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Weekly Wrap: Hubub at Apple

Fri, 2014-09-12 13:14

Felix Salmon from Fusion and Leigh Gallagher from Fortune Magazine talked with Kai Ryssdal about the week that was: Does the looming Alibaba IPO spell trouble or fortune? Is the Apple Watch worth all the hubub? Is the era of small cell phones at an end?

Listen to their conversation in the audio player above.

A spot of . . . coffee?

Fri, 2014-09-12 13:14

Here's a quiz for you: Who do you suppose drinks more coffee? Police officers or journalists?

The easy answer is cops. It's also wrong.

A study over in the UK has journalists edging out police officers and interestingly teachers at just over four cups a day.

Mentioned nowhere in this British survey?

Tea.

Writing a recipe for change at Olive Garden

Fri, 2014-09-12 13:14

Darden Restaurants helped put “casual dining” on the map with family-friendly chains like Olive Garden and, until the company sold it this summer, Red Lobster. But the weak economy and competition from “fast casual” chains like Chipotle have taken some of the zip out of the company. Now, an activist hedge fund that’s fighting for control of Darden’s board has offered nearly 300 pages worth of suggestions for reviving the brands — right down to the way they boil water.

For a taste of Starboard Value’s suggested fix for Darden Restaurants, check out slide number 164: Add salt. The hedge fund says Olive Garden stopped salting its pasta water to get a longer warranty on its pots, calling the decision "appalling."

"It’s very important, because otherwise if you don’t salt the water, the pasta that you cook in it won’t have any flavor in it," says Italian cookbook author and teacher Giuliano Hazan, who says he is not, personally, familiar with Olive Garden’s cooking.

Starboard Value has other problems with the food. Another slide complains that authentic Italian dishes like Tortellini Fizzano have been replaced by the likes of “fried lasagna bites.” The legendary “endless” breadsticks have lost their taste, the investors complain. And, they’re flowing a little too freely.

“Bread, of course, is cheap if you look at it individually,” says Ron Ruggless, Southwest Bureau Chief for Nation’s Restaurant News. Multiplied by the Olive Garden’s 840 locations, he says, “that’s a lot of dough.”

A slide from the Starboard mega-presentation showing locations of Olive Gardens across the United States.

Starboard

Starboard has some meatier suggestions, like spinning off real estate into a separate company and expanding internationally. In a statement, Darden’s president Gene Lee says the company remains “open-minded” to new ideas, and that many of the strategies “are already being implemented across our company and are showing results.”

Shareholders will vote next month on who will control the board. Analysts say casual dining — once the “darling” of the restaurant business—has lost favor with customers who are choosing less expensive “fast casual” restaurants like Panera and Chipotle.

Another slide from the Starboard presentation for Darden, showing the average Yelp ratings for Olive Gardens across the United States.

Starboard

“Regardless of who wins the battle, those problems don’t go away,” says Robert Derrington, restaurant analyst with Wunderlich Securities.  “There’s essentially too many restaurant choices for consumers, and when they’re tight with their spending, if they want to dine out, they’ll spend where they can afford to dine.”

According to market research firm NPD Group, visits to casual dining restaurants have dropped by more than half a billion annually in the last five years, “which doesn’t seem like a lot,” says analyst Bonnie Riggs, “but it’s quite a few lost visits.”

Seven suggestions from Starboard's presentation

Cut down breadsticks 
For the last ten years, Olive Garden servers have been told to practice the ritual of placing one breadstick per guest, plus an extra one for the table. If you've been to an Olive Garden recently, you know that's not the case. Starboard says waiters currently hand out breadsticks in excess, causing an enormous amount of waste. They think with fewer breadsticks on the table, waste will decrease and customers will have more room for appetizers and desserts.

Add salt
To protect their pots, Olive Garden has stopped adding salt to the water it uses to cook pasta. This has significantly "deteriorated" the quality of Olive Garden's pasta which Starboard feels "results in a mushy, unappealing product that is well below competitors' quality despite similar cost."

Stop dressing the salad
The amount of waste produced from Olive Garden’s famous endless salad also concerns Starboard. They think “salads should be lightly dressed, potentially with a bottle of dressing placed on the side.”

Use cheaper containers 
Darden uses containers that Starboard believes are the “Cadillacs” of the industry. To-go bags are made with high-end material. Takeout containers have their own luxurious factor by being microwavable and dishwasher safe. From a business standpoint, Starboard believes they should downgrade to at least a “Chevrolet Hatchback” of containers.

