Archives for October 2018

Lime Is Shutting Down Some of Its Scooters Because They May Catch Fire

Lithium powers everything from the smartphone revolution to your city’s new e-mobility vehicles. But lithium batteries are subject to the occasional fire and Lime, the e-scooter startup, said Tuesday that one model of its scooters appeared to light up from time to time.

The model in question is made by Segway Ninebot—Lime uses several different models in its fast-growing fleet—and Lime says that only 0.01% of its overall fleet is affected by the problem. Lime and Segway Ninebot wrote software patches to prevent riders from using 2,000 at-risk scooters until the company could pick them up and repair them. Most of the scooters were in Los Angeles, San Diego, or Lake Tahoe, Calif.

The fire department responded to an e-scooter fire at Lime’s facilities in Lake Tahoe this August, the Washington Post reports, and a Lime mechanic told the Post that mechanics were concerned about the device’s safety.

Lime also preventing its charging contractors, known as “Juicers”, from recharging that model until further notice. Juicers earn fees for collecting scooters in the evening, charging them, and returning them in the morning to points designated by Lime.

E-scooter rental companies are also facing a new class action lawsuit in a Los Angeles court over injuries to users (which include fatalities), pedestrians and public nuisance claims.

China's finance ministry calls out Xiaomi over accounting errors

FILE PHOTO: Customers wait to pay at a Xiaomi store in Beijing, China June 21, 2018. REUTERS/Jason Lee/File Photo

BEIJING (Reuters) – Chinese authorities on Tuesday said smartphone maker Xioami Corp made errors in its accounting, sending the company’s Hong Kong-listed shares down amid a wider sell-off of China tech stocks.

Xiaomi was one of several internet firms named in the annual inspection by China’s Ministry of Finance. Other firms include e-commerce giant Suning.Com Co Ltd and online game developer Wuhu Shunrong Sanqi Interactive Entertainment Network Technology Co Ltd.

Xiaomi’s stock was down 4 percent on Tuesday morning.

The ministry in its report said Xiaomi had made tax errors on corporate gifts and had incorrectly recorded some corporate costs. The document noted that the firm has already rectified the errors.

It also noted that other companies had made efforts to evade taxes by shifting their profits overseas.

A Xiaomi spokeswoman declined to comment on the report.

The rebuke comes as the company is facing teething issues following its much-anticipated listing in July. Its stock is down more than 30 percent since the initial public offering (IPO) amid a wider sell off of China tech stocks that has also affected peers Alibaba Group Holding Ltd and Tencent Holdings Ltd.

It also comes as China is making revisions to its tax code and cracking down on evasion in a wide-scale cleanup that ensnared A-list movie star Fan Bingbing among others.

Despite its tumbling price, Xiaomi has reported healthy smartphone sales in 2018. Earlier this month it said it has already surpassed its full-year sales goal of 100 million handsets.

Reporting by Cate Cadell; Editing by Christopher Cushing

IBM’s Call for Code Prize Goes to a Team With ‘Clusterducks’

You know when you try to go online at a Starbucks or on an airplane, first you get a little popup that asks you to accept some terms before you can get to the internet? That popup window exists in a sort of netherworld between actual internet connection and being offline–you pick it up via Wi-Fi, but until you click a box, you’re not actually online. A team of five developers realized in that gray area was potentially a huge opportunity to save lives.

It’s an intractable problem during natural disasters: telecommunications networks and power grids are often damaged or overwhelmed; without them, first responders struggle to help survivors, coordinate evacuations, and even count the dead. Project Owl proposes an elegant solution: an AI-powered disaster coordination platform paired with a robust communication network that can reach people even when other connections are down. The key to making it all work? Those popup windows, which the team can beam out to people in hard-to-reach areas via buoys equipped with a low-frequency Wi-Fi network.

Now Project Owl has won IBM’s first ever Call for Code contest, which challenged developers across the world to build disaster relief technology using IBM and open-source software. More than 100,000 developers from 156 countries participated in the contest. A panel of judges including former President Bill Clinton selected Project Owl from a field of five finalists whose solutions ranged from using AI to speed up the rebuilding process after an earthquake to feeding firefighters live data during wildfires via sensors.

The winners were announced at an awards ceremony in San Francisco Monday night. The grand prize includes $200,000 and IBM’s pledge to help the team make their project a reality.

“The most important thing to me will be to deploy this for real,” says Angel Diaz, IBM’s Vice President of Developer Technology, Open Source & Advocacy, who was a leading force behind Call for Code. “Usually these hacks will be one and done, but no, we are going to make this real. We are going to deploy this.” In fact, the top 10 finalists will all have their projects officially sanctioned by the Linux Foundation.

After announcing the challenge in May, IBM hosted more than 300 hackathons and events in 50 cities across the globe, and offered its technology for free to all participating teams. Developers were also encouraged to use whatever existing technology they could find; the only requirement was that their creations work. “It has to be real, it has to work, because we’re going to take this into production. We’re not running a fantasy,” Diaz says.

Project Owl hopes to have their solution ready to help in hurricanes, floods, and fires by the end of the year.

Make Way for DuckLink

When the Project Owl teammates—developers Charlie Evans, Taraqur Rahman, Nick Feuer, Bryan Krouse, and Magus Pereira—accepted their prize on Monday night, many of them were seeing one another face to face for the first time. They live spread out around America, from North Carolina to Texas to New York. Most had only met on the Slack channel IBM set up for the contest.

