Amazon’s big stock slide shows strategy’s shaky

Time for Amazon to hit the Mayday Button.

Investors are beginning to wake up and realize that maybe this whole thing about putting long-term profits over short-term profits isn't as enchanting and magical as CEO Jeff Bezos once made it seem.

Amazon's stock plummeted an astonishing 
10 percent in a day after the announcement of a $126 million quarterly loss on Thursday — the latest in a long string of losses for the e-commerce beast.

For consumers, Amazon's prices seem impossibly low. And that's because they are, in fact, impossible. You can't sell items that cheaply. No company could ever make a profit by selling goods at or below cost, and that's exactly what Amazon has done for as long as anyone can remember.

Bezos is a puzzling man. The delivery drones. The atomic clock. The Washington Post. Who can figure this dude out? Some commentators have wondered whether Amazon was set up to function as a de facto consumer charity. I've wondered that myself. I've come to quite the opposite conclusion.

Amazon won't raise its prices until it has achieved a majority of the market that brick-and-mortar retailers currently occupies. An entire generation of locally owned small businesses — and mid- to large-sized businesses — hang in the balance.

"The current investment cycle layers in increased technology and content costs as Amazon seeks to build itself into a complete consumption, payment and advertising platform for physical and digital goods," wrote analyst Colin Gillis of BGC Financial in a note to investors yesterday.

In other words, all this taking over the world ain't cheap!

Currently valued at 
$147 billion, Amazon is the 28th largest publicly traded company in the United States. And in the past 48 hours it lost $15 billion of its market value.

Investors are getting antsy.

I'm all about encouraging that sense of angst. Although Amazon's convenience and prices are hard to beat, I find myself spending a little more offline lately: shopping local, paying a little bit more here and there, and chalking it up to charity. You too can help keep Amazon stockholders worried and a little ticked off. You know what to do.

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Home Showcase: Cabot mansion unit receives updates

This unit is part of the former mansion of Godfrey Lowell Cabot, founder of the Cabot Corp., that has seen extensive updating over the past several years.

Unit 3 at 242 Beacon St. is one of nine units carved out of the grand mansion. And Unit 3's living/dining area was the home's original receiving parlor.

Recent renovations include two redone bathrooms, updated kitchen, walnut-stained red oak floors throughout, three new HVAC units, new living room windows and built-in shelving for bedroom closets.

The brick exterior of the building and the roof were recently repaired and the front landscaping was redone last year. The marble floor in the building's lobby was replaced in 2012, and a reconditioned elevator and stairways lead up to the condos.

Unit 3 opens into a foyer with a large storage closet. This space is approved for installation of an in-unit washer and dryer. Right now, there is washer/dryer for common use in the building's basement.

Straight ahead is the unit's updated kitchen with oak floors, recessed lighting, 16 white-painted cabinets and dark granite countertops with a tumbled marble backsplash. Stainless-steel appliances include Kitchen Aid and G.E. Profile.

The large living/dining space has a lot of original detailing such as crown molding and a blue tile-faced original wood fireplace. This recessed-lit room has high ceilings, three new front windows in a bay arrangement and cabinet and bookcase built-ins on either side of the fireplace.

The master bedroom suite has a large arched architectural window and a walk-in closet with newly built-in storage. It has a redone en-suite bathroom with black-and-white ceramic tile floors but does not have a tub or shower, although there's space in a corner of the living room to expand.

There's a also fully redone second full bathroom with black-and-white ceramic tile floors, and this bath does have a deep soaking tub/ shower lined with white subway tile.

The second bedroom does not have a window to the outside, but an interior lightwell with storage space. There's also a closet with built-in storage.

There are three new HVAC units, in the living room and in the two bedrooms with new electric thermostats. Heat and hot water is provided as part of the unit's condo fee.

There is a waiting list for parking behind the building for $300 a month. But the owner may be able to get a nearby transferable rental space for $325 a month.

