Today - Monday, March 10, 2014
- Grupo Corporativo ONO's owners are moving forward with plans for an IPO, the WSJ reports, and are due to meet with analysts and candidates for independent directors today and tomorrow.
- The WSJ's article contrasts with a Reuters report on Friday which said that Vodafone (VOD) has agreed to a deal to acquire the Spanish cable operator.
- ONO's shareholders are due to hold an annual meeting on Thursday, when they could approve the IPO, which would effectively end any takeover talks.
- There's no word on the value of the IPO, although ONO's investors would reportedly want above €7B in any M&A.
- Liberty Global (LBTYA) has also been eying ONO.
- An earthquake of magnitude 6.9 has struck off the northern coast of California, although there are no early indications of a Tsunami, nor have there been reports of any damage.
- Japan has revised down its Q4 GDP growth calculation to 0.2% from an initial 0.3%, with the economy held back by weaker-than-estimated capex and consumer spending.
- Annualized GDP was +0.7% vs +1%. (PR)
- The current-account deficit increased to a record ¥1.59T ($15.4B) in January from ¥638.6B in December. (PR)
- "Capital spending remains weak and exports are not coming back to strengthen the recovery, and without support in these areas, Japan's economy is going to contract significantly in the second quarter," says economist Yoshimasa Maruyama. "The negative effect from the (upcoming) sales tax rise could be worse than the BOJ and government expect."
- The Nikkei is -0.9%, while the USJ-JPY is -0.1% to ¥103.12.
- ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, DFJ, JYN, NKY, DBJP, EZJ, EWV, YCL, SCJ, DXJS, JPNL, ITF, JSC, JGBL, JPP, JGBT, JPNS, HEWJ, JGBB, FJP
2:20 AM| 1 Comment
Sunday, March 9, 2014
- Lyft, the developer of a ride-sharing mobile app, has raised $80M in a Series D fundraising round, with reports saying that the company was given a pre-money valuation of $700M.
- Andreessen Horowitz was one of the investors.
- The company is looking to bring in another $70M as part of the round.
- Lyft competes with Uber, which raised $250M at a $3.5B valuation last summer.
- The National Highway Traffic Safety Administration received over 260 complaints about GM's (GM) faulty ignition switches but declined to investigate, an NYT analysis shows. The agency has said that it didn't act because there wasn't enough evidence to show that the problem existed beyond isolated incidents.
- GM has said that the defect, which can shut down a car's engine and power system, and disable airbags, is linked to 13 deaths. The company has recalled over 1.6M vehicles because of the problem.
- Meanwhile, the WSJ looks at how GM's "bureaucratic complexity" hampered the firm's inability to address the fault much earlier.
- "Ross Perot once said that where he came from, if you see a snake, you kill it. But at General Motors, if you see a snake, you hire a consultant on snakes, then you form a committee on snakes, and then you discuss it for a couple of years," the WSJ writes. Perot made the comment over 25 years ago, "but he could have said it yesterday."
- Wayfair has raised $157M in a Series B round led by one-time Twitter investor T.Rowe Price, the online home-furnishings site has said. TripAdvisor CFO Julie Bradley also participated in the fundraising.
- Wayfair's valuation was $2B, Bloomberg reports. The company's sales jumped 55% last year to $915M.
- Wayfair has already reportedly started talks with banks about underwriting an IPO.
- Previously (PR)
- The sale of JP Morgan's (JPM) private-equity business has stalled, Reuters reports, adding that a possible reason is that the bank increased its asking price by too much.
- JPMorgan put One Equity Partners on the market in November; it's portfolio is valued at over $4B.
- Meanwhile, whistleblower Keith Edwards will receive $63.9M for information he provided that led to the bank paying a fine of $614M to settle charges that it defrauded the government into insuring flawed home loans.
- Boeing (BA) has put together a technical assistance team to help in any investigation of what happened to the the Malaysia Airlines 777 that has gone missing over Vietnam airspace.
- With the search continuing, officials and aviation experts have declined to speculate on what happened to the jet, although it seems that the identities of four passengers are under investigation, two of whom were traveling on stolen passports. That has sparked suggestions that terrorism might have been involved.
- A major problem is the lack of a signal from the plane's Emergency Location Transmitter.
- Freescale Semiconductor (FSL) said 20 employees from its operations in Asia, including senior managers, were on the flight.
- In total, the plane was carrying 227 passengers and 12 crew members as it flew from Kuala Lumpur to Beijing.