Reduce menu options 
Starboard thinks the Olive Garden and Red Lobster menus have too many items on them, making the process of selecting a dish too complex. The complexity, in turn, has led to higher costs and inefficiencies.

An app…or some technology that appeals to millennials 
Darden’s brands need to adapt with the times in order to grow, argues Starboard. They suggest adding an app for their brands to appeal to younger customers. In their words: “Olive Garden is the 800-pound gorilla of Italian casual dining, but is a dinosaur when it comes to using technology in branding and marketing.”

A richer alcohol selection
Starboard also thinks a change in the restaurants' wine selection is necessary. They believe Darden should pull wine from Italy, Napa and Washington, to name a few, because after all, “wine is an integral part of the authentic Italian family dining experience.”

"Longmire" lost out because of its older viewers

Fri, 2014-09-12 13:14

A&E is dropping the show "Longmire," even though it’s the second-most popular show on a cable network. This begs the question: why? It’s too old. Or more specifically, the median age of the show's viewers is 60, and advertisers aren’t interested in them.

It’s an age-old notion in advertising, that youth consumers are more valuable than older ones. There’s lots of reasons why advertisers think that, but one of them is, well, they’re young and they like to try — and buy — new things. Unlike old people, right?

Erin Read of the marketing firm Creating Results says that’s not true.

"There are a few myths when we talk about older people," Read says. "Older adults are stuck in their ways. They’re not going to try new brands. So why should I even bother advertising to them, right? Well, my grandmother would say, ‘Pshaw!'"

Reed says those stereotypes might have been true 50 years ago, but boomers are breaking them and shaking up their lives in ways that previous generations didn't.  

“They’re moving houses, their kids are leaving home, divorce,” she says. And all those changes are opportunities to try new brands and experiences.

People are also living longer, and they're more active. Cassie Mogilner, a marketing professor at Wharton, says that's affecting their consumer behavior.

 “Among older people who feel like they have a lot of time left, they’re actually behaving very much young people,” Mogilner says. “They’re looking for excitement as opposed to calming things.”

And like young people they’re willing to buy new products and experiences that bring that excitement. There is one big difference between young and old, says marketing consultant Kurt Medina.

“50-plus-ers account for something like 75 percent of all disposable income in the United States,” he says.

By side-stepping TV shows like "Longmire," Medina says, advertisers are missing the money pot.

How advertisers target younger versus older audiences

Chevrolet has taken on older target audiences in its ads, which feature a somewhat different tone than their commercials aimed at young consumers:

Versus:

What can the U.S. do to attack ISIS financially?

Fri, 2014-09-12 13:14

In his prime-time speech Wednesday night, President Obama outlined how he plans to attack the terrorist group ISIS militarily. But he said less about economic sanctions against ISIS. So the question remains: can the U.S. punish ISIS economically? 

Cash gushes into ISIS from lots of places: international donors, extortion from people in places it controls and black market oil sales. ISIS gets the oil from fields it captured in Iraq and Syria. So, one way to attack their finances would be to just go after that territory.

"[In Iraq] a number of oilfields were actually recaptured by the Iraqi army or Kurdish forces," says Robin Mills with Manaar Energy in Dubai, "and that obviously is the most direct way of preventing ISIS obtaining oil and selling oil."

Otherwise, your chances of closing the ISIS oil spigot are pretty limited. After it's pumped, Mills says the oil is trucked over the mountains to Turkey, where it melts away into a vast black oil market. But what about finding ISIS's rich donors, and hitting them with penalties and sanctions? Turns out, the ISIS benefactors are very hard to find.

"I think it's much more unclear who these people are, how they operate, where any assets they have might be," says Adam Slater, a senior economist at Oxford Economics.

Here's the other thing: ISIS is frugal. It doesn't need much money to function.

"They're not buying equipment, they're seizing equipment," says Ben Connable, an international policy analyst at the Rand Corporation. "They're not hiring people at high salaries.  They're purposefully hiring people at relatively low salaries."

So even if the U.S. did have clear, effective ways of cutting off the money, Connable says ISIS could still survive for a long time.

Portland's housing problem

Fri, 2014-09-12 11:18

Outsiders may think of Portland as its caricature on the comedy series "Portlandia," and picture great coffee, upscale restaurants, and a downtown boom.

But underneath that, Portland's wrestling with something many cities face when they grow: How to remain affordable.

