MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Sunday, May 26, 2013
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3:41 AM The Department of Justice has filed a request asking the U.S. Bankruptcy Court in Manhattan to block the outline of AMR's (AAMRQ.PK) merger with US Airways (LCC), partly due to the $19.9M severance package that would be paid to outgoing AMR CEO Tom Horton. The DOJ's move follows the rejection of the package by Judge Sean Lane in March even though he approved the merger. 1 Comment
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3:16 AM Visa (V) and MasterCard (MA) have sued trade groups and retailers that have rejected a $7.25B agreement over credit-card swipe charges, with the firms looking to prevent the defendants from seeking antitrust damages for the fees. The lawsuit on Friday came a day after 17 retailers, including Target (TGT) and Macy's (M), sued Visa and Mastercard over the charges. Comment!
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2:59 AM Fiat CEO (FIATY.PK) Sergio Marchionne has reportedly approached Goldman Sachs, BofA, Deutsche Bank and other banks about financing the Italian car maker's attempt to buy the 41.5% of Chrysler held by a union-run trust. The acquisition of the stake, which is worth $1.75-4.27B depending on whom you ask, would give Fiat access to Chrysler's $11.9B in cash and allow the combined company to carry out an IPO in New York. Comment!
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2:45 AM Two freight trains, one run by Union Pacific (UNP) and the other by BNSF Railway (BRK.A), collided at an intersection in Missouri yesterday, causing several cars to derail and injuring seven people. The derailment was the second this year involving a Union Pacific train on the stretch of track where yesterday's incident took place. Comment!
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2:36 AM Although he's just been reappointed as CEO of P&G (PG), one of A.G. Lafley's top priorities will reportedly be to find his successor. The problem Lafley faces is that several senior executives left during the tenure of Bob McDonald, including promising leaders such as Charles Bergh, now CEO of Levi Strauss, and new Baccarat boss Daniela Riccardi. Comment!
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Saturday, May 25, 2013
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10:55 PM Marchers in more than 400 cities across 52 countries took part in protests against Monsanto (MON) today, calling attention to what they say are dangers posed by genetically modified foods. Monsanto is "poisoning our children, poisoning our planet," claims one of the organizers. The company says its seeds help farmers produce more from their land while conserving resources such as water and energy. 21 Comments
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Friday, May 24, 2013
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6:25 PM News Corp. (NWS, NWSA) expects to write down the value of its soon-to-be-independent publishing business by $1.2B-$1.4B this quarter, according to an SEC filing. The media company says "certain of its goodwill and intangible assets were potentially impaired” at the publishing business, which includes newspapers such as the NY Post and WSJ. 1 Comment
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5:42 PM Starz (STRZA) +3.2% AH after an SEC filing reveals Berkshire Hathaway (BRK.A, BRK.B) acquired ~5.62M shares, or a 5% stake, in the company. 3 Comments
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3:25 PM Las Vegas Sands (LVS -0.6%) replaces PricewaterhouseCoopers as its auditor with Deloitte Touche amid some legal and regulatory issues the company is currently dealing with. According to a previous SEC filing, the company didn't have any notable disputes with PwC. Comment!
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3:12 PM Yahoo (YHOO +1.7%) throws its name into the Hulu hat to join a number of P-E firms as well as DirecTV and Time Warner Cable in the hunt. Owners Disney (DIS +0.1%), Comcast (CMCSA +0.2%), and News Corp (NWS, NWSA) will weigh the best offer, but will also want to position themselves on the content side to be protected. (Previous on Hulu-mania) 8 Comments
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2:51 PM Callaway Golf (ELY +6.8%) enjoys a strong session after earnings and revenue top estimates. More from the report: Strength in existing product lines (X Hot and Versa putters) fuels a 12% Y/Y increase in net sales (this excludes brands that were divested in 2012), and improvements in gross margins as well as lower operating expenses help the company post a 27% rise in GAAP EPS. Outlook: FY13 revenue guidance lowered to $830M from $850M, FY13 EPS guidance is reiterated at -$0.04 after accounting for a preferred dividend (consensus is $832M and -$0.05). (PR, CC transcript) 1 Comment
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2:39 PM Delhaize Group (DEG +0.1%) might sell two of its U.S. grocery chains as it looks to cut losses on the continent. The Belgian company is looking at options for its Harveys and Sweetbay supermarket operations. Comment!