The idea for Project Owl’s hardware originated with Pereira, a recent graduate from East Carolina University in Greenville, North Carolina. Pereira explained an idea he’d had—one which had previously won him a competition at his university.

“Since I’m in the Carolinas, we get a ton of hurricanes. A few years ago we had a hackathon to come up with a solution to help the community,” Pereira says. “For some reason I was just thinking about communication and I had buoys in my mind.” He created the “clusterduck,” a buoy with internet-of-things-type low-frequency connectivity that could form an ad-hoc communication network in areas hit hard by natural disaster.

Together Project Owl made the clusterducks real, and created a software platform around them to allow civilians to communicate with first responders in real time. The hardware/software solution works by harnessing low-power, long-range radio frequency called LoRa, the same technology that powers most internet of things devices. By combining LoRa units with Wi-Fi routers in waterproof buoys placed throughout a disaster area, Project Owl creates a network that can link back with any rescue operation running the Owl software. If you’re in an area with no internet or cellular service and you turn on your Wi-Fi, you’ll see Project Owl in the list of available networks. Click on it, and you’ll get that familiar Starbucks-like popup. But instead of asking you to agree to terms of service, it asks for crucial information like your name, location, how you are doing, what services you need, whether you need immediate assistance or for first responders to call family and friends to update them on your condition.

Project Owl/IBM

The team built the custom Owl software in four months. So far, they have tested it with EMS and government responders in simulated environments. It has not yet been used in an actual emergency. People in a disaster area with a Project Owl network will also need to pull up their Wi-Fi settings and select the correct network themselves; the popup won’t be available if people just try to connect to cellular service.

Still, the combination of a Wi-Fi popup with LoRa connectivity is an innovative idea. It allows you to use whatever device you already own to get onto an ad-hoc emergency communication network, without even having to click on a link or download an app, both of which are often impossible without a robust internet connection. Project Owl makes the most of very low-frequency connectivity to provide a lifeline to those who would have otherwise been cut off.

The clusterducks are also not very expensive to make—about $38 each, according to the developers. To cover a metropolitan area like San Juan, Puerto Rico, which is 77 square miles, Krouse says, would require a few hundred clusterducks, for a total cost of approximately $12,000. The idea would be to roll out clusterducks in hurricane- or flood-prone areas, so that they can be easily deployed when a disaster actually strikes. Relying on solar panels and battery packs, the clusterducks network could be turned on the moment they are needed and work off the grid. They could also be sent into a hard-hit area after the fact.

Project Owl/IBM

The Owl software can be used with or without the clusterduck networks. “The software itself is an incident management system. One of the things that makes it so great and useful is that you just talk to it. It’s a conversational experience,” says Krouse, who calls it a souped-up chatbot that uses just about every single IBM Watson API, as well as a custom natural-language AI. Owl stands for “Organization, Whereabouts, and Logistics.” First responders can coordinate from the Owl application, setting up incident zones, accessing data from FEMA and the Red Cross, as well as crowdsourced user data. People can text or call the Owl management system, or type into it directly from a computer or phone.

Call for Code and the Focus on Real Help

Technology, Silicon Valley denizens have often insisted, can save the world. But recent years have given rise to a growing realization that technology is not good by default, that it can break things as much as it can fix them. IBM’s facial recognition technology, for example, has come under increased scrutiny, and the company is currently facing a class-action lawsuit for age discrimination.

Call for Code is not an explicit attempt at making amends for any past wrongs, at least not according to its organizers. But the contest, and the enthusiastic response from more than 100,000 developers, comes amidst a wider tech backlash, and at least some self-examination from major tech companies and the people they employ.

When Alexander Gil Fuentes, the digital scholarship librarian at Columbia University, reached out to big tech companies like Microsoft and Google for partnerships after Hurricane Maria hit Puerto Rico, none of them were interested in helping with mapathons to help people on the ground have accurate maps.

“We thought it would be an easy sell—tech workers taking two hours to work on helping the Red Cross would improve staff morale, we thought. Alas, none of the companies bought it, and only universities stepped up to the plate,” Gil says.

That was a year ago. To Gil, Call for Code and similar hackathons for good, like the Mozilla Challenge, show the winds may be changing.

On Monday, Google announced it will grant $25 million next year to projects that “use AI to help address some of the world’s greatest social, humanitarian and environmental problems.” The company has recently come under fire for its privacy practices and its plans for a censored search engine in China. Microsoft, which faced an internal revolt for its work with ICE this summer, announced a $40 million program called AI for Humanitarian Action last month. And so on.

With IBM, meanwhile, the Project Owl team is busy preparing to get their solution to market and figuring out the how to turn the project into an actual business. They envision some kind of model, where Project Owl manufactures the clusterducks and sells them to an organization like FEMA, and then FEMA can rent them out to municipalities on an as-needed basis.

“It started as a discussion between us and the United Nations and the Linux Foundation,” says IBM’s Diaz. “The hope is that at the end of the day, when we put the winning solution into market, into Africa, India, the US or wherever it’s applicable, when we save one life, ten lives, 100 lives, if we save one life then this entire effort is worth it.”


