shot up 8% in afternoon trading, to pare earlier gains of as much as 14.2%. The stock was headed for its best one-day gain since it climbed 9.2% on July 11.

    Elliott’s stake was acquired in recent months, as the fund’s disclosure of equity holdings through the third quarter did not list Etsy shares.

    “Marc’s appointment reflects our ongoing commitment to enhance the perspectives and expertise on the Etsy Board,” said Etsy Chairman Fred Wilson. “We look forward to benefiting from his voice in the boardroom as a seasoned and experienced investor as we continue our journey of creating a leading global e-commerce platform.”

    Etsy now has 10 board members.

    Etsy’s stock has run up 18.6% over the past three months, but has tumbled 48.5% over the past 12 months. That’s compared with the S&P 500 index’s
    SPX
    18.7% rally over the past year.

    Read (December 2023): Etsy to cut 11% of staff as CEO says company is on ‘unsustainable trajectory’

    At an investor conference in December, Chief Executive Josh Silverman said business has slowed since the post-pandemic boom, as people have “had enough of buying things” and are now spending primarily on eating out and travel. Inflation and the loss of government subsidies was also weighing on spending.

    Still, Silverman said, Etsy is now about two and a half times bigger than it was before the pandemic, and the company has more active buyers than it did at the peak of the pandemic.

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  • Even Cloudflare's CEO says that viral firing video is 'painful' — here's what went wrong

    Even Cloudflare's CEO says that viral firing video is 'painful' — here's what went wrong

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    A tech employee’s recording of the meeting firing her from a sales role at Cloudflare
    NET,
    -1.79%

    has spurred criticism of the company — and a broader conversation about the right way to let employees go.

    Viewers have called the roughly 10-minute TikTok video, which went viral this week, “sad” and a “disaster.” Even Cloudflare CEO Matthew Prince responded on X (formerly Twitter) that it was “painful for me to watch.”

    In the video captioned, “POV: You’re about to get laid off,” former Cloudflare account executive Brittany Pietsch logs into a virtual meeting with an HR representative and a director at the company, both of whom she says she’s never met before. In a caption, Pietsch writes that she assumed they were meeting to let her go, because she had heard from coworkers who had been axed already.

    In the video, the company reps say that Pietsch hadn’t met performance expectations, and that Cloudflare had decided to “part ways” with her. Pietsch’s response is what has pushed this clip to be shared all over social-media newsfeeds: She asks for an explanation for why she, specifically, is being let go by the company, particularly because she’s a new employee who hasn’t heard any negative feedback. She also asks why her manager isn’t a part of this termination meeting.

    “Every single one-on-one [meeting] I’ve had with my manager, every conversation I’ve had with him — he’s been giving me nothing but ‘I am doing a great job,’” she says during the meeting. “I’m just definitely very confused and would love an explanation that makes sense.” 

    The director, who can’t be seen in the video, says he “won’t be able to go into specifics” on Pietsch’s performance. 

    In a statement to MarketWatch, a Cloudflare spokesperson clarified that the company did not conduct layoffs, and is not engaged in a reduction of force. “When we do make the decision to part ways with an employee, we base the decision on a review of an employee’s ability to meet measurable performance targets,” the Cloudflare statement said. “We regularly review team members’ performance and let go of those who aren’t right for our team. There is nothing unique about that review process or the number of people we let go after performance review this quarter.”

    Pietsch did not immediately respond to a request for comment. 

    Company CEO Prince added on X, formerly known as Twitter, that the company fired 40 salespeople out of 1,500 in its go-to-market division. “That’s a normal quarter,” he wrote in his post. “When we’re doing performance management right, we can often tell within 3 months or less of a sales hire, even during the holidays, whether they’re going to be successful or not.” 

    But he also added: “We try to fire perfectly. In this case, clearly we were far from perfect. The video is painful for me to watch. Managers should always be involved. HR should be involved, but it shouldn’t be outsourced to them … We don’t always get it right.”

    Many viewers seem to agree, as the video has drawn close to 200,000 views on TikTok and millions of views on X, along with going viral on Reddit.

    “Total disaster on both sides,” lawyer Eric Pacifici said. 

    “Totally unfair to her,” wrote Austen Allred, CEO of the online-coding bootcamp Bloom Institute of Technology. “Pretty sad across the board.” 

    On LinkedIn, Pietsch gave her own response to the social-media uproar. She said that her manager was unaware that she was being let go, and that she asked questions during the meeting not to try and save her job, but rather to get greater clarity on why she had been singled out for termination. 

