Friday, August 22, 2014
- Durata Therapeutics (NASDAQ:DRTX) exercised its right to defer the $25M milestone payment due Pfizer (NYSE:PFE) that was triggered by the first commercial sale of Dalvance (dalbavancin). The milestone was established in 2009 as part of Durata's acquisition of Vicuron Pharmaceuticals from Pfizer.
- In lieu of the cash payment, Durata delivered a $25M promissory note to Pfizer that bears 10% interest compounded annually and matures on July 7, 2019.
- Ahead of Qihoo's (NYSE:QIHU) Q2 report (due Monday morning), CNZZ estimates Qihoo now has 30.2% of the Chinese search market in terms of page views. That's up sharply from the 16.3% it had a year ago, and suggests Qihoo may have already reached its 30% year-end target.
- Baidu's (NASDAQ:BIDU) share is pegged at 54.5%, down from 67.7% a year ago. Sohu's (NASDAQ:SOHU) Sogou unit is assigned a 12.8% share, up from 9.7% a year ago.
- Two caveats: 1) iResearch has provided higher search share figures for Baidu, and lower ones for Qihoo, than CNZZ. The firm has argued CNZZ's figures paint an incomplete picture due to a heavy reliance on small/medium-sized sites for data. 2) Qihoo's mobile search position is weaker than its PC search position. Baidu, meanwhile, just topped 500M monthly mobile search users.
- Down initially in response to its soft FQ3 guidance, Marvell (MRVL +1.7%) finished the day moderately higher. Brean and RBC lowered their targets, but both maintain bullish ratings.
- On the FQ2 CC (transcript), CEO Sehat Sutardja mentioned both FQ2 and FQ3 sales have been hurt by soft 3G baseband chip demand from a major Asian client (widely believed to be Samsung). At the same time, he noted both Marvell's storage (hard drive/SSD controller) and networking chip sales rose 6% Q/Q.
- Flat to "modest" Q/Q growth is expected for both storage and networking in FQ3. Sutardja states Marvell maintains a 60%+ hard drive controller share, and remains the top supplier of SSD controllers (no specific number is given).
- FBR's Chris Rolland thinks some investors will view the 3G weakness as "neutral to positive," given the business carries "significantly below average" margins and profitability. "At some point, we believe investors will look past the 'distraction' that is mobile and recognize the solid storage and networking business underneath, but timing remains uncertain."
- UBS' Stephen Chin is more cautious: He thinks getting Marvell's baseband ops (heavily dependent on China) to reach breakeven will "remain challenging," given demand is shifting towards 4G phones faster than Marvell can ramp 4G baseband volumes, and that Qualcomm and MediaTek provide tough competition. Broadcom can sympathize.
- To settle the FHFA's suit against the firm, Goldman (NYSE:GS) has agreed to pay $3.15B to buy back residential MBS purchased by Fannie and Freddie from 2005-2007. The costs of doing so are "substantially covered" by Goldman's reserves as of the end of Q2.
- The WSJ reported in July Goldman could pay $800M-$1.25B to settle. The FHFA has now reached deals with 15 of the 18 banks it sued in 2011.
- John Thaler's JAT Capital has raised its stake in Madison Square Garden (NASDAQ:MSG) to 4.28M shares (6.7%). In its 13D, JAT says it "may seek to engage" MSG's board to "provide recommendations on ways to achieve long-term value."
- MSG +1.9% AH to a new 52-week high. Shares have been buoyed by Steve Ballmer's $2B purchase of the Clippers, and its potential implications for the value of the Knicks.
- Veeva (VEEV +7.9%) closed up sharply after partner Salesforce beat FQ2 estimates on the back of better-than-expected billings growth.
- Veeva's own FQ2 report arrives on Aug. 28. In March, the company extended its Salesforce alliance, under which Veeva is Salesforce's preferred pharma/biotech industry partner, through 2025.
- ONEOK (NYSE:OKS) has filed to sell up to $650M in limited partner interest through future offerings.
- ONEOK had $278M in cash at the end of Q2, and no borrowings under a $1.7B revolving credit facility. The company recently committed to investing $605M-$785M on a North Dakota natural gas processing facility.