More Great WIRED Stories

Baillie Gifford willing to invest more in Tesla: the Times

A man walks near a logo of Tesla outside its China headquarters at China Central Mall in Beijing, China July 11, 2018. REUTERS/Jason Lee

(Reuters) – Baillie Gifford & Co, one of the top shareholders of Tesla Inc, has said it would be willing to inject more cash into the electric carmaker, the Times reported bit.ly/2PwSpuu on Monday.

“If he (Tesla CEO Elon Musk) needs more capital we would be willing to back him,” the Times quoted Nick Thomas, a partner at Edinburgh-based Baillie Gifford, as saying.

Baillie Gifford is Tesla’s third-largest shareholder with a 7.72 percent stake. Elon Musk tops the list with about 20 percent ownership of the electric carmaker followed by T.Rowe Price Associates Inc, which owns about 10 percent, according to Refinitiv data.

The backing from Baillie Gifford comes days after Tesla reported a net profit of $311.5 million in the third quarter.

Tesla and Baillie Gifford did not immediately respond to requests seeking comments.

Reporting by Philip George in Bengaluru; Editing by Gopakumar Warrier

Buy The Dip With 10.5% Yield And 141% Coverage, Conviction Buy

Co-produced with Philip Mause and Julian Lin for High Dividend Opportunities.

Source note: All tables and images from Global Partners L.P.’s website, unless otherwise stated.

Global Partners L.P. (GLP) is a master limited partnership which has re-transformed itself toward a more defensive business model. Management have done a remarkable job by positioning their portfolio and expanding retail operations. Despite this, the stock remains under the radar with double-digit yield with no credit given to the recent transformation. Coupled with a huge coverage of 141% this is one of the safest 10% yielders out there. For income investors, the shares are a strong buy.

Note that GLP issues K-1 tax forms.

In The Family

GLP was founded in 1933 as a single truck heating oil distributor. Since then, it has grown through the acquisitions of gasoline stations, convenience stores, pipelines, and storage terminals. The company is still being run by the same family, with CEO Eric Slifka leading the company founded by his grandfather 83 years ago. Let’s now look at what the company looks like today.

Boston Globe: Eric Slifka heads up the company founded by his grandfather in 1933 with one oil truck

Business Overview

GLP is an MLP which engages in midstream logistics and marketing. This is one of the nation’s leading wholesale distributors of petroleum products. GLP also is one of the largest independent owners, suppliers and operators of gasoline stations and convenience stores in the Northeast. It also is one of the largest terminal networks of petroleum products and renewable fuels in the area.

By the numbers, the scale of GLP is seen below:

Understanding The Business Model

GLP has three notable business segments: Wholesale, commercial, and retail.

Their wholesale business involves purchasing, transporting, and reselling gasoline, crude oil, and other related products to customers such as gasoline distributors, home heating oil retailers, and refiners. GLP has huge market share with 9.8 million barrels of capacity in the Northeast:

We can see that in many of their markets, GLP has acquired a market leader position:

Their next segment is their commercial business. Here they sell and deliver unbranded gasoline, heating oils, and kerosene to customers such as government agencies, large commercial clients, and shipping companies. These contracts are acquired through aggressive bidding and GLP’s massive scale allows them to win better terms over lesser scale competitors.

GLP’s final and most important business segment is the gasoline distribution and station operations (retail). This is their most important segment which has been a source of large growth, and is the reason we previously mentioned that they have made a strong move toward acquiring a defensive business model. Revenues include retail gasoline sales, rental income, and convenience store sales. One can say that customers range from station operators, gasoline jobbers, and retail customers.

You might be wondering why is the retail gas station and convenience store model so appealing? The reason is simple: Consistency. As we can see below, their product margin has been consistently rising the past decade:

Their large scale is evidenced by their 1,500 stores based spread across 11 states:

GLP’s sites operate with a variety of brand names:

GLP’s retail business has clear strategic advantages:

  • They have stable, recurring income from their rental agreements with dealer leased and commissioned agents.
  • They are vertically integrated between supply, terminating, and gas station sites.

  • They own “best of breed” locations in the Northeast.

  • They are diversified across brands, site geography, and mode of operation.

In order to accelerate growth through acquiring more retail locations, GLP has been optimizing their real estate portfolio. Because they are mainly interested in simply operating gas stations and convenience stores, GLP has engaged in sale and lease back transactions with real estate investment trusts like Getty Realty (GTY), which transfer ownership of the underlying real estate in exchange for capital which can be used to accelerate growth. As we can see below, GLP has been very aggressive in growing their retail segment through M&A:

We can see below how their three segments stack up in contributing to the latest quarter’s product margins:

Transformation of the Company

GLP has dramatically evolved their business model to have more exposure to defensive sectors which are stable regardless of economic conditions:

The above chart is very impressive! The management of GLP has re-positioned the portfolio pretty well:

  1. Eight years ago, GLP had 50% of their margins based on wholesale distribution of distillates (of which is heating oil). This portion of revenues was very seasonal and can see fluctuations based on the weather. Now this percentage has gone down significantly – only to 10%! A significant improvement.

  2. Management has re-positioned itself into Gasoline Distribution – mainly gas stations – which make up today 49% of gross margins and Convenience Stores, which make up 26% of gross margins. These businesses tend to be more stable and recession resilient and less price sensitive to the price of crude oil and heating oil. Gasoline is necessary, even during periods of economic weakness – consumers still need to drive and fill up the tank.

