• Sunday , 4 December 2016

Cashback News – Aug 8: Special report: Walmart buys Jet.com for $3.3 billion

Walmart acquires jet.comIt was last week’s worst-kept secret, but today Walmart announced a $3.3 billion deal to acquire US e-commerce company Jet.com. After a week of speculation, market analysts and retail industry watchers seem positive on the impact for Walmart. Let’s remember, Walmart is already doing $13.6 billion of business online.

Early consensus is it makes strategic business sense for both companies and creates a stronger competitor for Amazon in the e-commerce marketplace. Here’s a first, fast look at what industry experts are saying about the deal.

Walmart Reaches Deal to Buy Jet.com for $3.3 Billion

http://www.nytimes.com/2016/08/09/business/dealbook/walmart-jet-com.htmlJet.com, an online store that sells a wide range of products like groceries, books, jewelry and appliances, agreed to sell itself to Walmart Stores for $3.3 billion as they both seek to take on a mutual competitor: Amazon.

The deal incorporates $3 billion to be paid to Jet.com stakeholders in cash, a portion of that to be distributed over time, while $300 million will be paid in Walmart stock over time, according to a statement released by the companies on Monday. The companies did not specify the length of the payment period.

Before Jet.com even opened for business, the company had raised hundreds of millions of dollars from venture capitalists, who believed the start-up had the potential to take on Amazon, the No. 1 e-commerce giant. Founded in 2014 and based in Hoboken, N.J., Jet.com started selling products about a year ago through a special algorithm that lowered prices for consumers based on how much they purchased. Via nytimes.com

Confirmed: Walmart buys Jet.com for $3B in cash to fight Amazon

Walmart buys Jet.comWalmart today took its biggest step yet in its bid to compete against Amazon in the world of digital commerce: today the retail giant announced that it would be acquiring Jet.com — an online-only shopping site that has been live for a little over a year — for $3 billion in cash, plus up to $300 million in shares for the founders and others at the company.

Jet.com will continue to retain a separate brand, Walmart said today, and Marc Lore, the CEO of Jet.com, will lead both Jet and Walmart online, taking over from Neil Ashe. “This is Walmart being even more committed to winning in e-commerce,” said Doug McMillon, president and CEO of Walmart, in a conference call with investors, who said described the executive change was “a natural transition.”

“What he’s built at Jet has applications at Walmart,” he added. “The job [he will be taking over] is more focused on U.S. e-commerce and that makes sense to us.” Via techcrunch.com

Wal-Mart to Acquire Jet.com for $3.3 Billion in Cash, Stock

Walmart storeWal-Mart Stores Inc. signed a $3.3 billion deal to buy web retailer Jet.com Inc., bringing in some outside help to jump-start growth at the retail giant’s e-commerce operations.

The deal is the largest-ever purchase of a U.S. e-commerce startup and a sign Wal-Mart Chief Executive Doug McMillon sees the shift to online shopping and the expansion of Amazon.com Inc. as existential threats to the company’s five decades of growth.

Jet’s 45-year-old founder, Marc Lore, will take on a senior leadership position on the e-commerce side of the company, and Wal-Mart’s top online executive, Neil Ashe, is expected to depart, a person familiar with the situation said. Mr. Ashe joined Wal-Mart as head of e-commerce in 2012. Via wsj.com

Walmart And Jet.com Tie The Knot

http://www.forbes.com/sites/neilstern/2016/08/08/walmart-and-jet-com-tie-the-knot/#19d188603ed9Walmart officially announced a $3 billion deal to acquire Jet.com on Monday morning.

“We’re looking for ways to lower prices, broaden our assortment and offer the simplest, easiest shopping experience because that’s what our customers want,” said Doug McMillon, president and CEO of Walmart. “We believe the acquisition of Jet accelerates our progress across these priorities. Walmart.com will grow faster, the seamless shopping experience we’re pursuing will happen quicker, and we’ll enable the Jet brand to be even more successful in a shorter period of time.”

While there may be eyebrows raised concerning the price Walmart is paying for a company that barely has $1 billion in revenue and no profitability, I applaud this deal as the kind of bold step that existing brick and mortar companies can and should take to try and even the playing field against a dominant Amazon.com AMZN -0.13%.

Not only is Walmart buying an innovative e-commerce platform that attempts to lower prices to the consumer by focusing on crowd-sourced deal participation and a new way to think about fulfillment, they are also acquiring the services of a visionary entrepreneur in Marc Lore, who thinks about e-commerce models differently. The synergies between Walmart’s merchandising, sourcing and financial muscle combined with Jet’s innovation could help further redefine e-commerce over the next decade. Via forbes.com

Wal-Mart to buy Jet.com in $3 billion deal

http://www.cnbc.com/2016/08/08/wal-mart-to-by-jetcom-in-3-billion-deal.htmlThe largest-ever acquisition of an e-commerce company likely won’t be enough for Wal-Mart to dethrone Amazon. But there’s no shame in playing for second.