- ParkerVision (PRKR +18%) has added Samsung to the infringement suit it filed against Qualcomm and HTC in May. The company has also added 4 more patents (they relate to down-converting an electromagnetic signal) to the suit, raising the total to 11.
- ParkerVision, still stinging from the June ruling it received for its prior Qualcomm suit, closed yesterday near its 52-week low of $1.08. Shares slipped last week following ParkerVision's Q2 report.
4:20 PM| Comment!
- Twitter (TWTR +2.1%) will launch an e-commerce/payments platform later in 2014 that allows users to directly make purchases from its site and apps, re/code reports.
- As previously reported, PayPal rival Stripe will initially handle payments. Much like Facebook, Twitter will allow a "Buy" button (or something with similar wording) to be embedded within posts.
- As it is, a disclaimer found in Twitter's Q2 10-Q had raised hopes the company will be making an e-commerce push. So had the purchase of offline deals platform CardSpring.
- Re/code doesn't state whether Twitter will seek a cut of enabled purchases. If it doesn't, Twitter could still profit from the service to the extent it boosts purchase activity, and thus motivates merchants to spend more on Twitter ads.
4:05 PM| 4 Comments
- The FDA clears ViiV Healthcare's Triumeq (abacavir 600 mg, dolutegravir 50 mg, lamivudine 300 mg) for the treatment of HIV-1 infection. The single-pill regimen combines the integrase strand transfer inhibitor dolutegravir with the nucleoside reverse transcriptase inhibitors abacavir and lamivudine.
- ViiV Healthcare is an HIV-focused company established in 2009 by GlaxoSmithKline (GSK) and Pfizer (PFE +0.5%). Shionogi joined the venture in October 2012.
- The FCC has asked Comcast (CMCSA -0.3%) for a variety of information in relation to the company's proposed takeover of Time Warner Cable (TWC -0.2%), including some that delve into the company's Internet and content delivery policies.
- One key question posed to Comcast by the agency is whether or not it slows down the delivery of programming from rivals.
2:57 PM| 1 Comment
- Gecko Design is an 18-year-old product design/engineering firm that has done work for Dell, H-P, Logitech, and Herman Miller, among others. As usual, Google (GOOG - unchanged) hasn't disclosed an acquisition price.
- Gecko will be joining Sergey Brin's secretive Google X unit. Google X projects for which Gecko's hardware skills could be of value include Glass (still awaiting a full commercial launch) and Google's self-driving car effort.
- Google has already been working with eyewear vendors to make Glass more aesthetically pleasing (and less conspicuous). Meanwhile, the company showed off its first internally-designed self-driving car prototypes in May; they have no steering wheels or pedals.
- Wolfe Research has an interesting observation on American Airlines Group (AAL +1.1%) that could give investors a reason to buy the stock.
- Analysts with the boutique investment note that the 2015 consensus EPS estimates on American, which feel "light" to them for starters, have risen faster this year than the carrier's stock price, 63% vs. 56%.
- The differential is the biggest that Wolfe found in the sector.
- A database failure has impacted all 8.2K Walgreen (WAG) pharmacy locations.
- About half of the company's stores can't fill prescriptions, according to a spokesperson.
- A fix to the system is expected sometime this afternoon. Updated 4:41 p.m.: The company reportedly restored systems at all locations by 2 p.m. EDT.
- Walgreen fills prescriptions at a rate of over 2.1M a day.
- Reuters reports Neustar (NSR +5.8%) has received interest from P-E firms, and is working with JPMorgan to review its options.
- Sources add a formal sale process might not start until the winner of a major government phone number management contract is awarded. Neustar fell in June after an e-mail suggested Ericsson is close to landing the deal.
- Shares have jumped above $30 on the report. They remain well below a 52-week high of $53.96.
- Re/code: "Sources with direct knowledge of HP’s (NYSE:HPQ) plans — or in this case, lack of plans — told Re/code on Friday that nothing has changed in its view of Rackspace (RAX +1.5%) since our report in July: It has no interest in acquiring it, not then, not now."
- Shares have pared the morning gains they saw in response to a UBS note speculating H-P could make a ~$45/share bid. Re/code notes remarks made on H-P's Wednesday earnings CC (transcript) about the existence of "material non-public information" (has affected H-P's buyback activity) had bolstered hopes for a Rackspace deal.