    “I’ll never be able to wrap my mind around it,” she wrote in the post. “We as employees are expected to give 2 weeks notice and yet we don’t deserve even a sliver of respect when the roles are reversed?”

    What’s the right way to fire an employee? 

    It’s never easy to part ways with an employee, according to Molly, a human-resources consultant who runs the TikTok account HR Molly, which has 80,000 followers. She asked only to be identified by her first name for privacy reasons. 

    But that being said, it’s very important to treat affected employees with respect. That can include sharing as much information as possible about why the decision is being made. 

    “I tell people that even if you catch someone stealing, even that termination meeting should have a level of decency,” she said. “It seems like there’s a significant consensus that the meeting [in the viral video] lacked some dignity.”

    It’s also important to understand these kinds of conversations will be difficult for an employee no matter what, Molly added. 

    “We know this impacts people and we know this is emotional and that it’s harmful. How can we do it in a way that creates the least amount of additional harm?” she said, noting that she picked up the concept from fellow TikTok creator and diversity consultant Ciarra Jones. “Companies need to prioritize the well-being of the employee that’s impacted.” 

    As for recording your layoff or firing meeting — that can be risky, Molly said, and downright illegal in states that require you to receive consent before doing so.

    But companies and HR professionals would be wise to remind themselves that, in this day and age, it can happen, she said. And if a camera or tape recorder would change the way you handle an interaction, it’s a good sign to reevaluate.

    According to its company website, Cloudflare has dozens of job postings for open positions across the company, including sales roles.

    In her LinkedIn post, Pietsch said that she’s not very concerned about any backlash over the video that might impede her chances of getting another job. 

    “Any company that wouldn’t want to hire me because I shared a video of how a company fired me or because I asked questions as to why I was being let go is not a company I would ever want to work for anyway,” she wrote.

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  • Why Sam Altman is a no-brainer for Time’s ‘Person of the Year’

    Why Sam Altman is a no-brainer for Time’s ‘Person of the Year’

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    Nothing has changed our lives more this year than the advances made in artificial intelligence — and they have the potential to alter our lives in even more dramatic ways down the road.

    So it’s a no-brainer that Sam Altman, co-founder and recently returned chief executive of the once-little-known OpenAI, should be named “Person of the Year” by Time Magazine when the selection is announced Wednesday.

    Altman has already cracked Time’s shortlist, joining candidates from varied backgrounds, including world leaders like Xi Jinping and entertainment phenomenon Taylor Swift. The selection ultimately comes down to an “individual or group who most shaped the previous 12 months, for better or for worse.”

    But Time has often given “agents of change” its yearly honor — just look at 2021 winner Elon Musk — and Altman certainly fits that bill.

    No other innovation in the past year has had an impact in such disparate realms. OpenAI publicly launched its ChatGPT chatbot late last year, and as the technology grew viral in 2023, it upended the stock market, Silicon Valley and companies that wouldn’t normally be classified as technology businesses. The ensuing product development and surge in generative AI investment revitalized a tech industry that had sunk into the doldrums amid a pandemic hangover.

    Admittedly, it will take time for companies to realize the true financial benefits of AI: Nvidia Corp.
    NVDA,
    -2.68%

    is among the few to generate serious money from the frenzy so far. But market researcher IDC predicted that global spending on AI, including software, hardware and services for AI-centric systems will reach $154 billion this year, up 27% from a year ago. That total could zoom above $300 billion by 2026.

    Also read: One year after its launch, ChatGPT has succeeded in igniting a new era in tech

    And AI isn’t only impacting the corporate world. The technology is already affecting our daily lives, and it will have even deeper effects going forward. Chatbots are getting smarter on websites, facilitating better customer service. They’re starting to alter the workplace as well, spitting out mostly coherent marketing copy, research and even, gasp, news articles — albeit with plenty of errors.

    At first, ChatGPT seemed like a fun way to kill time or get homework help, but the chatbot and its ilk will seriously alter the working world, helping to eliminate perhaps millions of jobs. Morgan Stanley recently predicted that more than 40% of occupations will be affected by generative AI in the next three years.

    Altman himself has been the face of OpenAI in the past year. He’s talked up the technology, but he also appeared at congressional hearings in May to discuss potential regulation of AI, testifying that “if this technology goes wrong, it can go quite wrong.” His recent firing and quick rehiring by OpenAI and its small, nonprofit board late last month fueled a veritable media storm before the Thanksgiving holiday in the U.S.