- Mexico's Federal Telecommunications Institute (IFT) has ordered America Movil (AMX) and Grupo Televisa (TV) to share their infrastructure with rivals as part of an attempt to increase competition in the country's telecom and broadcasting markets respectively.
- The IFT will also regulate Telefonica's prices, and it will force Televisa to publish its advertising prices and stop pressuring advertisers to purchase space on its billboards, cable TV and magazines.
- In addition, IFT has called for bidders for two national broadcast-television networks.
- The upside for America Movil is that once it has complied with the IFT's demands, the regulator may allow the company to start offering TV services.
- A judge has ruled that a conflict of interests caused bankers at RBC Capital Markets to persuade Rural/Metro Corp. to accept a low offer of $438M from Warburg Pincus when the latter bought the national ambulance service in 2011.
- Judge Travis Laster found that the Royal Bank of Canada (RY) division misled Rural/Metro directors about the valuation of the company in order for the sale to be completed quickly. RBS also failed to disclose that it was looking to help Warburg finance the acquisition.
- Laster agreed with Rural/Metro's former investors that they should have received more money, although he has yet to decide how much RBC should pay in compensation. The ex-shareholders want $172M.
- Chinese exports dropped 18.1% on year in February vs growth of 10.6% in January and consensus of +6.8%.
- However, the trend may have been distorted by the Lunar New Year holiday and fake invoicing that boosted the data a year earlier, while the severe winter weather in the U.S. may also have had an effect.
- Imports +10.1% vs +10% and +8%.
- China swung to a trade deficit of $22.98B last month from a surplus of $31.86B in January and vs forecasts of $14.50B.
- "We will probably have to wait for next month's data to get a true picture of the export situation, but we shouldn't worry too much," says UBS economist Wang Tao.
- As expected, inflation eased to a 13-month low of 2% on year in February from 2.5% in January. The figure is below the government's 2014 target of 3.5%.
- On month, CPI +0.5% vs +1% previously and consensus of +0.8%.
- PPI declined for the 24th consecutive month, sinking 2% vs -1.6% and -1.9%. "The risk of deflation is rising in the near term," say ANZ economists Liu Li-Gang and Zhou Hao.
- The factors that could be dragging on producer prices include weak consumer demand and the excess capacity of some raw material-industries such cement as glass and steel.
- ETFs: FXI, PGJ, GXC, FXP, YINN, CYB, HAO, KWEB, CNY, ASHR, CHIQ, DSUM, TAO, CHIX, YANG, CQQQ, MCHI, PEK, QQQC, XPP, YAO, CHXX, FXCH, CHII, CHXF, YXI, ECNS, CHIM, CHIE, KFYP, FCA, TCHI, CHLC, CHNA, KBA
Saturday, March 8, 2014
- "MetLife (MET) is one of the cheaper stocks in a sector that is, itself, cheap relative to the market," says Eric Hagemann, an analyst at Richard Pzena's Penza Investment Management (an owner of the shares). A check of price/book (excluding investment gains) finds Met at 1.1x - grouped with Hartford (HIG) at 0.9x and Lincoln Financial (LNC) at 1.1x - but well less than Prudential's (PRU) 1.6x.
- Why the discount? Met is one of few remaining large financials not yet buying back any stock as it awaits direction from D.C. (which isn't expected until late this year or early next). In same boat, AIG and Prudential have both thrown caution to the wind and begun repurchases.
- On the other hand Met has boosted its dividend to $1.10 per share annually and the payout could approach $1.50 in 2015. There was also last year's $2B acquisition of Chilean pension fund provider Provida. If the new regulatory capital rules are too onerous, a breakup of Met into domestic and international businesses is a possibility.
- "In a record stock market, MetLife offers a nice package for investors: a rock-bottom P/E and price/book ratio, an attractive global franchise, and a financially astute management team," writes Andrew Bary.
- EFC's estimated book value of $23.65 per share as of February 28 slips from $24.45 at the end of January, but a dividend of $0.77 was paid. Book value was essentially stable after adding back the payout.
- Press release
- Friday's close of $24.14 puts the stock at 1.02x book. Mortgage REITs (EFC is actually a partnership) near or above book were a rare sight at the start of the year, but the species is making a comeback.
- Yesterday: 3 mREITs lose Buy ratings for valuation reasons; trading above book value, Javelin Mortgage is punished after earnings
- Related ETFs: REM, MORT, MORL