- Angie's List (ANGI +0.2%) has "reduced its salesforce by 97 employees as part of its focus on improving salesforce performance and productivity." (8-K)
- Most sales units will be affected, but the "largest percentage reduction" will be at the BigDeal sales team. Meanwhile, new "performance-based measurements" will be applied to remaining sales workers.
- Angie's had 1,637 employees as of last December. The job cuts follow a weak Q2 report in which Angie's reported lower-than-expected e-commerce growth and a 13% Y/Y increase in marketing cost per paid membership acquisition.
- Volatile/heavily-shorted 3D printing stocks are rallying strongly on a quiet late-August trading day. 3D Systems (DDD +3%), Stratasys (SSYS +4.2%), Voxeljet (VJET +11.8%), ExOne (XONE +5.4%), and Materialise (MTLS +2.9%) are among the gainers.
- 3D Systems' short-interest was at a 52-week high of 36.1M shares (34% of the float) on July 31. A relatively modest 15% of Stratasys' float was shorted as of July 31. The figure was 26% for Voxeljet, and a whopping 51% for ExOne.
- The 140-room hotel in Stone Mountain, GA was sold for $1.5M, with the proceeds used to pay off the mortgage. Supertel (SPPR +12.6%) closed on the sale of the Savannah Suites in Jonesboro last month for $1.4M, and has the remaining 5 Savannah Suites on the block.
- YTD, the company has now sold eight non-core assets for combined gross proceeds of $13.1M, with said proceeds used to pay down debt.
- Source: Press Release
- The ITC has voted to impose anti-dumping duties on steel pipe imports from South Korea, India, Taiwan, Turkey, Saudi Arabia, Ukraine, and Vietnam. Tariffs as high as 118% can be assigned.
- U.S. Steel (X +2.3%), among the companies to have filed an ITC complaint on the matter, is rallying. As is AK Steel (AKS +3.7%). A trade group estimates imports of "oil country tubular goods" (the focus of the ITC ruling) accounted for almost 2/3 of the U.S. market last year.
- In a statement, U.S. Steel says it will "continue to evaluate all of its options." That includes "further litigation" against Saudi Arabia, which was excluded from the final ITC ruling due to an amended final determination by the DoC, and the Philippines and Thailand, who were fully exempted.
1:06 PM| 1 Comment
- Salesforce's (NYSE:CRM) 33% Y/Y FQ2 billings growth was better than a Street forecast of 28%, says Nomura (Buy). The firm also estimates organic revenue growth was 28% (total growth was 38%), and notes op. cash flow grew 34% to $246M.
- Nomura sees Salesforce's Microsoft partnership yielding favorable press this fall, and also thinks Salesforce will announce a new cloud service, possibly by leveraging recently-acquired CRM analytics startup RelateIQ.
- BofA/Merrill (Buy) also talks up Salesforce's billings/cash flow growth, and points out the company's backlog ($7.35B) is now 24% above forward revenue estimates. FBR likes the fact op. margin (a recent concern, given heavy spending) rose 130 bps.
- Goldman (Conviction Buy) observes FQ3 guidance implies ~25% billings growth, which in turn points to a pickup in organic growth. "We believe CRM continues to be the preeminent SaaS vendor with significant runway ahead."
- On the CC (transcript), Salesforce mentioned it struck major deals with 3M and Safeway during FQ2, and expanded relationships with GM, P&G, and Yahoo (among others). The company also claimed European deal activity is picking up. Marc Benioff: "Europe tends to be a laggard when it comes to implementing new technology. And that has not escaped our cloud companies."
- Prior Salesforce earnings coverage
- "A lot of blue sky in this name," tweets Citron Research today of China Finance Online (JRJC +8.5%).
- The stock has more than doubled in the past few sessions following a deal to launch China's first online stock trading platform, and Citron temporarily dented the run yesterday after pointing out this is hardly the case. Citron forwards investors to JRJC's annual report where it says well-heeled competitors like Alibaba, Tencent, and Baidu have all recently launched Web-based financial platforms.
- Imperial Capital has launched coverage on MDM software vendor MobileIron (MOBL +3.2%) with an Outperform and $11 target, and on RFID hardware/software provider SuperCom (SPCB +5.7%) with an Outperform and $14 target.