  3. The end result of management’s efforts is that this is now a company with a vertically integrated refined products distribution system made up of their terminal network, wholesale market, and retail gasoline stations. Why is this important? This integrated model allows them to control the product margin at each step of the value chain.

Recent Financial Results

GLP had a very solid second quarter:

  • Earnings before interest, taxes, depreciation, and amortization (‘EBITDA’) was $53.1 million compared to $51.3 million last year.

  • Distributable cash flow (‘DCF’) was $21.0 million versus $21.8 million.

  • Adjusted EBITDA was $56.1 million vs. $53.7 million.

  • Gross profit was $149.3 million compared to $135.4 million, due to improved product margins in gasoline in the Wholesale segment and station operations.

GLP also continued their strategy to expand their retail gasoline business through their acquisitions of Champlain and Cheshire. These acquisitions added 136 sites including 62 owned properties consisting of gas stations and convenience stores.

Even more good news!

  1. GLP raised its full-year 2018 guidance with EBITDA to a range of $190 to $215 million compared with a prior range of $180 – $210 million – or by 3.4%.
  2. GLP also hiked the quarterly distribution in July from $0.4625 to $0.4750 per unit, or $1.90 per unit on an annualized basis – or by 2.7%.

A Solid Balance Sheet

First, we would like to point out that the balance sheet of GLP is unique and particularly solid. It consists mostly of real estate assets (gas stations and convenience stores), in addition to inventories. The breakdown in percentages is as follows:

  1. 44% of total assets consist of conservatively valued fixed assets (strategically located, non-replicable terminals and gas stations). This gives the company property REIT-like features.
  2. 38% of other assets are “current assets” consisting of cash, inventory, receivables, deposits and prepaid items.

About leverage, debt/EBITDA was approximately 4.1 times, which is considered on the lower side in the MLP space, especially if we factor in that a big portion of borrowing relates to financing inventories. Based on their latest 10-Q, they are able to borrow at relatively competitive rates at 4.1% for their secured loans and 6.7% for their un-secured loans.

One of the safest dividends is the one that has just been raised.

As discussed earlier, GLP just raised their quarterly distribution from $0.4625 to $0.4750 per share or by 2.6%. This is the first dividend raise since 2015. Note that in 2015, GLP had to reduce the dividend following the crash in oil prices. Today, the situation has changed as the company’s profitability does not rely much on the price of oil anymore. In fact, when oil price declines, this tends to increase demand for gasoline as people are willing to drive and travel more. This also tends to generate more convenience store sales as drivers have more money in their pockets. The re-positioning of the company by management was remarkable.

Big Distribution Coverage

GLP hiked its distribution by 2.7% in August 2018 because they are seeing strong financial results, but what is the actual coverage?

Trailing twelve month (‘TTM’) DCF is $143 million. Adjusted for the non-cash tax credit, TTM DCF is $90.5 million. Based on 33.8 million shares, this works out to $2.68 in DCF per share. This suggests that the current distribution is covered at 141%. This is very strong coverage considering that other MLPs frequently see coverage much lower, between 100% to 120% times.

IDR Structure

GLP has a general partner (‘GP’) which has ownership of incentive distribution rights (‘IDRs’). These basically mean that the GP is entitled to a portion of cash flows depending on the size of GLP’s distribution. We can see how the math works below:

Based on the current quarterly distribution of $0.475, we can compute the projected IDR payments as follows.

  1. For the first $0.4625 in distributions per share, the GP gets a 0.67% cut.
  2. For the next $0.015 in distributions per share up to $0.5375, the GP gets 13.67%. This comes out to about $0.005 per share or $169,000.

In other words, buyers of the common stock at this time would not really be impacted much by the IDRs despite the huge distribution payout. The distributions have to increase significantly to a level of $0.6625 per quarter for a yield of 14.6% based on the current price for the IDR payments to become significant.

Another way to look at it is that for a purchaser at this price, GLP has to pay more than 10% yield before any IDR kicks in. Therefore the GP has every incentive to keep increasing distributions in the future to be able to meaningfully share in the profits.

High Insider Ownership 22%

The General Partner, which holds a 0.67% general partner interest in the Partnership, is owned by affiliates of the Slifka family. As of June 30, 2018, affiliates of the General Partner, including its directors and executive officers and their affiliates, owned 7,377,738 common units, representing a 21.7% interest in the company.

The Chairman Eric Slifka himself owns 1.22 million shares (directly and indirectly) representing about 4% of the company’s shares.

This is a true family business that seems to be strongly aligned with the shareholders.

Valuation

Management has given guidance for full-year 2018 EBITDA of $190 million to $215 million. We have excluded from the calculations a $52.6 million tax credit which is a one-time non-recurrent income. We did valuations using two different methods:

  1. Price / “distributable cash flow” (or DCF) valuation: Based on our adjusted DCF of $2.68 per share, GLP trades at 6.8 times DCF. This is very cheap.
  2. EV/EBITDA valuation: With $613.8 million in common market cap (based on 33.8 million shares and $18.16 share price), and $66.8 million in preferred stocks, GLP trades at a EV/EBITDA multiple of 7.8. Note the EV/EBITDA ratio is a unique and important valuation ratio that takes “debt levels” into account. Again, the valuation in this case is particularly low and attractive.