In a bid to juice its online business, the world’s largest retailer agreed Monday to purchase Jet.com in a $3.3 billion deal. The acquisition will beef up Wal-Mart’s e-commerce prowess, from deepening its bench of talent to finding the cheapest way to ship online orders.

These capabilities should help Wal-Mart grab a larger piece of the growing e-commerce pie. They’re also the best chance it has of closing the wide — and growing — gap between it and Amazon, analysts said. “Amazon’s got this huge lead. That lead is going to be tough to relinquish but there’s a lot of [share] out there,” Moody’s analyst Charlie O’Shea told CNBC. Via cnbc.com

Wal-Mart: Jet Fuel for Amazon Battle?

http://blogs.barrons.com/stockstowatchtoday/2016/08/08/wal-mart-jet-fuel-for-amazon-battle/Wal-Mart Stores (WMT) is buying web retailer Jet.com for $3 billion as it tries to compete with Amazon.com (AMZN). UBS analyst Michael Lasser and team wonder how much fuel the acquisition will provide:

The official announcement from Wal-Mart about its purchase of Jet.com didn’t contain many additional details beyond what has already been reported. Though, the release stated that Jet.com will be operated as distinct brand, which is a positive in our view. Until now, Wal-Mart probably faced some difficulty attracting the best & brightest engineers & eComm talent given its perception as a “traditional retailer.” We think the addition of a rapidly growing and innovative etailer should enable Wal-Mart to attract human capital and knowledge that it might not have otherwise been able to attain. Further, the release didn’t make clear the role of Jet.com’s founder, Marc Lore, but with $300 mm of shares to be paid out over time, the new team will have an incentive to succeed. In our view, while this transaction won’t really have a near-term impact on Wal-Mart’s investment case, it could be a spark to better position it over the long run.

The $3 billion purchase price seems pretty steep for a business that may not have made any money and probably won’t for some time. The financial info in the release was scarce, but it noted that Jet reached a $1 b run rate of GMV during its first year in operation. Other reports suggest that Jet has raised $565 mm in total funding. To put the potential financial impact for Walmart in perspective, we estimate that Wal-Mart would see a $0.03-$0.05 EPS drag for every $100 mm of operating losses that it will have to absorb. Also, it’s not clear if the capital that is earmarked for this deal will come at the expense of share repurchases. But, Wal-Mart has plenty of cash to fund it with $7.6 bn on its balance sheet as of the end of 1Q. Via blogs.barrons.com

Jet.com is acquired by Walmart (WMT) for $3.3 billion in a big, well-timed win for Jet.com investors

http://qz.com/753018/jet-coms-3-3-billion-sale-to-walmart-is-a-big-well-timed-win-for-its-investors/Walmart said this morning that it is buying Jet.com, an e-commerce startup, for $3.3 billion in cash and stock. Walmart and Jet will remain separate brands, the companies said in a release. The deal is subject to regulatory approval and expected to close this year.

By acquiring Jet, Walmart is hoping to jumpstart its flagging online shopping operations and stem losses to Amazon. Jet is a savvy tech startup that launched last July with dreams of taking on Amazon and quickly surpassed a $1 billion valuation. Its CEO, Marc Lore, is a well-known e-commerce veteran who made his name selling Quidsi, the parent company of Diapers.com and other niche retailing sites, to Amazon in 2011 for $545 million. Lore will reportedly take a senior leadership role on Walmart’s e-commerce team as part of the deal.

Jet is on track to handle $1 billion in total sales this year and says it adds 400,000 new shoppers each month. Growth in Walmart’s global e-commerce sales has declined steadily over the last two years. Via qz.com

Will Walmart become world’s largest omnichannel retailer with Jet.com deal?

http://www.mobilecommercedaily.com/walmart-could-become-worlds-largest-omnichannel-retailer-with-jet-com-dealWalmart has the potential to catch up to Amazon’s mcommerce prowess and surpass other bricks-and-mortar retailers on the omnichannel front following reports that it has acquired online discount retailer Jet.com.

Walmart’s decision to revamp its ecommerce model, which has experienced fledgling sales in the past year, has resulted in the brand purchasing Jet.com for approximately $3.3 billion. While opinions on the effectiveness and ultimate return-on-investment of the Jet.com acquisition differ among experts, many believe that the potential to receive access to scores of new customers in specific markets and greater analytics capabilities will result in Walmart climbing up a few notches in the mobile commerce space.

“For Walmart, the acquisition of Jet.com will mean the company will gain access to a new platform, which will drive growth in a more cost-efficient manner than its traditional bricks-and-mortar approach,” said Jennifer Sherman, senior vice president of product and strategy at Kibo Commerce. Via mobilecommercedaily.com

US e-commerce just got very interesting

With the announcement of the acquisition of Jet.com by Walmart, US e-commerce gets very interesting and much more competitive with market leader Amazon. Initial market reaction is positive for Walmart and consumers will be watching to see if low prices, fast delivery and further customer service innovations follow with this new Amazon competitor.

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