- "We believe MobileIron is positioned to capitalize on the network effect of its mobile ecosystem," writes Imperial's Michael Kim. He sees plenty of room for the company to grow sales to existing clients via cross-selling and up-selling, and to add to its customer base via channel partnerships.
- MobileIron is now slightly above its $9 June IPO price. SuperCom is up 149% YTD.
- Accuray (ARAY +4.1%) fiscal Q4 and full year results:
- Q4: Revenues: $102.0M (+20.1%); Gross Profit: $38.4M (+40.7%); Operating Expenses: $43.1M (+7.8%); Operating Loss: ($4.7M) (+63.0%); Net Loss: ($9.8M) (+47.6%); Loss Per Share: ($0.13) (+48.0%); Quick Assets: $171.9M (-1.4%).
- Fiscal 2014: Revenues: $369.4M (+16.9%); Gross Profit: $142.8M (+46.3%); Operating Loss: ($18.1M) (+77.6%); Net Loss: ($35.4M) (+65.7%); Loss Per Share: ($0.47) (+64.7%).
- Fiscal 2015 Guidance: Revenues: $390M - 410M; non-GAAP EBITDA: $18M - 27M.
- An estimated $1.4B, or 45% of portfolio inflow into emerging markets went into China - which represents only 20% of the MSCI Emerging Markets Index (ETF: EEM) - according to EPFR Global.
- It's the 4th straight week of inflows for the country, and comes amid a 3rd quarter bull market, with FXI up 9%, MCHI up 8.4%, and EWH ahead 6.8%. The EEM rose just 2.8% and the iShares MSCI Asia ex-Japan ETF (NASDAQ:AAXJ) gained only 3.7%.
- ETFs: FXI, PGJ, GXC, YINN, FXP, YANG, MCHI, XPP, YAO, YXI, CHXF, CN, FCA, ASHR, PEK, CHNA, KBA
- Family Dollar (FDO +0.4%) is open to taking Dollar General's (DG +0.5%) $9B offer for the company if it agrees to divest enough stores in the combination to appease regulators, sources tell Bloomberg.
- The company doesn't think Dollar General's current proposal to shed 700 stores goes far enough.
- Shares of Dollar Tree (DLTR +0.1%) are on watch as the drama unfolds.
11:31 AM| Comment!
- "Doral (DRL +3.3%) has not left negotiations," says the bank's attorney, noting Treasury's new outside counsel - Foley & Lardner - has a conflict of interest, having represented Doral in a related matter.
- The judge presiding over the case says negotiations are to continue under her supervision without the participation of Foley & Lardner.
- Source: Press Release
- Previously: Doral Financial on the move ahead of hoped-for settlement
- Rackspace (RAX +3.9%) could receive a ~$45/share bid from H-P, UBS speculates in a morning note. Shares have rallied in response.
- Last month, TechCrunch reported hearing of an H-P bid for Rackspace, but later backtracked a bit. The following week, re/code stated multiple sources had "categorically denied" the H-P report.
- Shares are up 20% from their Aug. 12 post-earnings lows, aided by Dan Loeb and Blue Harbour Group's disclosures.
- Johnson & Johnson (JNJ -0.7%) invests $20M in the form of a convertible note in regenerative medicine company ViaCyte in exchange for a future equity stake and the rights to its type 1 diabetes combination product candidate VC-01.
- VC-01 works by loading pancreatic progenitor cells into a proprietary device that is implanted under the skin. The progenitor cells then mature into insulin-producing cells that assist the under-producing pancreas.
- The peer-reviewed journal Circulation Research publishes Aastrom Biosciences' (ASTM +9.1%) Phase 2a clinical trial results for its heart failure therapy candidate ixmyelocel-T as a treatment for advanced heart failure due to ischemic dilated cardiomyopathy (DCM). The study entitled "Safety and Efficacy of Ixmyelocel-T: An Expanded, Autologous Multi-Cellular Therapy, in Dilated Cardiomyopathy" showed that treatment with ixmyelocel-T reduced the incidence of major adverse cardiovascular events (MACE) in patients with ischemic DCM.
- In two open-label studies, a total of 61 patients were randomized. Fifty-nine were treated with ixmyelocel-T or standard-of-care (SOC). The ixmyelocel-T group experienced fewer MACE events than the SOC group, although the results do not appear to be statistically significant.