Compared to Competitors

The main comparables to GLP are CrossAmerica Partners (CAPL) and Sunoco LP (SUN). As we can see below: GLP offers the best combination of valuation and distributable cash flow coverage:

(Chart by Authors)

Don’t just look at the yields! The valuation and dividend coverage are the most important metrics. GLP is much more attractively priced than both of its competitors. It’s 12% cheaper than CAPL, and 22% cheaper than SUN by looking at the DCF metric. Furthermore, the distribution has a significantly higher coverage of 141%. GLP is attractively priced with its high yield and high dividend coverage.

12-Month Price Target

GLP is very cheap here. Our conservative price target is at 7.8 times DCF, which works out to $20.7 per share and a 9.2% yield. This is roughly 15% upside for the stock price from here.

Risks

  • GLP has a defensive business model due to its retail operations of gasoline stations and convenience stores. Still, the business has some sensitivity to the price of crude and heating oils, which is due to its wholesale distribution of distillates. If oil prices were to drastically drop, GLP may see decreasing demand for this segment. On the positive side, this segment only contributes 6% of gross margins. Furthermore, a decline in oil prices should lead to greater business in their convenience stores and gas station segments.

  • GLP has little geographic diversification as its assets are mainly in the northeast. This makes them more exposed to dangers from natural disasters or regional government regulation. That said, their business has stood the test of time and we do not expect anything to change that.
  • GLP owns a large inventory of gasoline and refined products. In case of a fluctuation in price, this can result in losses. Having said that, management has a lot of experience in handling inventory and also has hedging in place. We do not believe this is a significant risk.
  • GLP is run by the family that founded the company, so it is a “family like” business. This has both advantages and risks. The advantage is that this family has a substantial ownership in the company which usually means that they will do their best to protect the business, their reputation, and their own money. On the negative side (and based on my experience with family run businesses), families tend to make more management mistakes than non-family run businesses. This is due to several reasons including the fact that the family member taking the decisions may not be necessarily the most qualified person to make these decisions, and/or may not always listen to advice. In the case of GLP, the current CEO has done a tremendous job re-organizing the company, and I believe that he has reached a point whereby he is not only highly knowledgeable of the business, but also a very well seasoned CEO.

Recent Pullback Creates a Buying Opportunity

GLP has hiked its distribution in August 2018 by 2.6%. Despite this, the stock has pulled back along with the general markets by over 13% creating a unique buying opportunity:

Bottom Line

Global Partners LP runs a highly profitable operation. It has a unique business model and benefits from its vertically integrated assets. This also is a defensive business model that can do well in good and in bad times.

I have always admired this company’s resilience and its generous dividend distributions. Today dividend investors have the chance to buy into this great company at incredibly low valuations. Not only the price has recently pulled back, but it also does not reflect either the magnificent transformation that management did or the resulting stronger outlook and guidance, offering a unique opportunity.

This is possibly one of the safest 10% yielders out there because of its high coverage of 141%. This could very well be one of the biggest winners in your high-yield portfolio.

Note: The common shares should go ex-dividend around the 8th of November or in less than two weeks.

Another High Conviction Buy: The Preferred Stocks

GLP recently issued approximately $66.8 million in 9.75% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units, which they used to reduce their debt levels.

We view GLP as a relatively defensive stock. However for income investors who are extra conservative, we recommend another Conviction Buy, the preferred stock of GLP:

Global Partners, L.P., 9.75% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (GLP.PA)

  • GLP-A has a par value of $25 per unit. It currently trades at $25.30/share.
  • The coupon is at 9.75% per annum.
  • It’s redeemable at the issuer’s option on or after 8/15/2023 at $25 per unit plus accrued dividends.
  • This is a perpetual Preferred Share with no stated maturity.
  • The shares are cumulative, and therefore, if for any reason they are suspended, the unpaid preferred dividends “accumulate” perpetually. This adds another layer of protection to preferred shareholders because this means that before the common dividends can be once again resumed, all accumulated preferred dividends must first be paid out.
  • The amount of the dividend is $2.4375 per annum or $0.609375 per quarter. It’s paid quarterly on the 1st of February, May, August and November each year. The ex-dividend is on the last business day of the previous month. So the next ex-dividend will be next Wednesday on October 31.
  • The most important feature: On and after 8/15/2023, the dividend will become based on a floating rate, calculated based on three-month LIBOR plus a spread of 6.774% per annum. This adds a big protection against rising interest rates. In today’s terms, with Libor being around 3%, the yield should be at 9.77% even if interest rates do not rise further.

GLP-A was trading at $26.30 a share just three months ago. Today it’s trading at around $25.50 for a yield of 9.7% creating a unique buying opportunity!

Global Partners (NYSE:<a href=


Source: Yahoo Finance

We believe this is one of the best preferred stocks in the market today to invest for the long term. The dividend is enormous compared to the relative lower risk level it carries. Plus because of its floating rate, it carries some protection against rising interest rates. The recent pullback has created an opportunity.

  • Advantage of the Common to the Preferred: More upside potential, and a great yield.
  • Advantage of the Preferred over the Common: Less upside potential, but less price volatility and still a huge dividend that is even safer than the common. Conservative investors are advised to buy this issue for the juicy yield and also for some upside potential.