Home Showcase

• Address: 242 Beacon St., Unit 3, Back Bay
• Bedrooms: Two
• Bathrooms: One full, one half
• List price: $899,000
• Square feet: 1,254
• Price per square foot: $717
• Annual taxes: $9,547
• Monthly condo fee: $407 (includes heat and hot water)
• Location: On Beacon Street near the corner of Dartmouth two blocks from retail and restaurants on Newbury Street, three blocks from offerings on Boylston Street.
• Built in: 1884; updated 2011-2014
• Broker: Robb Cohen of Boston Realty Advisors at 617-962-0142

Pros:

• Large, open living dining area with original details, new built-ins and new windows.
• New walnut-stained red oak floors throughout
• Redone bathrooms with black-and-white tile floors
• Three new HVAC units and electric thermostats

Cons:

• En-suite master bathroom doesn't have tub or shower
• Second bedroom doesn't have window to outside
• In-unit laundry has not been installed
• Waiting list for parking behind building

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Is Marty right to bunker down?

A day after the state Gaming Commission suggested Boston was "abandoning" Charlestown, neighborhood residents were split yesterday on whether Mayor Martin J. Walsh did the right thing by breaking off talks with Wynn Resorts about how much money the city should get to cope with the company's proposed Everett casino.

"The mayor is not abandoning Charlestown residents. He was a strong ally in arguing for Charlestown to be considered a host community. ... The commission rejected that," said James Matsoukas, who has lived in Charlestown for three years. "There's just so much the mayor can do to negotiate deals that give the city some compensation, when the party he is dealing with is not forthcoming, not approaching the situation in good faith and making a public offer far below what the project requires. What the mayor is saying implicitly is that a decision has already been made."

The offer Wynn made — but Walsh rejected — called for $6 million in one-time payments and $2.6 million annually, compared to the $30 million upfront and minimum annual $18 million pledged to Boston by Mohegan Sun — Wynn's rival for the sole-Boston-area casino license — for a casino on the Revere side of Suffolk Downs.

But Evelyn Addante said she is "incredulous" that Walsh has ceded all dealings with Wynn over to the commission without telling it what the city wants.

"I believe the traffic impacts and safety implications are so important that the mayor should not have missed an opportunity to provide an estimate of the cost of providing road improvements that would ameliorate these impacts," said Addante, 64.

In an email, Walsh spokeswoman Melina Schuler said: "Wynn failed to provide critical information to the city ... We're confident the commission will not have the same issue accessing information from Wynn and expect it will be able to properly assess the project impacts and award Charlestown an appropriate mitigation package."

On Thursday, the commission said it would have its staff continue to urge Boston to negotiate with Wynn and, if that fails, it may appoint someone to serve as the city's advocate.

Its license deliberations will begin Sept. 8, and the commission hopes to make a licensing decision on Sept. 12.

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Regulators foaming over liter beers

Liters of lager are an essential piece of Bavarian beer culture. They're apparently verboten in Bay State beer halls.

The Alcoholic Beverages Control Commission threatened to put Firebrand Saints in Cambridge under surveillance yesterday to ensure it did not go ahead with plans to host a liter-mug patio party last night with Bay State beer maker Notch Brewing Co.

The board argued the promotional mugs used to serve the low-alcohol "session beers" that are Notch's speciality ran afoul of happy-hour regulations, after reading about the party plans in yesterday's Herald.

"We got a call from the ABCC and were told that we'd be under surveillance and that if we served the (liter mugs) we'd get in trouble," said Firebrand Saints owner Gary Strack. ABCC spokesman John Carlisle could not be reached for comment.

A liter is 33.8 ounces, slightly more than two pints. Notch Brewing's session beers are brewed with low- alcohol content, generally about 4 percent, to satisfy drinkers looking for full flavor without the heavy buzz.

"You can get a pint of beer with 10 percent alcohol in this state no problem," said Notch Brewing Co. owner Chris Lohring. "But you can't get a two-pint serving of beer with 4 percent alcohol. It makes no sense."

