Texas Business Report: A High-Speed Rail Network Gets Fast-tracked
The mayors of three of Texas’s largest cities voiced their support this week for putting a private high-speed rail network on the fast track. The Dallas Morning News reports city leaders in Houston, Dallas, and Fort Worth are working with the private transportation company Texas Central High-Speed Railway to pursue its goal of transporting riders between the Houston and DFW metro areas in about ninety minutes at speeds that could top 200 miles per hour.
Texas Central says “it will not require any public subsidies to fund the multibillion-dollar project,” which it is undertaking in collaboration with Central Japan Railway Company, according to the Texas Tribune. The next phase of the rail campaign will begin within the next two months with an environmental impact study, a key step in securing federal approval for the line.
The Bottom Line: If all goes according to plan, the bullet train could make a major difference in accommodating Texas’s rapid population growth, especially in the long term: It currently takes about four hours to drive the route on Interstate 45, and state transportation officials predict that could increase to as long as seven hours by 2035, the Morning News reports.
Inn-itial Public Offering
New York investment firm Blackstone announced this week that it plans to take Irving-based hotel chain La Quinta public in an IPO valued at $781 million. Businessweek reports the company intends to sell 37.2 million shares at for $18 to $21 apiece—with a market value as high as $2.57 billion. The company expects to set the share price by April 8.
Blackstone is hoping to continue the successful run it’s been having with a series of hotel IPOs in recent months. Shares of Extended Stay America Inc. have risen by 17 percent since it went public in November, followed by a 12 percent gain for Hilton Worldwide Holdings Inc. since its December offering.
The Bottom Line: Blackstone’s IPOs are part of a larger industry trend, as buyout firms are moving “to take advantage of a recovery in real estate values,” according to Businessweek.
New Game Plan
GameStop is taking big steps to invest in its future, but first it must contend with the present reality of weakening sales caused by increasing competition and the shift toward mobile gaming. On Thursday the Grapevine-based video game retailer released an underwhelming earnings report that fell short of analysts’ expectations, even with a boost from the November release of new game consoles from Microsoft and Sony, Reuters reports. The company’s net profit fell 15.5 percent from the same quarter last year, from $261.1 million to $220.5 million.
The Bottom Line: CEO Paul Raines referred to Q4 as “a very tough transitional quarter” but held out hope that new technology partnerships with IBM and Texas A&M could give the company a much-needed reboot. The company unveiled plans for its new GameStop Technology Institute, which “will focus on research and development, with the goal of creating tools to help digitize the store experience,” including mobile applications built on IBM’s cloud technology platform, according to the Fort Worth Star Telegram.
Winners of the Week: Virtual Marksmen
Smart rifles, meet cryptocurrency. Austin gun manufacturer TrackingPoint—which sells computer-powered “precision guided firearms” capable of hitting a bull’s-eye from 1,000 yards—said this week that it will now accept payments in Bitcoin, Ars Technica reports. The company says several of its customers have expressed interest in using the virtual currency to buy the rifles, which run from $9,000 to more than $20,000 (for us old-fashioned dollar hoarders, that’s 18 to 40 Bitcoins at the current exchange rate).
TrackingPoint’s payment processor CoinVoice handles all customer transactions, so the company won’t have to worry about any regulatory hurdles that may arise. Ars Technica also raises the question of “whether the decentralized, semi-anonymous nature of cryptocurrencies can be used to sidestep some or all firearm purchasing restrictions”—but TrackingPoint’s CEO says the same federal background check requirements will apply no matter which currency is used.
Losers of the Week: Thrifty Margarita Drinkers
With the price of limes on the rise, can black-market Mexican martinis be too far off? The average retail price of limes sold at grocery stores has increased by about 20 percent in the last two weeks to 53 cents apiece—which is more than double last spring’s average of 21 cents. KUT Austin reports that some Texas restaurant owners are paying as much as $100 for a case of 100 limes compared to about $15 to $20 late last year, which is prompting many of them to scale back on the fruit.
Mexico, the top lime supplier to the U.S., is experiencing a number of factors that have contributed to the price spike, including flooding, crop disease, theft, and threats from drug cartels—one of which now “controls the wholesale distribution center where growers sell limes to the rest of the world,” according to USA Today.