The S&P/Case-Schiller Portland Home Price Index.

What's different in Portland, compared to the rest of the United States, is the law. Oregon is one of two states that doesn't require developers to set aside affordable housing when they build.

In the past, housing argued against proposed laws to include affordable housing requirements.

Jon Chandler, the CEO of the Oregon Homebuilder's Association, spoke recently with The Oregonian, a newspaper based in the area.

He didn't think politicians were invested in changing the law, "They're very serious about being seen fixing it, but they don't get serious about actually doing it."

There's another view in Portland, which is 76 percent white, that much of this is about race.

"Even now you're looking at that 'Portlandia' image, about how I'm a sober cycling vegan," says community activist Cameron Whitten. "There is that image that people come here for ... and at the same time, I've seen erasure. I've seen actual invisibility and silence of these communities that have been marginalized. That have identities that have not been celebrated in the same way that we've celebrated all these other things about Portland."

Can Uber replace your car?

Fri, 2014-09-12 11:15

About two years ago Kyle Hill sold his car. For anything over 3–5 miles away, he calls an Uber. 

He lives car-less in Los Angeles, the city of cars. Is his decision really feasible?

Kyle did some calculations and came up with "A Financial Model Comparing Car Ownership with UberX (Los Angeles)."

About two years ago I sold my 2000 Lexus GS 300 and replaced it with a sleek single-speed Pure Fix commuter bike. Two years later, I still bike to work every morning. And for anything over 3–5 miles, or when I’m just not feeling up for the workout, I call an Uber. I love the safety and convenience of Uber, the overall quality of their cars, and especially as a young black male, the peace of mind that I’ll never again have to deal with the police.

Tech IRL: Visiting TechCrunch Disrupt

Fri, 2014-09-12 10:59

Lizzie O’Leary talks with Marketplace Tech host Ben Johnson about the future of start-ups. Ben was in San Francisco this week at an annual event called TechCrunch Disrupt. It's part-Silicon Valley mogul party, part-start-up popularity contest, but it's also an event where venture capitalists and others get a sense of the future of start-ups ... and maybe invest.

Ben and the rest of the Marketplace Tech team will be highlighting what stood out from TechCrunch Disrupt over on their website throughout this week

Appetite for vocation

Fri, 2014-09-12 10:36

What motivates you to be successful? How far are you willing to go?

James Ellis dropped out of high school then … moved to New York City. He was determined to succeed. By any means necessary. After emails, letters, and phone calls failed to get him in the door, he decided a more direct approach was his only option. All he had to do was barge into a secure building, rush past the guard, and make it to the third floor undetected.

James Ellis and Steve Fritz on taking risks, not playing by the rules, and Guns N' Roses.

We're paying more for butter and milk. Way more.

Fri, 2014-09-12 09:30

Prices for dairy products like butter and milk have risen to record highs in the past few months in the U.S. due to a number of global factors, reports the BBC.

Prices for milk futures on the commodities markets have risen 26 percent over the last year, while the average price for a gallon of milk has risen about 5.7 percent to $3.64 in August, according to the U.S. Bureau of Labor Statistics.

The price of butter has also risen sharply, with U.S. customers seeing a 62 percent increase compared to last year, with an average price of $2.75 per pound for the second week of September.

The report from the BBC cites a number of possible reasons for the price increases, including a decrease in government regulation that depleted surpluses, greater demand from China, a drought affecting New Zealand's dairy farms and greater demand for pizza in the Middle East.

There may be some relief on the horizon, however, in the form of Russian sanctions. From the BBC:

In August, Russia implemented a one-year import ban on dairy and other food products from the European Union, US and other Western nations in retaliation for economic sanctions over Russia's role in the Ukraine crisis.

That removed an estimated $6.6bn (£4bn) in annual dairy trade from the global market. In 2013, the EU alone exported $3bn of dairy to Russia, of which cheese accounted for more than one-third.

In response, the European Commission has announced it will provide financial support to the dairy industry, subsidising private storage of cheese, skimmed milk powder and butter until they can be sold at a later date.

The glut of dairy products has weakened the international market and caused prices in Europe to drop.

U.S. dairy consumers could see similar relief in 2015, when suppliers start to build up surpluses once again.

The sweet story behind the U.S. Senate 'candy desk'

Fri, 2014-09-12 08:44

U.S. Senators, as one might surmise, rarely pass up an opportunity to tout their home states – what businesses are based there, what products are made there – and that trait is on display in an unusual place. It's at a spot in the back of the Senate chamber, known as the “candy desk.”