    Time chooses its persons of the year for their impact, not because they’re saints. And Altman’s own story is not without controversy. The recent brouhaha over his leadership of OpenAI is believed to have been caused by a deep schism over the ethics of AI development. The board seemingly wanted more guardrails and precautions, and feared that rushed development could irrevocably doom mankind.

    Read in the Wall Street Journal: How effective altruism split Silicon Valley and fueled the blowup at OpenAI

    Altman, who also wooed Microsoft Corp.
    MSFT,
    -1.43%

    to become an investor in OpenAI, emerged the victor in the upheaval with his own company’s altruistic board. Had Altman truly been fired from OpenAI, Microsoft was planning to hire him, and nearly every employee at OpenAI was ready to quit and follow him there. While OpenAI faces plenty of competition, including from Alphabet Inc.’s
    GOOG,
    -2.02%

    GOOGL,
    -1.96%

    Google, Altman should continue to be the face of AI development, for good and for bad, even as he has advocated industry regulation.

    The debut and influence of ChatGPT and follow-on AI products are having the biggest impact on tech development since the invention of the iPhone. Altman is at the center of it and leading the charge. Whether he can keep the lid on Pandora’s Box or not depends on many factors, but he and the company he leads are clearly driving a new tech movement that affects us all, whether we like it or not.

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  • Sam Altman to return as OpenAI CEO, alongside new board that includes Larry Summers

    Sam Altman to return as OpenAI CEO, alongside new board that includes Larry Summers

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    OpenAI has reached an “agreement in principle” for Sam Altman to return to his post as chief executive officer alongside a new board, just days after his ousting, the company said on Wednesday.

    In a posting on X, the tech group behind ChatGPT said former Salesforce CEO Bret Taylor will serve as chair, joined on the board by former Treasury Secretary Larry Summers and Quora co-founder and CEO and current director Adam D’Angelo.

    The…

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  • Sam Altman to Join Microsoft Following OpenAI Ouster

    Sam Altman to Join Microsoft Following OpenAI Ouster

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    Updated Nov. 20, 2023 6:34 am ET

    SAN FRANCISCO—Microsoft said it is hiring Sam Altman to helm a new advanced artificial-intelligence research team, after his bid to return to OpenAI fell apart Sunday with the board that fired him declining to agree to the proposed terms of his reinstatement.

    Microsoft Chief Executive Satya Nadella posted on X (formerly Twitter) late Sunday that Altman and Greg Brockman, OpenAI’s president and co-founder who resigned Friday in protest over Altman’s ouster, will lead its team alongside unspecified colleagues. Nadella said Microsoft was committed to its partnership with OpenAI and that it would move quickly to provide Altman and Brockman with “the resources needed for their success.” 

    Copyright ©2023 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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  • Cruise co-founder and CEO Kyle Vogt resigns from robotaxi company

    Cruise co-founder and CEO Kyle Vogt resigns from robotaxi company

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    Kyle Vogt resigned as chief executive of autonomous-vehicle company Cruise late Sunday, following the recent suspension of Cruise’s operations on public roads.

    “Today I resigned from my position as CEO of Cruise,” Vogt, who co-founded Cruise and oversaw its 2016 acquisition by General Motors Co. GM, tweeted Sunday night. “The last 10 years have been amazing, and I’m grateful to everyone who helped Cruise along the way.”

    He…

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  • Sam Altman Is Fired as OpenAI CEO

    Sam Altman Is Fired as OpenAI CEO

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    OpenAI announced Friday afternoon that CEO Sam Altman has departed External link the company, saying the executive “was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities.”

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  • OpenAI CEO Sam Altman steps down as board loses confidence in his leadership

    OpenAI CEO Sam Altman steps down as board loses confidence in his leadership

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    OpenAI said Friday that Sam Altman is no longer its chief executive, with the ChatGPT parent adding that said Altman had not been “consistently candid in his communications with the board.”

    “The board no longer has confidence in his ability to continue leading OpenAI,” the company said in a blog post.

    In a tweet Friday, Altman said he “will…

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  • Groupon’s stock craters after earnings as CEO says business ‘continues to be challenged’

    Groupon’s stock craters after earnings as CEO says business ‘continues to be challenged’

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    Groupon Inc. shares were tumbling more than 20% in Thursday’s extended session after the discounting marketplace announced a new rights offering and acknowledged “challenged” business conditions.