"We were trying to create the same sort of spirit of a German beer garden," said Strack. "It's a great event with cultural relevance."

As of press time, the party was in full swing, with the following workaround in place: patrons had empty liter mugs, bought full pitchers of sessions beer, and poured them into the mugs, Lohring confirmed.

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A fixer-upper for $3.4 million?

This 8,208-square-foot Chestnut Hill mansion is unlike most high-end properties you'll see in this toney neighborhood.

First of all, the 1904-built home at 152 Suffolk Road was designed in Spanish Mission style, rare for this area, complete with a stucco exterior, red terra cotta tile roof and a pagoda-style entry.

The original 26-acre estate was built for prominent shoe tycoon Clement S. Houghton, and included a large carriage house and a 10-acre garden. The city of Newton acquired the garden in 1968 and turned it into a city park. Other lots were sold off. The main house, which is listed on the National Register of Historic Places, sits on just 1.61 acres now.

For the past 43 years, the main house has been owned by architect Branko Brankovic and his artist wife Angela Vinkler-Petrovic, founders of the well-known Baak jewelry and fine arts gallery in Harvard Square.

"I envision the buyer as someone who's socially prominent in the community and loves to entertain," said Brankovic, who once worked for the storied Architects Collaborative in Cambridge.

The interior of the home has great architectural detail. The main entry hall is lined with oak paneling, has elegant window seat cushions and arts-and-craft style brick floors. There's a sweeping central staircase with an original carved metal chandelier hanging over it. The large dining and living rooms have magnificent fireplaces with carved woodwork and beamed ceilings. There's a study lined with bookcases, a sunroom off the dining room and an outdoor terrace off the living room.

On the market for $3.4 million, the house undoubtedly has great bones, but as a disclaimer in the listing sheet states: "The home is in need of major renovations."

So is this the Boston area's priciest fixer-upper?

"It does need a lot of work," admitted co-listing broker Marjorie Gold of William Raveis Real Estate. "But what we're offering here is a piece of history in a great location."

Not that there haven't been updates. Over the years, Brankovic added a first-floor kitchen (the original is in the basement with its vintage stove), updated the bathrooms and even replaced the tar paper and flashing under the terra cotta roof tiles.

He created and redid the master bedroom suite, but the purple bathroom fixtures here and elsewhere on the second floor are outdated.

There's a great original linen closet with walls of glass cabinets, beautiful hardwood floors and original doors and moldings on the second floor, which has six bedrooms.

There's a warren of rooms on the third floor, which once housed the Houghtons' 11 servants. And there's lots more storage in the huge basement.

Potential buyers should bring their own architects. Giving this grand house the makeover it needs will be a major undertaking.

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Rupert Murdoch's BSkyB to merge with German and Italian sister companies to create pay TV giant

Rupert Murdoch-controlled U.K. pay TV operator BSkyB announced deals on Friday to take control of its German and Italian sister companies to create a pan-European pay TV giant. The total value of the deals will be 5.35 billion ($9.09 billion).

Murdoch's 21st Century Fox owns a 39% stake in BSkyB, 100% of Sky Italia and 57% of Sky Deutschland. The proposed deals, which are subject to shareholder approval, will see BSkyB acquire Fox's stakes in Sky Italia and Sky Deutschland. It also will bid for the remaining Sky Deutschland shares.

The acquisition of Sky Italia will cost 2.45 billion ($4.16 billion) with approximately 2.07 billion ($3.51 billion) to be paid in cash, and the balance to be secured through the transfer of BSkyB's 21% stake in National Geographic Channel Intl. to Fox at a value of 382 million ($649 million).

The acquisition of Fox's shareholding in Sky Deutschland will cost 2.9 billion ($4.92 billion) in cash, valuing Sky Deutschland at EUR6.75 ($9.09) a share. BSkyB will offer Sky Deutschland minority shareholders that price for the remaining shares.