The history of the U.S. Senate’s candy desk goes back to 1965. Donald Ritchie, the head of the Senate Historical Office, says Sen. George Murphy (R-CA), “an old song-and-dance man,” had a sweet tooth.

“Sen. Murphy filled his desk drawer with candies, which he dipped into,” Ritchie says. “And then he invited his colleagues to stop whenever they wanted to.”

Murphy lost his seat in 1970, but the tradition continued. The desk, which is right by the main door to the Senate chamber, currently belongs to Sen. Mark Kirk (R-IL). “You have a chance to sell your state’s products there,” he says. “Or talk about stuff.”

Today, it is chock full of candies manufactured in the Land of Lincoln. For Kirk, a fan of Chicago’s Ferrara Candy Company, it’s personal.

“They offered me all of the desks on the Republican side, and I wanted to make sure that those bastards in Hershey, Penn., couldn’t get the candy desk,” he says, laughing.

Kirk is referring, of course, to the Hershey Candy Company, which had a monopoly on senators’ sweets for years. The desk used to belong to Rick Santorum, and the former Republican senator from Pennsylvania filled it with Kit Kats and Kisses.

I asked all 100 senators to name their favorite candies, and they all seem partial to what is manufactured back home. New Hampshire’s Jeanne Shaheen likes dark chocolate salted caramels from Granite State Candy, for instance. Georgia’s Jonny Isakson likes Snickers, which include, he points out, Georgia peanuts.

The desk has suited some senators better than others. George Voinovich represented Ohio, a state not known for its confections. So, his tenure at the candy desk didn’t last long. “I think it was one year,” he recalls. “That was enough.”

George LeMieux used to sit at the desk. “I used to joke that it was an unfunded mandate that I had to provide candy for the rest of my senators,” he says. “But I was happy to do so.”

Kirk, the man currently charged with filling the candy desk’s drawers, likes Jelly Belly-brand jelly beans, and there are plenty of those in the candy desk, but he also stocks it with baby aspirin. He had a stroke in 2012, and a small daily dose of the pain killer, he tells his colleagues and constituents, can prevent strokes and heart attacks.

While this means there is less room for Illinois candy, Kirk is able to draw attention to another constituent: the company that makes the aspirin is based outside of Chicago. 

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The preferred candies of your elected officials

They may not be in charge of the candy desk, but we wanted to know anyway: What are your senator's favorite sweets? Below, a yearbook of the candies that melt hearts and minds:

Tammy Baldwin

D-Wisconsin

Ghiradelli Intense Dark 72% Cacao Twilight Delight Singles Richard Blumenthal

D-Connecticut

Wint-O-Green Life Savers Roy Blunt

R-Missouri

No comment John Boozman

R-Arkansas

Jelly Belly jelly beans Sherrod Brown

D-Ohio

Milky Way Ben Cardin

D-Maryland

Goetze's Original Vanilla Caramel Creams Tom Carper

D-Delaware

York Peppermint Pattie Bob Casey

D-Pennsylvania

Hershey's Milk Chocolate Bars Tom Coburn

R-Oklahoma

Hot Tamales Thad Cochran

R-Mississippi

Chocolate covered peanuts Susan Collins

R-Maine

Maine maple sugar candy Mike Crapo

R-Idaho

Snickers Dick Durbin

D-Illinois

Dark Chocolate Snickers Mike Enzi

R-Wyoming

Big Hunk Dianne Feinstein

D-California

See's Candies Dark Chocolate Jeff Flake

R-Arizona

3 Musketeers Kirsten Gillibrand

D-New York

No candy Tom Harkin

D-Iowa

Brach's Hard Candy Orrin Hatch

R-Utah

Jelly beans Martin Heinrich

D-New Mexico

Dark chocolate with sea salt Dean Heller

R-Nevada

Cinnamon bears Mazie Hirono

D-Hawaii

Snickers John Hoeven

R-North Dakota

Life Savers Gummies Johnny Isakson

R-Georgia

Snickers Ron Johnson

R-Wisconsin

Milky Way Tim Johnson

D-South Dakota

Chocolate Tim Kaine

D-Virginia

No candy, Dr. Pepper Angus King

I-Maine

Peppermint Mark Kirk

R-Illinois

Jelly Belly jelly beans Mary Landrieu

D-Louisiana

Snickers Patrick Leahy

D-Vermont

Anything chocolate Mike Lee

R-Utah

Jelly beans Joe Manchin

D-West Virginia

Peanuts Ed Markey

D-Massachusetts

Milky Way Dark Mitch McConnell

R-Kentucky

No candy Robert Menendez

D-New Jersey

Dark Chocolate M&M's Barbara Mikulski

D-Maryland

No candy Jerry Moran

R-Kansas

Peanut M&M's Chris Murphy

D-Connecticut

Twix Patty Murray

D-Washington

Dark chocolate peanut butter cups Bill Nelson

D-Florida

None Rand Paul

R-Kentucky

Snickers Jack Reed

D-Rhode Island

Baby Ruth Harry Reid

D-Nevada

Nuts James Risch

R-Idaho

Butterfinger Jay Rockefeller

D-West Virginia

Baby Ruth Marco Rubio

R-Florida

No comment Bernie Sanders

I-Vermont

No comment Brian Schatz

D-Hawaii

Cinnamon hard candy Chuck Schumer

D-New York

Snickers Jeanne Shaheen

D-New Hampshire

Red licorice and chocolate salted caramels from Granite State Candy Jon Tester

R-Montana

Butterfinger John Thune

R-South Dakota

Twin Bing Pat Toomey

R-Pennsylvania

3 Musketeers Mark Udall

D-Colorado

Toffee from Enstrom Candies (Grand Junction, CO) Tom Udall

D-New Meixco

Dark chocolate spiced with New Mexico red chile John Walsh

D-Montana

Baby Ruth and Milky Way Midnight Elizabeth Warren

D-Massachusetts

Mounds Sheldon Whitehouse

D-Rhode Island

Milky Way Dark Ron Wyden

D-Oregon

Milk chocolate

The numbers for September 12, 2014

Fri, 2014-09-12 06:45

Oscar Pistorius could face 15 years behind bars following his conviction for culpable homicide in the death of his girlfriend last year. It's equivalent to a manslaughter conviction, The New York Times reported, ruling that Pistorius was negligent when he shot Reeva Steenkamp through a bathroom door. He was acquitted of a murder charge Thursday. Pistorius won't be sentenced until next month.

Here are some other stories we're reading — and numbers we're watching — Friday morning.

$97

 The price of Brent crude oil in London on Thursday. Foreign Policy reports oil prices are at their lowest point in the past year and falling, despite numerous crises tearing through the Middle East.

289,310

 The number of people sharing "Game of Thrones" via BitTorrent during one sample week earlier this year, making "Thrones" the most pirated TV show of that week by far. This number is relevant again Friday amid reports from Quartz and others that HBO could offer its streaming service, HBO Go, to customers separate from cable packages. 

$9 million

How much Microsoft co-founder Paul Allen is donating to U.S. efforts to combat the Ebola outbreak in West Africa, Reuters reported. The donation will be made through Allen's foundation, which already committed $2.8 million last month. The Bill and Melinda Gates Foundation also promised to give $50 million to U.N. efforts this week.

10

Because it's Friday: That's the age of Fortune contributor Sabrina Lane. Sabrina has written an open letter to Microsoft CEO Satya Nadella, pleading with him to not change "Minecraft" — her favorite game — after Microsoft buys its maker.

PODCAST: Walmart's new wardrobe

Fri, 2014-09-12 03:00

Almost two years after Superstorm Sandy hit the East Coast, killing 72 people and causing $50 billion in damage, thousands of people may be asked to return some or all of the money they received from the Federal Emergency Management Agency, FEMA. And Walmart is putting in a new dress code for its employees, but they're not calling it a uniform. And that can create hardships for employees expected to pay for their new clothing. Plus, as Marketplace celebrates its 25th birthday this year, we are looking at the weird, delightful and destructive ways that prices have changed during that quarter century. But before our series gets to those, let's get a snapshot on what inflation is, exactly. 

The price of smoked salmon hasn't swum upstream

Fri, 2014-09-12 02:00

As Marketplace celebrates its 25th birthday this year, we'll be taking a look at what our dollar bought in 1989, and what it buys today.

Saul Zabar, president of the famed Upper West Side establishment Zabar's, can't remember what he was charging for smoked salmon 25 years ago. But a magazine from 1989 lists a Zabar's sale price: $15.95 a pound for Scotch salmon, pre-sliced. Sounds like a bargain, but as we'll be reminding ourselves during this series, you have to remember to adjust for inflation. $15.95 is more than $30 a pound in today's money.