    The company said in a Thursday afternoon release that its board approved an $80 million fully backstopped rights offering to all holders of its common stock. The rights offering will occur through the distribution of nontransferable subscription rights to purchase common stock at a price of $11.30 a share.

    Groupon
    GRPN,
    -2.73%

    also posted third-quarter results, showing revenue down to $126.5 million from $144.4 million a year prior and slightly below the $129.7 million FactSet consensus, which is based on estimates from three analysts.

    The company logged a net loss of $41.4 million, or $1.31 a share, compared with a loss of $56.2 million, or $1.86 a share, in the year-earlier period.

    “We are turning our focus to delivering projects across product, engineering, sales, marketing and revenue management that we expect will reinvigorate our marketplace and position our business to return to growth,” interim CEO Dusan Senkypl said in a release.

    Added Senkypl: “While we did not make as much progress on key projects as I expected and our business continues to be challenged, I am pleased to see sequential improvement in our financial performance, Local Billings return to growth, and our plan to strengthen our liquidity position.”

    In addition, co-founder Eric Lefkofsky plans to leave Groupon’s board of directors, according to Thursday’s release. “With a new management team and the announcement of today’s financing strategy, I am confident that Groupon is on the right track to become the ultimate destination for experiences and services,” Lefkofsky said.

    Groupon’s stock is up 58% so far this year but off 97% from its 2011 all-time high.

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  • Morgan Stanley names Ted Pick its next CEO

    Morgan Stanley names Ted Pick its next CEO

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    Morgan Stanley said late Wednesday that Co-President Edward “Ted” Pick will become its chief executive, effective Jan. 1.

    Outgoing Chief Executive James Gorman will become executive chairman, Morgan Stanley said. Pick will also join the firm’s board of directors.

    “The board has unanimously determined that Ted Pick is the right person to lead Morgan Stanley and build on the success the firm has achieved under James Gorman’s exceptional leadership,” the company said in a statement.

    “Ted is a strategic leader with a strong track record of building and growing our client franchise, developing and retaining talent, allocating capital with sound risk management, and carrying forward our culture and values,” it said.

    Gorman had announced his intention to step down in May, setting off a “Sucession”-like run for the top job at the investment bank.

    Pick’s name had been among those in the running. The executive joined Morgan Stanley in 1990, and was promoted to managing director in 2002, according to his bio on the company’s website.

    Gorman became CEO in January 2010, having joined the firm in 2006.

    The lack of a clear successor at Morgan Stanley has weighed on its stock lately.

    The shares are down 24% in the last three months, three times the losses for the S&P 500 index
    SPX
    in the same period. So far this year, Morgan Stanley shares are down 16%, contrasting with an advance of about 9% for the S&P.

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  • Costco CEO Craig Jelinek to Step Down. Here’s the Plan.

    Costco CEO Craig Jelinek to Step Down. Here’s the Plan.

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    Costco CEO Craig Jelinek to Step Down. The Stock Is Down.

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  • Rite Aid is closing these 154 stores as part of its bankruptcy

    Rite Aid is closing these 154 stores as part of its bankruptcy

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    Rite Aid plans to shutter 154 stores, many of them in Pennsylvania and California, as part of its bankruptcy plans, according to an initial list of those closures published in court documents filed on Tuesday.

    That list was released Wednesday after the drugstore chain filed for chapter 11 bankruptcy protection in New Jersey over the weekend, amid billions in debt related to opioid lawsuits. The company at that time said it would “continue assessing its footprint and close additional underperforming stores” and announced the appointment of Jeffrey Stein as chief executive.

    Here are the store locations slated to close:

    California
    4044 Eagle Rock Boulevard, Los Angeles
    4046 South Centiela Avenue, Los Angeles
    7859 Firestone Boulevard, Downey
    4402 Atlantic Avenue, Long Beach
    935 North Hollywood Way, Burbank
    139 North Grand Avenue, Covina
    13905 Amar Road, La Puente
    920 East Valley Boulevard, Alhambra
    3813 Plaza Drive, Oceanside
    1670 Main Street, Ramona
    6505 Mission Gorge Road, San Diego
    8985 Mira Mesa Boulevard, San Diego
    25906 Newport Road, Menifee
    24829 Del Prado, Dana Point
    30222 Crown Valley Parkway, Laguna Niguel
    19701 Yorba Linda Boulevard, Yorba Linda
    1406 West Edinger Avenue, Santa Ana
    2738 East Thompson Boulevard, Ventura
    720 North Ventura Road, Oxnard
    20572 Homestead Road, Cupertino
    2620 El Camino Real, Santa Clara
    901 Soquel Avenue, Santa Cruz
    571 Bellevue Road, Atwater
    5409 Sunrise Boulevard, Citrus Heights
    1309 Fulton Avenue, Sacramento
    3029 Harbor Boulevard, Costa Mesa
    959 Crenshaw Boulevard, Los Angeles
    3000 South Archibald Avenue, Ontario
    15800 Imperial Highway, La Mirada
    8509 Irvine Center Drive, Irvine
    499 Alvarado Street, Monterey

    Connecticut
    289 Greenwood Avenue, Bethel

    Delaware
    25 Chestnut Hill Plaza, Newark
    3209 Kirkwood Highway, Wilmington

    Idaho
    1600 North Main Street, Meridian
    5005 West Overland Road, Boise

    Maryland
    5 Bel Air South Parkway, Suite 1347, Bel Air
    728 East Pulaski Highway, Elkton
    5624 Baltimore National Pike, Baltimore
    5804 Ritchie Highway, Baltimore
    7501 Ritchie Highway, Glen Burnie
    7967 Baltimore Annapolis Boulevard, Glen Burnie

    Massachusetts
    80 East Main Street, Webster

    Michigan
    924 West Main Street, Fremont
    507 North Lafayette Street, Greenville
    715 South Clinton Street, Grand Ledge
    15250 24 Mile Road, Macomb
    102 North Centerville Road, Sturgis
    47300 Pontiac Trail, Wixom
    35250 South Gratiot Avenue, Clinton Township
    51037 Van Dyke Avenue, Shelby Township
    3100 East Michigan Avenue, Jackson
    9155 Telegraph Road, Taylor
    1243 U.S. 31 South, Manistee
    29447 Ford Road, Garden City
    2838 East Court Street, Flint
    1900 East 8 Mile Road, Detroit
    36485 Garfield Road, Clinton Township
    25922 Middlebelt Road, Farmington Hills
    109 North Whittemore Street, St. Johns
    1124 North Ballenger Highway, Flint
    2701 South Cedar Street, Lansing

    New Hampshire
    420 Daniel Webster Highway, Merrimack

    New Jersey
    4057 Asbury Avenue Suite 8, Tinton Falls
    431 Haledon Avenue, Haledon
    35 Mill Road, Irvington
    1636 Route 38 Suite 49, Lumberton
    773 Hamilton Street, Somerset
    1434 South Black Horse Pike, Williamstown
    3 Marshall Hill Road West, Milford
    210 Bridgeton Pike, Mantua
    108 Swedesboro Road Suite 20, Mullica Hill
    2370 Route 33, Robbinsville
    1726 Route 37, East Toms River
    86 B Lacey Road, Whiting

    New York
    2887 Harlem Road, Cheektowaga
    2002 Avenue U, Brooklyn
    2 Whitney Avenue, Floral Park
    71-18 Kissena Boulevard, Flushing
    3131 Hempstead Turnpike, Levittown
    2981 Ocean Avenue, Brooklyn
    3199 Long Beach Road, Oceanside
    198 West Merrick Road, Valley Stream
    836 Sunrise Highway, Bay Shore
    2784 Sunrise Highway, Bellmore
    901 Merrick Road, Copiague
    577 Larkfield Road, East Northport
    695 East Jericho Turnpike, Huntington Station
    700-43 Patchogue-Yaphank Road, Medford
    273 Pine Hollow Road, Oyster Bay
    397 Sunrise Highway, West Patchogue
    593 Old Town Road, Port Jeff Station
    65 Route 111, Smithtown
    2453 Elmwood Avenue, Kenmore
    1567 Penfield Road, Rochester

    Ohio
    3129 Lincoln Way East, Massillon
    120 South Main Street, New Carlisle
    146 Woodman Drive, Dayton
    2701 Market Street, Youngstown
    401 West North Street, Springfield
    230 South Main Street, Bellefontaine