- A poster on an ixmyelocel-T study involving 39 patients disclosed that certain characteristics in the study design made it difficult (translation: impossible) to draw conclusions about efficacy. The only conclusion was the noting of some consistent trends. The published study only involves 20 additional subjects so the "conclusions" are most assuredly the same.
- Citing a lack of near-term catalysts and a belief its buy thesis hasn't played out, Deutsche has downgraded Cabot Oil & Gas (COG -2%) to Hold, and cut its target by $2 to $38.
- Deutsche upgraded Cabot last December, arguing shares are attractively valued relative to other Marcellus shale plays. Shares are down 15% YTD.
- Reuters reports Apple (AAPL +0.4%) originally wanted the iPhone 6 to use a single LCD backlight film layer instead of the normal two, but changed its mind after finding a single layer wasn't bright enough.
- The about-face is said to have put screen assembly "on hold for part of June and July." Production is now back on track, and suppliers are "working flat-out to make up for lost time." The WSJ reported in July Apple has placed orders for 70M-80M iPhone 6 units to be produced by Dec. 30.
- Japan Display, Sharp (OTCPK:SHCAY), and LG Display (LPL -2.6%) are reportedly the iPhone 6's LCD suppliers. Japan Display has previously said shipments for "a large customer" (believed to be Apple) might be delayed in calendar Q3.
- Apple has shrugged off the report, and is trading near $101.
- Hong Kong-based Arkkan Capital Management was started by Jason Brown, a former head of Goldman Sachs' Special Situation Group. If Blackstone (BX -0.9%) gets involved, it would be the P-E firm's 2nd backing of an Asia-based hedge fund since 2008, and the previous deal - with Senrigan Capital - allowed that fund to grow AUM to more than $1B in less than two years.
- Brown ran Goldman's Special Situations Group - known as SSG - between 2011 and his departure last year.
10:31 AM| Comment!
10:22 AM| Comment!
- Under Armour (UA +0.4%) has offered Oklahoma City All-Star Kevin Durant a 10-year basketball shoe contract worth between $265M and $285M, according to an EPSN report from earlier this week.
- Though Nike (NKE +0.4%) has had Durant under contract since 2007, the company is expected to let Durant go with Under Armour seen as paying a hefty premium just to gain some instant basketball shoe credibility.
- The Oregon sports juggernaut has another pretty solid reason to pass on matching Under Armour's offer with its Air Jordan brand still remarkably strong at 30.
- The major equity averages remain little-changed as do Treasury prices following the release of Janet Yellen's Jackson Hole address. Her talk sticks to the game plan - the first rate hike remains on tap for next year; the headline unemployment rate overstates labor market improvement; if employment or inflation picks up, hikes could come sooner than expected.
- SPY +0.1%, TLT +0.1%, TBT -0.2%
- Gold (NYSEARCA:GLD) remains as it was prior to the speech, +0.2% to $1,278 per ounce.
- The dollar (UUP +0.2%) creeps higher.
- In his order denying Allergan's (AGN -1%) motion to expedite its lawsuit against Valeant Pharmaceuticals (VRX +0.3%) and Pershing Square, Judge David Carter mentioned that Pershing Square has the votes to call a special meeting of shareholders. Allergan must call the meeting within 120 days after at least 25% of its shareholders request it in a Delaware court.
- The company's pursuers intend to use the meeting to oust six of the firm's directors and replace them with people favoring their proposed acquisition.
- Debate at the Fed is "naturally shifting" to when the central bank should begin to hike interest rates, says Janet Yellen in her speech at Jackson Hole, as the economy is getting closer to full employment and stable inflation.
- Nineteen labor market indicators tracked by the Fed suggest the decline in the headline unemployment rate overstates improvement in the labor market, she says. On the other hand, rate hikes could come sooner than expected should progress in employment pick up and/or inflation moves up at a speedier pace.
- "The Committee will be closely monitoring incoming information on the labor market and inflation in determining the appropriate stance of monetary policy."
- McDonald's (MCD +0.3%) names Mike Andres as its new top executive in the U.S. to replace Jeff Stratton who will resign in October.
- Andres worked his way up at the Golden Arches after starting as a store manager.
- McDonald's has lost market share in the U.S. this year with fast-food peers putting up stronger comps.
