- TiVo soars on appeal ruling. TiVo (TIVO) shares rocketed a heady 62% in trading yesterday after the company won a key appeal ruling against Dish Network (DISH) and EchoStar (SATS). A federal court found that Dish Network and EchoStar are still infringing on TiVo's DVR patents despite software changes and they should stop providing digital-video recording services. The ruling paves the way for TiVo to receive around $300M in damages and sanctions. TIVO +4.1% premarket (7:00 ET).
- UBS reaches auction-rate settlement. UBS (UBS) reached a deal to buy back $200M of auction-rate securities and pay a $6.64M fine to settle charges it misled ARS investors into thinking the securities were as safe as cash. The deal, reached with the Texas State Securities Board, covers investors left out of a 2008 nationwide settlement in which UBS agreed to buy back $18.6B of ARS and pay a $150M fine. UBS expects other states to sign on to the latest settlement. Shares +2.3% premarket (7:00 ET).
- Tax ruling clears the way for AIG, MetLife deal. The IRS has reportedly told AIG (AIG) and MetLife (MET) that it ruled in their favor on a key tax question, a move that paves the way for the sale of AIG's Alico foreign life-insurance unit. The $15B deal provides MetLife with added exposure to the Japanese market, but analysts point to potential difficulties as MetLife will have to integrate the two companies' very different cultures. An announcement could come as soon as Sunday night.
- More complaints about repaired Toyotas. Regulators are investigating a growing number of complaints that fixes made to recalled Toyota (TM) vehicles haven't solved sudden acceleration problems. The National Highway Traffic Safety Administration is reviewing more than 60 complaints and has asked Toyota to provide additional information. Separately, an Associated Press investigation found Toyota has been inconsistent, and sometimes contradictory, in revealing what information is recorded by its cars' "black boxes." The data could potentially explain crashes blamed on sudden acceleration problems, and other automakers routinely allow much more open access to this sort of information.
- FHA understates risk exposure. The Federal Housing Administration has understated how much risk it has taken on, according to a group of economists from the New York Federal Reserve and New York University. The FHA is overlooking factors that could signal higher losses, said the group, making it more likely that the agency will have to ask for taxpayer funds. As many as 40% of FHA-insured mortgages are worth more than the homes that secure them, and as many as 14% of the mortgages may be for more than 115% of the home's value. The FHA's calculations put the latter figure at 6%.
- Voting-machine merger nears approval. The Justice Department is said to be close to approving a merger of Election Systems & Software Inc. and Premier Election Solutions Inc. (DBD), the U.S.'s two largest makers of voting machines. At $5M, the deal's small size didn't trigger an automatic federal antitrust review, but opponents of the deal were vocal about their concerns that the deal would limit choice and leave the country's election system more vulnerable to failures. The combined company will likely have to divest a key electronic voting system.
- Gov't profits on BofA warrant sale. The Treasury made $1.5B from its sale of Bank of America (BAC) warrants yesterday, representing the most the Treasury has earned from selling warrants in a single institution and the severing of Bank of America's final TARP link. The warrants subsequently rose as much as 7.8% in their first day of trading.
- Chinalco aims for Rio board. Chinalco (ACH) is 'actively' seeking membership on Rio Tinto's (RTP) board, nine months after Rio rejected Chinalco's $19.5B investment proposal. Chinalco Chairman Xiong Weiping declined to specify a timetable or how many seats his company, Rio's largest shareholder, is looking for. RTP +1.7% premarket (7:00 ET).
- Sovereign wealth funds get back in the game. Sovereign wealth funds are starting to once again take an active role in global dealmaking, following a pullback last year after many funds were hurt by investments in Western banks. As an example, GIC, Singapore's largest sovereign wealth fund, is one of the parties that committed to underwrite part of Prudential's (PUK) $20B rights issue. GIC's potential investment comes amid news that it may have a $5B paper loss on its UBS (UBS) stake after converting its mandatory notes into shares.
- Greece bond sale triple-subscribed. Greece sold €5B ($6.8B) in 10-year bonds yesterday, and received orders for three times that amount. Though the results of the sale suggest investors believe Greece will be able to avoid a default on its debt repayment, Greece had to pay the highest interest rate for a 10-year bond since it joined the eurozone in 2001. Currency strategists warned that such high rates are unsustainable.
- Gov't denies too-big-to-fail guarantee. Testifying before the Congressional Oversight Panel yesterday, Assistant Treasury Secretary Herbert Allison said "there is no too-big-to-fail guarantee on the part of the U.S. government" and financial firms know not to assume implied protection. Elizabeth Warren, the panel's chairwoman, disagreed, noting that financial markets clearly do assume the guarantee exists, especially in the case of Citigroup (C). Allison refused to answer many of the panel's questions on Citigroup, calling the Treasury a "passive investor" with minimal involvement in oversight.
- Bank tax would hurt consumers. A study by the Congressional Budget Office suggests that the White House's proposed $90B bank tax would have only a minimal effect on firms, and the fee would ultimately be "borne to varying degrees by an institution’s customers, employees, and investors." It would also result in a "slight decrease" in the total amount of credit available.
- Jobs bill gains traction. Ahead of what will likely be some ugly nonfarm payrolls data later this morning, the House of Representatives approved a $15B bill yesterday to stimulate private-sector job creation. The bill, which was approved by a margin of 217-201, must now be reconciled with a version that originated in the Senate. Senate approval is likely, but means any legislation will be delayed a few extra days.
Earnings: Thursday After Close
- Marvell Technology (MRVL): Q4 EPS of $0.40 beats by $0.03. Revenue of $843M (+64.3%) vs. $842M. Shares -6.7% AH. (PR, earnings call transcript)
- Silver Wheaton (SLW): Q4 EPS of $0.15 in-line. Operating cash flow of $71M (+361%). Shares +1.2% AH. (PR)
- In Asia, Nikkei +2.2% to 10369. Hang Seng +1.0% to 20788. Shanghai +0.3% to 3031. BSE +0.1% to 16994.
- In Europe at midday, London +0.6% to 5558. Paris +0.7% to 3857. Frankfurt +0.5% to 5822.
- Futures: Dow +0.3%. S&P +0.4%. Nasdaq +0.2%. Crude +0.6% to $80.71. Gold +0.1% to $1134.70.
Friday's Economic Calendar
Seeking Alpha editors Eli Hoffmann and Jason Aycock contributed to this post.
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