    Oregon
    2440 Southeast Cesar Chavez Boulevard, Portland

    Pennsylvania
    2715 Parade Street, Erie
    5612 North Fifth Street, Philadelphia
    350 Main Street, Pennsburg
    4011 Cottman Avenue, Philadelphia
    1441 Old York Road, Abington
    300 Market Street, Johnstown
    8716 New Falls Road, Levittown
    1750 Bustleton Avenue, Philadelphia
    169 West Lancaster Avenue, Ardmore
    1315 East Washington Lane, Philadelphia
    801 Wyoming Avenue Suite 9, West Pittston
    657 Heacock Road, Yardley
    2801 West Dauphin Street, Philadelphia
    1709 Liberty Street, Erie
    674 Route 196, Suite 14, Tobyhanna
    2722 West 9th Street, Chester
    950 East Baltimore Pike, Yeadon
    8235 Stenton Avenue, Philadelphia
    7941 Oxford Avenue, Philadelphia
    5440 Lansdowne Avenue, Philadelphia
    700 Stevenson Boulevard, New Kensington
    208 East Central Avenue, Titusville
    1080 South West End Boulevard, Quakertown
    136 North 63rd Street, Philadelphia
    351 Brighton Avenue, Rochester
    5235 Library Road, Bethel Park
    5990 University Boulevard Suite 30, Moon Township
    2501 Saw Mill Run Boulevard, Pittsburgh
    5410 Keeport Drive, Pittsburgh
    6090 Route 30, Greensburg
    4830 William Penn Highway, Export
    1730 Wilmington Road, New Castle
    2178 West Union Boulevard, Bethlehem
    1628 South Fourth Street, Allentown
    2401 East Venango Street, Philadelphia
    6327-43 Torresdale Avenue, Philadelphia
    200 West Ridge Avenue Suite 112, Conshohocken
    301 Eisenhower Drive, Hanover
    7036 Wertzville Road, Mechanicsburg

    Virginia
    833 North Battlefield Blvd, Chesapeake
    1458 Mount Pleasant Road, Chesapeake

    Washington
    601 South Grady Way Suite P, Renton
    3202 132nd Street Southeast, Mill Creek
    110 Southwest 148th Street, Burien
    10103 Evergreen Way, Everett
    8230 Martin Way East, Lacey
    22201 Meridian Avenue East, Graham
    9600 15th Avenue Southwest, Seattle
    2518 196th Street Southwest, Lynnwood
    3620 Factory Blvd Southeast, Bellevue
    11919 Northeast 8th Street, Bellevue
    7370 170th Avenue Northeast, Redmond

    — Mike Murphy contributed to this report.

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  • Debt-ridden Rite Aid files for bankruptcy, will close more stores

    Debt-ridden Rite Aid files for bankruptcy, will close more stores

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    Drugstore chain Rite Aid Corp. filed for bankruptcy Sunday, as it faces billions of dollars of debt related to opioid lawsuits.

    In a statement Sunday night, Rite Aid
    RAD,
    -16.81%

    said it will close some “underperforming” stores and announced Jeffrey Stein as its new chief executive and chief restructuring officer. Interim CEO Elizabeth Burr will remain on the company’s board.

    The bankruptcy filing had been expected for months, and the Wall Street Journal reported in August that Rite Aid was more than $3.3 billion in debt, due largely to hundreds of lawsuits related to its distribution of opioid painkillers. The bankruptcy filing stays pending litigation against the company.

    Earlier this month, the New York Stock Exchange warned Rite Aid that it was “no longer in compliance” with the exchange’s minimum pricing and valuation standards, and gave it six months for the stock to regain compliance. Rite Aid shares have plunged about 80% year to date.

    Rite Aid said Sunday that lenders will provide $3.45 billion in financing for the chain to continue operating through the chapter 11 bankruptcy process.

    “With the support of our lenders, we look forward to strengthening our financial foundation, advancing our transformation initiatives and accelerating the execution of our turnaround strategy,” Stein said in a statement. “In doing so, we will be even better able to deliver the healthcare products and services our customers and their families rely on — now and into the future.”

    Rite Aid said it would work to minimize the effect of store closures on its customers so there is no disruption of services, and will transfer affected workers to different locations when possible.

    Rite Aid has about 2,100 stores and employs around 47,000 people. It has closed more than 200 stores in the past couple of years.

    Rite Aid also said it had reached a deal for pharmacy benefit-solutions company MedImpact Healthcare Systems Inc. to acquire its Elixer Solutions business. A price for the transaction was not disclosed.

