Momentum gathers for BlackBerry sale to Canadian institutions. Fairfax (OTC:FRFHF), BlackBerry's (BBRY)e largest shareholder, is reportedly "exploring ways" to take the struggling company private. Fairfax's Prem Watsa resigned from BlackBerry's board yesterday after it formed a special committee to explore strategic alternatives, including a sale. Alberta Investment Management said it would think about investing in BlackBerry if it were to go private, echoing public musings by the Canada Pension Plan Investment Board. BlackBerry's shares were +1.45% premarket after jumping 10.45% yesterday.
Shareholders back replacement of HMA board. A majority of Health Management Associates' (HMA) shareholders have voted to oust the U.S. hospital company's board and replace it with a slate of directors from activist investor Glenview Capital. The outcome puts HMA's proposed $3.9B sale to Community Health Systems (CYH) in doubt, as the hedge fund opposes the deal for being too cheap. Rather, Glenview prefers to improve HMA's performance. Notwithstanding, Community Health remains committed to buying HMA.
Top Stock News
J.C. Penney to name new director. In an apparent effort to appease board member and major shareholder Bill Ackman, J.C. Penney (JCP) will reportedly name a new director with retail experience as early as today. In return, Ackman will agree to "put on hold" his very public push to quickly remove CEO Mike Ullman. Post-publication update: Ackman has resigned from J.C. Penney's board.
Blackstone buys $2.7B of apartments from GE. GE Capital (GE) is reportedly unloading yet more real estate, agreeing to sell a U.S. apartment portfolio to Blackstone (BX) for $2.7B. In the last couple of months, GE has inked deals to divest an $807M portfolio of net lease properties to American Capital Realty, and seven Australian office buildings - also to Blackstone - for $271M.
CFTC subpoenas GS, JPMorgan, others over metals warehouses. The Commodity Futures Trading Commission has subpoenaed Goldman Sachs (GS), JPMorgan (JPM), Glencore Xstrata (OTC:GLCNF) and their subsidiaries for documents relating to warehouses they operate for aluminum and other metals, according to widespread reports that firm up earlier speculation. The CFTC's investigation follows allegations that the activities of warehousing companies have artificially boosted the prices of metals.
BP sues EPA over ban on government orders. BP (BP) has asked a court to order the Environmental Protection Agency to lift its ban on the company receiving new government contracts, which the oil major says has cost it billions of dollars. BP called the debarment arbitrary, capricious and "an abuse of discretion." The EPA imposed the ban in November 2012 after BP said it would plead guilty to criminal charges related to the 2010 Gulf of Mexico oil spill.
Patriot Coal, union reach deal to ease cuts. Patriot Coal (OTC:PCXCQ) and the United Mine Workers of America have reached an agreement that will soften wage and benefit cuts authorized by a bankruptcy judge. While precise details weren't released, the UMWA said the deal includes improvements to wages, healthcare, paid time off and pensions, with retiree healthcare benefits to continue. The agreement now needs the approval of the bankruptcy court and workers.
Freddie Mac spends fortune to prop up market share. Freddie Mac (OTC:FMCC) is reportedly spending hundreds of millions of dollars per year to hold onto market share instead of sending the money to the Treasury. The cash is going to lenders as compensation to make up for Freddie's MBSs trading at a lower price than those of Fannie Mae (OTC:FNMA). Despite the payments, Freddie's market share has declined to the low 30s from its long-term average of 40%.
Top Economic & Other News
German investor confidence jumps. The German ZEW survey of investor confidence has climbed to 42 in August from 36.3 in July and topped consensus of 40. The current situation print leapt to 18.3 from 10.6 and slayed forecasts of 12. "The first signs of an end to the recession in important eurozone countries may have contributed to the indicator's rise," ZEW said, as well as "robust domestic demand in Germany."
Rail oil-terminal capacity to rival Keystone pipeline. The oil is coming, whether the Keystone pipeline is built or not: over 700,000 bbl a day of new rail terminal capacity is expected to be built by 2015, rivaling the 850,000 bbl a day proposed by TransCanada (TRP) for Keystone. Oil flows down a main pipeline at 6-8 km per hour, while a train averages around 28 km per hour. For a producer, getting oil to a refinery four times faster means getting paid sooner.
Musk outlines Hyperloop: LA-SF in 30 minutes. Elon Musk has published details of the Hyperloop, a transportation system that Musk asserts could send passengers from San Francisco to LA in 30 minutes via aluminum pods enclosed inside steel tubes. Musk says the pods will be able to travel at 800 mph. A people-only LA-S.F. Hyperloop route could apparently be built for $6B and one that supports cars for $10B. That's well below the $70B quoted for California's high-speed train.
Alpha-Rich Stock Movers and Great Calls
1) Last Tuesday, Caiman Valores argued that the gold sector sell-off left low-cost producer New Gold (NGD) 45% undervalued. Shares are +14% since. Read article »
2) On June 14, Josh Burwick wrote that Citrix (CTXS) offered the textbook definition of a great risk/reward, with 30% upside. Shares are +18.4% in the two months since. Read article »
Alpha-Rich Stocks To Watch
1) Loral's (LORL) intrinsic value is probably 30% above the current market price. A potential liquidation could serve as a catalyst. Read article »
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In Asia, Japan +2.6% to 13867. Hong Kong +1.2% to 22541. China +0.2% to 2106. India +1.55% to 19241.
In Europe, at midday, London +0.5%. Paris +0.3%. Frankfurt +0.8%.
Futures at 6:20: Dow +0.35%. S&P +0.3%. Nasdaq +0.3%. Crude +0.9% to $107.04. Gold -0.1% to $1333.30.
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