The total worth of the deals to buy Sky Italia and 57% of Sky Deutschland would be 5.35 billion ($9.09 billion). Depending on how many Sky Deutschland minority shareholders accept the offer for their shares, the total cash consideration overall may be up to approximately 7 billion ($11.9 billion).

The coin will add to Fox's war-chest, which it could dip into should it decide to make an improved bid for Time Warner.

The merged entity, which some observers are calling Sky Europe, will have 20 million pay TV subscribers in the U.K., Ireland, Italy, Germany and Austria. Potentially, Sky Europe will be able to reach up to 97 million households. The German market offers large opportunities for growth. Only 20% of German households subscribe to premium pay TV channels, compared with 50% in the U.K., according to research group IDATE. Italy is a tougher market -- Sky Italia has lost more than 200,000 customers since 2011.

Goldman Sachs analysts estimate that combining the three companies could generate synergies of 100 million ($170 million) by 2017, the Financial Times reported Thursday.

Jeremy Darroch, BSkyB's chief executive, said: "This transaction will create a world-class, multinational pay TV business with enhanced headroom for growth and immediate benefits of scale. The three Sky businesses are leaders in their home markets and will be even stronger together. By creating the new Sky, we will be able to use our collective strengths and expertise to serve customers better, grow faster and enhance returns."

Financial analysts have speculated in recent days that Murdoch's long-term goal may be to acquire the remaining shares in BSkyB and then sell Sky Europe to a telco.

BSkyB also announced results for the 12 months ended June 30. Adjusted revenue was up 7% to 7.6 billion ($12.9 billion). Profit after tax was 937 million ($1.59 million), compared with 969 million ($1.65 billion) in 2013.

(C) 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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Ultra high definition TVs boost LG Display profit

SEOUL, South Korea — LG Display Co. said profit for the April-June quarter more than doubled as a stronger won reduced the value of its foreign debt and the World Cup boosted demand for ultra-high-definition TVs.

The South Korean display panel maker said Wednesday its net income reached 256 billion won ($250 million), compared with 105 billion won a year earlier. Operating fell, however, showing that most of the net profit improvement came from the debt revaluation.

Analysts polled by FactSet, a financial data provider, expected profit of 114 billion won.

The panel supplier for Apple Inc. said higher demand for UHD TVs during the World Cup increased panel shipments.

LG Display's parent company, LG Electronics Inc., is among the TV makers betting that a quadrupling of the resolution of high-definition TVs will convince consumers to upgrade.

Consumer interest in UHD TV sets, also known as "4K," is positive for panel makers especially because those advanced TV sets tend to come in big sizes, featuring screens larger than 40 inches.

LG said a slight decline in panel prices during the second quarter was offset by selling more panels.

The company was also helped by the rise of South Korean won, which reduced the size of its foreign currency denominated debt.

Overall sales, however, fell 9 percent to 5.6 trillion won. Operating profit plunged 55 percent to 163 billion won, slightly lower than analysts' forecast.

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China detains employees of suspect meat seller

BEIJING — Five employees of a company accused of selling expired beef and chicken to McDonald's, KFC and other restaurants were detained by police Wednesday after an official said illegal activity was an organized effort by the supplier.

China's food safety agency said on its website that its investigators found unspecified illegal activity by Husi Food Co. but gave no confirmation expired meat had been found or other details.

Some of the illegal conduct was an "arrangement organized by the company," the deputy director of the agency's Shanghai bureau, Gu Zhenghua, told the official Xinhua News Agency.

Those in criminal detention include Husi's quality manager, the Shanghai police department said on its microblog account. The one-sentence statement gave no details of possible charges or the employees' identities.

The scandal surrounding Husi, which is owned by OSI Group of Aurora, Illinois, has alarmed Chinese diners and disrupted operations for fast food chains.

It erupted Sunday when a Shanghai broadcaster, Dragon TV, reported that Husi repackaged old beef and chicken and put new expiration dates on them. It said they were sold to McDonald's, KFC and Pizza Hut restaurants.