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  • Debt-ridden Rite Aid files for bankruptcy, will close more stores

    Debt-ridden Rite Aid files for bankruptcy, will close more stores

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    Drugstore chain Rite Aid Corp. filed for bankruptcy Sunday, as it faces billions of dollars of debt related to opioid lawsuits.

    In a statement Sunday night, Rite Aid
    RAD,
    -16.81%

    said it will close some “underperforming” stores and announced Jeffrey Stein as its new chief executive and chief restructuring officer. Interim CEO Elizabeth Burr will remain on the company’s board.

    The bankruptcy filing had been expected for months, and the Wall Street Journal reported in August that Rite Aid was more than $3.3 billion in debt, due largely to hundreds of lawsuits related to its distribution of opioid painkillers. The bankruptcy filing stays pending litigation against the company.

    Earlier this month, the New York Stock Exchange warned Rite Aid that it was “no longer in compliance” with the exchange’s minimum pricing and valuation standards, and gave it six months for the stock to regain compliance. Rite Aid shares have plunged about 80% year to date.

    Rite Aid said Sunday that lenders will provide $3.45 billion in financing for the chain to continue operating through the chapter 11 bankruptcy process.

    “With the support of our lenders, we look forward to strengthening our financial foundation, advancing our transformation initiatives and accelerating the execution of our turnaround strategy,” Stein said in a statement. “In doing so, we will be even better able to deliver the healthcare products and services our customers and their families rely on — now and into the future.”

    Rite Aid said it would work to minimize the effect of store closures on its customers so there is no disruption of services, and will transfer affected workers to different locations when possible.

    Rite Aid has about 2,100 stores and employs around 47,000 people. It has closed more than 200 stores in the past couple of years.

    Rite Aid also said it had reached a deal for pharmacy benefit-solutions company MedImpact Healthcare Systems Inc. to acquire its Elixer Solutions business. A price for the transaction was not disclosed.

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  • Pharmacy Giant Walgreens Names Tim Wentworth as New CEO

    Pharmacy Giant Walgreens Names Tim Wentworth as New CEO

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    Pharmacy Giant Walgreens Names Tim Wentworth as New CEO

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  • GameStop’s stock on pace for lowest close in two-and-a-half-years

    GameStop’s stock on pace for lowest close in two-and-a-half-years

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    Shares of GameStop Corp. fell 6.9% Monday and are trading at $15.33, putting the stock on pace for its lowest close since Feb. 23, 2021, when it closed at $11.24, FactSet data show.

    The stock, which is down for four of the last five days, is on pace for its largest percent decrease since June 8, 2023, when it fell 17.89%, according to FactSet.

    Related: GameStop’s stock soars after activist investor Ryan Cohen named CEO

    Activist investor Ryan Cohen was named CEO of GameStop
    GME,
    -6.59%

    last week, marking the latest chapter in his attempt to breathe new life into the video-game retailer and original meme-stock company.

    Cohen, the co-founder and former CEO of Chewy Inc. 
    CHWY,
    +1.92%
    ,
      made his first investment in GameStop in August 2020 via his investment firm RC Ventures. News of Cohen’s 9% stake in the gaming retailer sent its stock surging. The activist investor quickly began pushing for an overhaul of GameStop, with a focus on digital sales, and he joined the company’s board in January 2021. He consolidated his power at GameStop when he became the company’s chairman in June 2021.

    Ryan Cohen becomes GameStop CEO and social media reacts: ‘Changing the paradigm on Wall Street’

    In its statement announcing Cohen’s election as CEO, GameStop confirmed that he will not receive compensation for serving as the company’s president, chief executive and chairman.

    The video game retailer reported better-than-expected second-quarter results last month, boosted by international sales and what the company described as “a significant software release.” GameStop is also ramping up its efforts to control costs.

    Ryan Cohen has no ‘new idea’: Analyst blasts ‘doomed’ GameStop after leadership announcement

    GameStop shares are down 17% in 2023, compared with the S&P 500 Index’s
    SPX
    gain of 11.2%.

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  • Alcoa’s stock rocked after unexpected CEO transition

    Alcoa’s stock rocked after unexpected CEO transition

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    Shares of Alcoa Corp. slumped to a multiyear low Monday as the aluminum company said that Roy Harvey had been replaced as chief executive officer after seven years in the role.

    The company named William Oplinger as president and CEO, effective Sunday. Oplinger had served as Alcoa’s chief operations officer since February and before that as chief financial officer since November 2016.