Great stock! Great investing!

A note about diversification: To achieve an overall yield of 9% and optimal level of diversification, at High Dividend Opportunities, we always recommend a maximum allocation of 2% to 3% of the portfolio to individual high-yield stocks like GLP, and 5% allocation to high-yield exchange traded products (such as ETF, ETNs and CEFs), which are products that hold a large basket of stocks or bonds. As part of a risk management strategy, we do not recommend exceeding this allocation no matter how good the opportunity is.

If you enjoyed this article and wish to receive updates on our latest research, click “Follow” next to my name at the top of this article.

Disclosure: I am/we are long GLP, GLP.PA.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

5 Strategies to Help Direct a Passive-Aggressive Boss

You’ve probably met a person in your life who constantly gave you the cold shoulder, indirectly insulted you, or frequently avoided important events. Interactions can leave you feeling overwhelmed and even unsure of how to manage your relationship with them. If you have, then you’ve experienced someone who displays passive-aggressive behaviors.

A passive-aggressive person is generally someone who expresses their dislike or anger towards something in an indirect manner. They may not say exactly how they feel directly to you, but often times you can feel the negative energy they’re releasing. While it’s frustrating to deal with a family member who acts this way, it’s even harder to deal with your boss who does the same.

Here are a few ways to manage a passive-agressive boss or manager. 

Don’t retaliate.

It’s a natural reaction to strike back when you feel threatened. We oftentimes want to show them how it feels and hopefully, they’ll see how they’ve been treating us and stop. However, trying to get even won’t make them respect and appreciate you more as a person.

If anything, they’ll do it more because they believe that’s how you want to communicate.

Instead, continue to display emotional control and only display behaviors that you want to see around you, even if temptation feels hard to resist. I’ve found that counting for a few seconds while focusing on my breath helps to regain my thoughts.

Be compassionate.

Passive-aggressive behavior stems from a person not knowing how to properly address conflict and concerns. Although it usually isn’t done purposely, that doesn’t mean you should pretend it’s not happening. This sort of behavior will eat away at your mental and emotional wellbeing.

It can lead to your own depression if the situation doesn’t digress. So, when feeling compassionate for them because they lack emotional maturity, make sure to always be aware and attentive to your own mental needs.

Confront them in a nonjudgmental way.

If one of your concerns with them is that they’re always withholding information and trying to remain elusive, then it’s likely they’re struggling with being an effective leader. You may have to address them. Know that they likely won’t conclude that they’re the problem.

When you’re confronting them, make sure you’re in a private place and you approach delicately. I’ve found that asking about a specific incident and going from there helps. For instance, saying something like, “I have been struggling with ___ and would like to fix this. What can we do to get there?”

I know it doesn’t seem fair that you have to hold your boss’s hand through their journey, but they’re a person too. You want them to trust you so they will find it easier to communicate with you.

Set clear expectations.

If your boss acts passive-aggressively when it comes to giving feedback, you’ll have to the lead. First, you’ll need to talk to them by referring to a specific situation where you would’ve really valued their honest feedback. Then set bi-weekly meetings to discuss your progress on projects and ways to improve.

Even if they haven’t given you clear feedback throughout the week, they know they’re accountable for giving it to you during your meetings.

Start looking for new opportunities.

If you’ve tried all of the above and nothing seems to be working, consider looking for new opportunities. If you love the company you’re at and don’t want to leave, see if you can get transferred to a new team for a lateral career move.

However, if you’ve noticed that all the leaders at your job seem to display the same behaviors, then it’s time you start looking for a new job at a different company. There comes a time where you have to accept that you did your best and it’s time to move on, not only for your professional life but also for your mental and emotional health.

I know it’s frustrating to feel like you have to walk on eggshells with a grown-up, but not everyone you’ll cross paths with in life will have the same emotional maturity as you, even if that person is professionally above you. Try to help them like you would a family member. If all else fails, it might be time to dust off your resume.

3 Reasons Why Los Angeles Could Become the Nation's Next Tech Hub

Los Angeles, a city known for its glitz, glam and its title as the undisputed entertainment capital of the world, has another industry hidden up its sleeve: a thriving, rapidly growing tech ecosystem.

At a time when startups, prominent tech figures from Tim Ferriss to Peter Thiel, and employees alike are all beginning to find homes outside the Silicon Valley, the race for becoming the next tech hub in the United States is on. For a variety of reasons, Los Angeles is well-positioned to take that crown.

Here are a handful of reasons why.

1. Los Angeles is the manufacturing capital of the United States.

Believe it or not, the manufacturing capital of the USA isn’t Pittsburgh or Cleveland or Philadelphia – it’s actually L.A. In fact, the Bureau of Labor Statistics estimates there are around half a million manufacturing jobs in Los Angeles alone.

Because of its manufacturing capacity and access to resources, L.A. is positioned particularly well to become the go-to hot-spot for hardware startups in the United States. There are already organizations in place that have capitalized on this opportunity.

One example is Make in L.A. Located in San Fernando Valley, Make in L.A. is a private accelerator and venture capital fund focused on bringing hardware startups to market all under one roof. The program is all housed within southern California’s largest coworking space and partner organization, Toolbox LA, where members of the program can refine prototypes in the makerspace, clarify go-to-market strategies, sharpen their value propositions and network with fellow founders without ever having to leave the building. Specifically, Toolbox LA is a community-driven workspace that includes an event space and a biotech incubator in addition to the makerspace and hardware accelerator provided by Make in L.A. 