Xinhua said the manager of Husi's quality department, Zhang Hui, told investigators "such meat had been produced under tacit approval of the company's senior managers." It said the company "has been conducting the malpractice for years."

An employee who answered the phone at the food agency office in Shanghai declined to give any additional details.

Restaurant operators that have withdrawn products made with meat from Husi include McDonald's Corp., KFC owner Yum Brands Inc., pizza chain Papa John's International Inc., Starbucks Corp., Burger King Corp. and Dicos, a Taiwanese-owned sandwich shop chain.

The scare has also spread to Japan where McDonald's said 20 percent of the meat for its chicken nuggets was supplied by Husi.

Product safety is unusually sensitive in China following scandals over the past decade in which infants, hospital patients and others have been killed or sickened by phony or adulterated milk powder, drugs and other goods.

Husi said in a statement earlier this week it was "appalled by the report" and believed it to be an "isolated event." It promised to cooperate with the investigation and to share the results with the public.

The State Food and Drug Administration's statement Wednesday said investigators seized 160 tons of raw material and 1,100 tons of finished products from Husi. The agency said earlier its investigation would extend to Husi facilities in Shanghai and five other provinces.

During a conference call Tuesday to discuss its financial results, McDonald's Corp. CEO Don Thompson said the company felt a "bit deceived" about the plant in question.

Foreign fast food brands are seen as more reliable than Chinese competitors, though local brands have made big improvements in quality.

KFC, China's biggest restaurant chain with more than 4,000 outlets and plans to open 700 more this year, was hit hard by a report in December 2013 that some poultry suppliers violated rules on drug use in chickens. Sales plunged and KFC overhauled quality controls, cutting ties with more than 1,000 small poultry suppliers.

___

Associated Press researchers Fu Ting in Shanghai and Yu Bing in Beijing contributed.

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Israeli foreign minister Avigdor Lieberman says Al Jazeera is enemy

Israeli foreign minister Avigdor Lieberman has set his sights on a new enemy: the television network Al Jazeera.

As Israel enters its third week of a bloody confrontation with Hamas in Gaza, Lieberman on July 21 called the Qatari network a crucial piece of Hamas' propaganda effort and said the Israeli government is already in the process of banning it.

"Al Jazeera has abandoned even the semblance of a credible media outlet, and it broadcasts - both within Gaza and outside it, to the world - anti-Semitic incitement, lies, provocation and encouragement to terrorists," Lieberman said.

Al Jazeera is bankrolled by and maintains it headquarters in the tiny, oil-rich nation of Qatar, a country that is eager to play a more dominant role in Middle-Eastern politics, and despite having no formal relations with Israel, is known to maintain several back channels of trade and industry. But Qatar is also the current home of Hamas leader Khaled Meshal and an open supporter of the Muslim Brotherhood.

"Qatar constitutes the economic spine of the most radical terrorist groups," Lieberman said.

Less than 24 hours after Lieberman's statement, Al Jazeera reporters in Gaza said warning shots had been fired into their Gaza City headquarters. Terrified staffers wrote on Twitter that the fire had come from Israel Defense Forces soldiers, and the building was evacuated.

The IDF, however, denied the incident, and conflicting reports on Twitter said that incident had in fact been shattered windows caused by a nearby explosion.

(C) 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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HIV pills show more promise to prevent infection

There is more good news about the HIV treatment pills that are used to prevent infection in people at high risk of getting the AIDS virus. Researchers say that taking these prevention pills does not encourage risky sex and is effective even if people skip some doses.

The results come from longer follow-up on more than 1,600 gay men in a landmark study a few years ago testing daily doses of the pill Truvada (troo-VAH'-duh).

About three-quarters of the participants kept taking the pills for another 17 months. None who used them four or more days a week got HIV, and even taking the pills less often helped — although not as much.

The work was discussed Tuesday at the International AIDS Conference in Melbourne, Australia.

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