    Alcoa’s stock
    AA,
    -5.20%

    dropped 5.1% in morning trading. That put it on track for the lowest close since March 1, 2021. It has tumbled 18% over the past three months and plunged 40.8% year to date, while the S&P 500
    SPX
    has rallied 12.8% this year.

    “In our opinion, investors have expressed concern around cash flow and the company’s medium to long-term outlook,” B. Riley analyst Lucas Pipes wrote in a note to clients. “While the timing of the transition is somewhat unexpected, we believe Mr. Oplinger is the most well-positioned candidate for the CEO role.”

    Harvey had been CEO since the company completed its separation from Arconic Inc. in November 2016. Arconic was acquired by Apollo Global Management Inc.
    APO,
    +1.55%

    in a deal that was completed in August 2023.

    “The transition of the president and CEO roles reflects the company’s succession planning process,” Alcoa said in a statement.

    “Our board believes Bill’s extensive experience with Alcoa makes him well-positioned to carry the company forward,” said Steven Williams, Alcoa’s board chair.

    B. Riley’s Pipes said that as Alcoa has faced challenging aluminum markets in recent quarters, and given the troubles associated with approvals of mine plans in Australia, he believes the change in leadership reflects the company’s desire to reposition its asset base for stronger cash-flow generation.

    “While Mr. Harvey has successfully transformed Alcoa in recent years, particularly as [Alcoa] has aggressively deleveraged, we believe the transition will be viewed favorably by investors,” Pipes wrote.

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  • Howard Schultz steps down from Starbucks board of directors

    Howard Schultz steps down from Starbucks board of directors

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    Starbucks Corp. on Wednesday said former Chief Executive Howard Schultz is stepping down from its board of directors, capping a nearly 40-year career during which the company grew from a handful of stores in Seattle into a global coffee chain.

    Schultz’s retirement from the board, which ends his involvement in the company’s leadership, took effect Wednesday and was part of a planned transition, the coffee chain said. Schultz stepped down as Starbucks
    SBUX,
    +0.72%

    chief executive in March.

    The company on Wednesday also said that it had elected Wei Zhang to its board of directors, effective Oct. 1. Zhang was most recently a senior adviser to Chinese e-commerce giant Alibaba Group
    BABA,
    -0.75%

    and also held leadership positions at News Corp China and CNBC China.

    Shares of Starbucks were down 0.7% after hours on Wednesday.

    Starbucks said Schultz “will now turn his attention with his wife, Sheri, to focus on a range of philanthropic and entrepreneurial investments to create greater opportunity, accessible to all.” The company noted that the two were co-founders of the Schultz Family Foundation in 1996, and of the emes project.

    Although he was not technically the founder of the coffee chain, Schultz became the modern face of it. Schultz joined Starbucks in 1982 as its director of operations and marketing. After a brief hiatus from the company, he returned in 1987 as chief executive and bought the business with backing from local investors, according to a biography on the Starbucks website. The chain went public in 1992.

    As the chain’s footprint expanded beyond the U.S., Schultz stepped down from the CEO role in 2000 but returned in 2008. He retired from Starbucks in 2018, then came back as interim chief executive and board member last year.

    Over those years, Starbucks has banked on China for international growth — even as that country’s economy remains turbulent following the postpandemic reopening. It also added food and cold and customizable drinks to its menus and built out its mobile-ordering infrastructure.

    The company has branded itself as a progressive employer and a supporter of social justice. But over the past two years, the company, and Schultz in particular, have faced criticism over the handling of employees who were trying to unionize. Union members have accused the chain of unfair labor practices, retaliation for organizing and delaying contract negotiations, leading to deeper scrutiny from lawmakers.

    “We hope this is an opportunity for Starbucks to change course and leave their union-busting behind them,” Starbucks Workers United, the union representing those workers, said Wednesday in a tweet.

    Still, even as inflation has eaten into consumer savings, Schultz said coffee has remained an “affordable luxury” for many customers. And Starbucks management said that younger, loyal consumers and customizable drinks would help sustain demand.

    According to a filing on Wednesday, Schultz will still be connected to the company in other ways. Starbucks said it would amend Schultz’s retirement agreement from 2018 and continue to provide him and his spouse with security services.

    “The security services will be provided for a period of 10 years and will be evaluated on an annual basis,” the filing said. “In recognition of Mr. Schultz’s leadership as the company’s founder and chairman emeritus, the company will also provide Mr. Schultz with the reimbursement of his monthly healthcare insurance premiums.”

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