Lastly, with hardware companies like Google Hardware, Ring and uBeam leading the charge, aerospace giants like SpaceX and JPL putting down roots in LA, along with innovative startup models like the one implemented at Make In LA, the hardware startup scene in southern California looks more than promising.

2. The city has full support from its mayor.

In early October, the Mayor of Los Angeles, Eric Garcetti officially kicked off the start of Manufacturing Week.

With over 400 Los Angeles techies, entrepreneurs and social workers in attendance, the event was just one of many measures Garcetti is backing to promote a healthy tech ecosystem. Make It in L.A., a non-profit dedicated to helping hardware entrepreneurs make their products a reality, and Grid110.org, an incubator and accelerator for startups in downtown Los Angeles, are a couple other examples.

3. There’s a $155 billion valuation in Silicon Beach.

According to a recent study conducted by MediaKix, the Silicon Beach – the name given to the startup scene in Santa Monica, Venice, Playa Del Rey and Culver City – alone is now valued at $155 billion. This is largely thanks to companies like Dollar Shave Club, Headspace, Hulu, and Snap setting up shop in the area.

Additionally, it’s no surprise that the beach lifestyle of the Silicon Beach is appealing to younger workers, making it easy to “snipe” young talent from slower, arguably less exciting areas such as the suburbs in Cupertino and Mountain View. With a favorable climate and ocean view, it won’t be difficult for companies to sway talent to relocate to the Silicon Beach upon their college graduation.

4. There’s a wide variety of entrepreneurs.

Because L.A. is the world’s epicenter of entertainment, it’s comprised of everyone from filmmakers to musicians to stand-up comedians, resulting in a unique blend of creatives and entrepreneurs in Los Angeles that isn’t as prevalent in other areas of the country. Now, with the proliferation of the L.A. startup ecosystem, these same individuals have the potential to bring their creativity to the tech world.

I’ve experienced this first hand upon moving down from the Bay Area to L.A. Having lived in five states and over 20 cities, there truly is a unique sense of grit and hustle embedded in people’s DNA down here. A hustle that has, more than likely, culminated as a result of waitresses anxiously waiting for their next audition or an aspiring musician working night shifts until they get their big break–and it’s exciting to see that same tenacity bleeding over into the startup world.

While the Silicon Valley still remains the icon of the startup world, which city will house the next wave of tech entrepreneurship still remains up in the air. With its manufacturing capacity, immense funding, support of its mayor and culture of grit and hustle, LA seems like it could very well be the front-runner.

A very special thanks to Raychel Espiritu for providing insight and research for this article.

STEM Candidates Can't Deliver Everything You Need. Success Requires Employees From the Arts.

I love STEM. Without STEM students, there wouldn’t be doctors, or the engineers who put together the Inc.com site. Big data has revolutionized the way business is done, and it would be impossible without STEM skills. But when young people ask me what they should study, I always encourage them to consider liberal arts.

Businesses will need people to translate computer language into human language. When big data analytics uncovers a hidden pattern, someone needs to draw conclusions from the information and develop an action plan. If a robot breaks down, someone needs to explain to management why it happened – and why it won’t happen again.

Here are more reasons why you should hire someone from the arts:

1. Fresh Perspective

Hiring an artist is like getting an injection of creativity. Leaders can use this to better market to their customers, and to better connect with their employees. Artists aren’t afraid to be unconventional, but they have no time for inauthenticity. Having these elements as part of your company culture is a great way to attract high quality candidates, and will appeal to the right kind of customers.

2. Agility, with Mission Focus

3. Budget Management

The arts are chronically underfunded. If you’re looking for an employee who can stretch the value of a dollar, the arts are a great place to look. Artists use their creativity, open-mindedness, and pain tolerance to make it work. They’re able to stay on course no matter the budgetary constraints, and produce something that looks and feels like money was no object.

4. Personality Tolerance

The arts are full of people with personality – and the spectrum of personality is wide! Imagine putting together a theatre production. You have to work with an idealistic writer, a Method actor, a union stagehand, and a theatre director trying to keep donors happy. People in the arts are used to handling a variety of personalities and balancing competing interests while keeping everyone happy and working together. It’s a skill any office can benefit from, and can help keep your company humming.

5. Content Over Medium

This is perhaps the most important reason you should hire someone from the arts. With constantly changing technology and evolving tastes of customers, it can be difficult for business to find the right way to connect with employees and consumers. But here’s what many business leaders forget: the method of communication doesn’t matter if the content is garbage. To reach your desired audience, your content needs to make an impact. Artists are expressive, and know how to use humor, trauma, and beauty to make an emotional impact on the audience. No matter the medium, artists can effectively communicate your message, helping your culture blossom and your business grow.

Chipmaker SK Hynix posts record third-quarter profit

SEOUL (Reuters) – South Korea’s SK Hynix Inc posted record third-quarter operating profit on Thursday, beating expectations thanks to a seasonal sales boost for mobile devices and strong server demand.