Today, routinely, with no special sale, Saul charges under $24 a pound. In real terms, that's a 22 percent decline in 25 years.

Dr. Gunnar Knapp, a professor of economics at the University of Alaska, Anchorage, is an expert on the raw material that goes into smoked salmon. He points to the rise of farmed salmon as part of the explanation. 

Now, we shouldn't forget that farming salmon can have environmental costs. And as Knapp points out, there are two parts to the price equation — not just supply, but also demand.

Click the media player above to hear Dr. Gunnar Knapp in conversation with Marketplace Morning Report host David Brancaccio.

Walmart draws criticism for its new dress code

Fri, 2014-09-12 02:00

Walmart is introducing a new dress code for its employees, but they’re not calling it a uniform. And that’s got some Walmart employees riled up.

The retailer says customers are having a hard time figuring out who works at the store, so it’s put in place a dress code. Employees have to wear black or khaki pants and a blue or white collared shirt.

Judith Conti of the National Employment Law Project, a nonprofit that advocates for low-wage workers, says employees are upset about this because they have to pay for the clothes.

“Walmart employees are among the lowest paid in the entire country,” Conti says. “And Walmart is asking them to buy new clothes to wear at work.”

Walmart didn’t respond to an interview request, but it has said that most of the feedback about the dress code has been positive.

Reuel Schiller, a professor at UC Hastings Law School, said it’s significant that Walmart isn’t calling this a uniform.

“There’s a legal difference between a uniform and a dress code,” says Schiller. If the cost of the uniform will actually pull your wages below minimum wage for the week that you bought it, then under federal law that’s illegal.  

Schiller said Walmart skirts the issue — and passes on costs — by going with a dress code.

Silicon Tally: Get on the Google bus

Fri, 2014-09-12 02:00

It's time for Silicon Tally! How well have you kept up with the week in tech news?

This week, we're joined by Marketplace reporter Queena Kim in the heart of Silicon Valley.

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Let's inflate like it's 1989

Fri, 2014-09-12 01:30

As Marketplace celebrates its 25th birthday this year, we are looking at the weird, delightful and destructive ways that prices have changed during that quarter century.

For instance, I noticed that the real price of electricity is essentially the same as it was in 1989, adjusted for inflation. In fact, electricity costs the same as it did in 1960, when I was born, adjusting for inflation. Prescription drugs, however, are a different story. The examples we're looking at for the Marketplace Inflation Calculator all have a unique story about how prices have changed since our show got started 25 years ago.

But before our series gets to those, let's get a snapshot on what inflation is, exactly.

Greg Mankiw is chairman of the economics department at Harvard, and if his name sounds familiar it might be because it's on the front of your macroeconomics textbook from college. 

Click the media player above to hear Dr. Greg Mankiw in conversation with Marketplace Morning Report host David Brancaccio.

 

Twitter taps the bond market

Thu, 2014-09-11 13:41

This week, Twitter announced its plan to raise at least $1.3 billion by issuing convertible bonds. Unlike some companies that turn to the debt markets, the company doesn’t appear to be in dire need of cash. So what is their grand strategy?

“I don’t think it’s so much ‘What is the big strategy?’ I think the question many people will be asking is: ‘Is there a really meaningful strategy?’” says Nate Elliott, vice president at Forrester Research. He points out that Twitter’s user base, while large, is still closer to Google+ than Facebook, and the company is not yet profitable.

“If Twitter’s revenues matched its notoriety, it’d be doing just fine,” Elliott says.

But bond market investors are not in a skeptical mood, says David Krause, finance professor at Marquette University. “Companies are raising record amounts of debt right now.” 

The primary reason: With near-zero interest rates, other options are slim pickings — a rather unhappy economic indicator. “It’s the result of an economy that is still struggling, and it’s also due to what we’re seeing globally,” says Brian Rehling, chief fixed income strategist at Wells Fargo Advisors. “We’re seeing very weak if not negative growth over in Europe."

On the positive side, the drive to issue debt now may be motivated by a belief that the macroeconomic picture is going to change. “I think there is a sense from some that this is not going to last,” says Rehling.

“It’s a very opportune time for companies that may not be investment grade to be able to go out and lock in some long-term money at some very attractive rates,” says Krause.

Krause thinks Twitter’s offering will be very attractive to investors.

Even if all it buys Twitter in the short term is more time.

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