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2:31 PM Feltl & Co. downgrades Hibbett Sports (HIBB -3.9%) to Hold from Buy (price target $60) on the heels of the company's earnings miss (previous). Comment!
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1:40 PM Add KKR and Silver Lake Management to the list of bidders for Hulu (CMCSA, DIS, NWS), according to Bloomberg. Earlier reports indicated Time Warner Cable (TWC -0.8%), Guggenheim Digital, and DirecTV (DTV -0.6%) are in the hunt. What to watch: Some analysts think Hulu could evolve into a payment authentication system for the cable industry, while others bet that a single media/tech company will snap up the firm to create a unique position for itself in video - either as a premium streaming service or an ad-supported content monster. Either way Netflix (NFLX -0.5%) is watching. 1 Comment
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1:25 PM Japanese automakers (TM, HMC, NSANY.OB, MZDAY.PK, SZKMY.PK) could see the tide turning in China as consumer demand continues to pick up. Even with rhetoric and military exercises over the islands in the East China Sea continuing, new data shows 16K cars were shipped from Japan to China in April - 3X what was exported last Oct. when the flareup started - and Japanese brands now account for 16% of the market after dipping to as low as 7%. The big picture: Though the overall pie keeps getting larger, General Motors (GM -0.1%) and Ford (F +0.1%) would just as soon that the Japanese automakers keep their slice of the China auto market small. 2 Comments
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1:02 PM General Motors (GM -0.2%) has a nice little insurance policy to help it create shareholder value just in case the forecasts for strong U.S. auto sales don't pan out. The connectivity value of the Onstar service from the automaker makes the asset worth close to a whopping $8B to $10B, according to a bullish take from Citigroup. Though speculation on an Onstar spinoff has been going on for more than a decade, the high penetration rate of communication/security services also makes the stand-alone concept more enticing than ever. 2 Comments
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12:43 PM Volkswagen (VLKAY.PK) could see a production halt in South Africa with the main automobile workers union in the nation threatening to tell members to stop working due to the dismissal of members. Ford had its own answer to high labors costs in Australia with a mass exit and a plan to import. Comment!
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12:38 PM Heard during Foot Locker's (FL -6.1%) earnings call: 1) Execs say products are "right" at Foot Locker stores, but due to weather patterns more sales will shift to Q2 from Q1. 2) In Q1, traffic was down, but ASPs were higher. 3) The planned acquisition of Runners Point Group appears to be a bet on Germany - not the continent as a whole. 4) The retailer says comparable store sales are flat this month. That's not great news for Nike (NKE -1.4%), Under Armour (UA -1.3%), or Finish Line (FINL -2.2%) - unless the catch-up that Foot Locker points to materializes. (webcast) Comment!
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12:20 PM Shares of Melco Crown (MPEL) shrug off a downgrade from Macquarie to trade higher than their opening level as traders bet yesterday's selloff on worries about China's economy was a bit overdone. Though it's not up and running in the Philippines just yet, Melco Crown will be more than a pure Macau play in the future. 2 Comments
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11:57 AM Gasoline prices in Minnesota are the highest in the continental U.S., a dubious honor usually reserved for California and odd considering the state borders North Dakota, now the no. 2 U.S. oil producer. Minnesota drivers were paying $4.29/gal. on May 20, $0.62 above the U.S. average. Planned and unplanned maintenance at Midwest refineries have cut into gasoline production and available supplies are depleted, the EIA says. 5 Comments
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