FILE PHOTO: The logo of SK Hynix is seen at its headquarters in Seongnam, South Korea, April 25, 2016. REUTERS/Kim Hong-Ji/File Photo/File Photo

The world’s second-biggest memory chipmaker behind Samsung Electronics Co Ltd said July-September profit rose 73 percent year-on-year to 6.5 trillion won ($5.7 billion). That compared with a 6.3 trillion won average forecast drawn from 19 analysts, according to Refinitiv data.

Reporting by Ju-min Park and Heekyong Yang; Editing by Stephen Coates

LeBron James Is More Than an All-Time Great—He’s a Mogul

The LeBron James era in Los Angeles began, predictably enough, with all the flash and drama of a Hollywood blockbuster: a home-court introduction from rapper-actor Ice Cube, a slew of replay-worthy dunks, and an end-of-game fracas against the Rockets that culminated in a miasma of ejections, suspensions, and fines. Just as predictably, the LeBron James era kicked off with a trio of losses—what, according to critics, is expected to be the first of many. As a three-time NBA champion and seven-time MVP, James is among the most dominant players to grace the hardwood. Still, for the first time in nearly a decade, his supernova talents likely won’t be enough to catapult his team into the finals.

What is less questionable this season, however, is James’ off-court presence. He has just as effectively proven to be the rare multi-hyphenate athlete whose impact extends well beyond the league—it’s LeBron as activist, philanthropist, and emergent business titan. In moving to LA as part of a much-ballyhooed four-year, $154-million deal, James fully positions himself as an enterprise of change, a one-man orbit whose aspirations signal a new kind of moguldom for athletes: one centered on social good.

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Nearly since his entrance into the NBA in 2003, James has moved with the eyes of the crowd on his back. He’s a populist, if decisive, figure who has done more to shape the league, and the image of its athletes, than just about any player: rekindling the superteam era by joining Chris Bosh and Dwyane Wade on the Miami Heat in 2010; testing our understanding of the athlete-activist by wearing an “I Can’t Breathe” t-shirt to honor Eric Garner in 2014; calling President Trump a “bum” on Twitter last year for using sports as a dividing force instead of a unifying one.

Each of those actions has come after careful consideration; for an athlete who makes in excess of $50 million yearly from endorsements, voicing conviction is always a calculation. For James, though, legacy has always trumped risk. And in signing with the Lakers, besieged as they are by unrealized potential, he made the ultimate legacy play, one that stands to immortalize him while also solidifying his footprint as an influential Hollywood executive.

When James founded production company SpringHill Entertainment with his childhood friend Maverick Carter in 2015, the original idea was to leverage the athlete’s star power from behind the camera; a move that would allow the company to slowly find its own identity outside James magnetism. Early on, though, SpringHill safely flirted with sports biography: including a prize-winning documentary about James’s high school days, More than a Game, and I Am Giant, which chronicled the trials of former NFL wide receiver Victor Cruz. Even scripted shows, like Showtime sitcom Survivor’s Remorse, paralleled James’ rise out of adversity to basketball phenom.

What’s on tap for SpringHill in the coming year, though, seems more in line with James evolving, socially-conscious moguldom. In addition to HBO’s The Shop—an unscripted series where James and his famous friends (Odell Beckham Jr, Snoop Dogg, Drake, and Candace Parker among them) confab in a barbershop about adulthood, racial expectations, and more—the company is currently developing a limited-series starring Octavia Spencer as Madame C.J. Walker, the first black woman millionaire (it was acquired by Netflix); a documentary about the controversial champion boxer Muhammad Ali; Lean On Me, a CW drama inspired by the 1989 film that follows a young educator trying to “transform a failing campus into an urban oasis;” and a three-part HBO documentary about the athlete’s role in the political sphere titled Shut Up and Dribble. (The company also has shows in development with NBC, Starz, and Facebook.)

It’s hard to pinpoint exactly when James had his political awakening. He was raised in a single-parent, paycheck-to-paycheck household in Akron, so it’s likely he’s always understood the weight of his skin, and the consequence it carries in America. But as his foray into television and film has continued, each project has functioned as a conduit, even a conversation starter, for larger messages around race, politics, and social justice. Within each of these undertakings is a push for wider representation, a calculated gamble that seeks disruption and balance behind and in front of the screen.

James’s growing reach, of course, extends past these projects—he’s reportedly in talks to produce a Friday the 13th reboot—and even past the glint of Hollywood. This summer, in July, he opened the first I Promise educational facility in a bid to revolutionize public education. An Akron-based non-charter school that plans to do more than just educate students, its offers what administrators refer to as “wraparound” services—each student is supplied with a Chromebook and a bicycle, has access to the school’s pantry, is provided with job and family services, tutors, as well as emotional and psychological services. All graduates are guaranteed free tuition to the University of Akron beginning in 2021. “When people ask me why a school, it’s because I know exactly what these 240 kids are going through,” James said in a speech during the school’s opening ceremony. “I’ve been there.”

Increasingly, as players have invested in outside entities—most noticeably, the Golden State Warriors’ Kevin Durant made a series of investments in Silicon Valley startups, following the lead of his teammate Andre Iguodala—James has continually bet on himself. It reminds me of what he said during his I Promise speech: about having been there. Having accrued the experience to know what it would eventually take to make a lasting imprint. It’s about opportunity and representation. It’s perhaps James’ most vital lesson, the one that will define his legacy: In trying to change a system, he built—and became—his own.


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