- Vodafone (VOD +1.3%) is paying €72.7M ($97M) to acquire a 72.7% stake in Greek broadband/phone service provider Hellas Online. The deal will bring Vodafone's total stake above 91%, and is expected to close in Q4.
- Hellas had 519K customers at the end of 2013, good for an estimated 11% local share. It had 2013 revenue of €227.4M, and EBITDA of €68.4M.
- The deal follows Vodafone's acquisitions of German cable provider Kabel Deutschland and Spanish cable provider ONO, as the carrier pushes ahead with its goal of offering mobile/wireline bundles (both by itself, and via partnerships) throughout Europe.
- Separately, The Daily Mail has passed on a rumor that AT&T's (NYSE:T) advisers are now "working around the clock on a cash bid worth more than £3 a share" for Vodafone.
- The rumor should be taken with a heavy dose of salt, given: 1) AT&T is currently preoccupied with closing the DirecTV acquisition. 2) It implies AT&T would be paying a 46% premium to Vodafone's current London trading price, and valuing the company at ~$130B. 3) AT&T, which has a $179B market cap and $84B in debt, would be very hard-pressed to finance a ~$130B deal solely with cash.
- A 6-month prohibition on an AT&T bid for Vodafone ended in July. However, AT&T CEO Randall Stephenson stated in March "the window may be closing" for his company to acquire European wireless assets, and is reportedly unhappy with Vodafone's wireline expansion efforts.
9:43 AM| Comment!
9:42 AM| Comment!
- Keurig Green Mountain (GMCR +8.5%) and Kraft Foods Group (KRFT +0.3%) sign a new licensing deal which will see Kraft-branded packs sold for Keurig commercial and consumer coffee brewing systems in the U.S.
- Distribution will begin this fall.
- Financial terms of the arrangement weren't disclosed.
- What to watch: The deal is a bit of a coup for Keurig with Kraft selling unlicensed K-cup packets previously.
- Argus rings the register on its Buy call on Pacific Gas & Electric (NYSE:PCG), the team citing worry over the revised federal indictment from the San Bruno blast, as well as lower authorized ROE and pending equity dilution.
- Previously: PG&E faces new charges, potential $1.1B fine over San Bruno blast
- Investment firms weigh in on Gap (NYSE:GPS) following the retailer's Q2 report.
- Sterne Agee liked what it saw, reiterating its Buy rating and taking its price target to $50,
- Canaccord Genuity highlighted the potential for Gap to see long-term margin gains.
- Janney Capital upgrades the retailer to Buy from Neutral on the promise that omni-channel will drive sales growth.
- GPS +2.8% premarket
- Japanese passive component/RF module maker Murarta (OTCPK:MRAAF) is acquiring Peregrine Semi (NASDAQ:PSMI) for $12.50/share, or $471M, in cash. The price represents a 63% premium to Peregrine's Thursday close.
- The companies declare Peregrine's RF front end product line and silicon on insulator (SOI) process expertise complement Murata's mobile RF offerings. The deal is expected to close in late 2014 or early 2015.
- News of the deal arrives two days after Infineon announced it's buying International Rectifier for $3B. Both moves are part of a larger chip industry consolidation wave.
- Mallinckrodt (NYSE:MNK) announces the following executive changes pursuant to the Questcor (NASDAQ:QCOR) acquisition:
- SVP and Chief Strategy Officer Gary Phillips, M.D. appointed as SVP and President of Autoimmune and Rare Disease business (includes the commercial organization supporting H.P. Acthar Gel).
- Questcor SVP and Chief Compliance Officer Ray Furey appointed as SVP and Chief Compliance Officer at Mallinckrodt.
- Both executives will report to CEO Mark Trudeau. A search is underway for a Chief Strategy Officer.
- About 460 employees at Deere's (NYSE:DE) Waterloo, Iowa operation will be placed on indefinite layoff, effective October 20, "in response to current market demand for its products."
- Press release
- Following its earning release earlier this month, Deere had said to expect some trimming of jobs.
- Earlier this morning: Deere slips after Macquarie downgrade
- The stock remains lower by 1% in premarket trade.
- The Fresh Market (NASDAQ:TFM) trades higher after recording a slim earnings beat with its FQ2 report.
- Though higher costs dragged down the company's profit compared to a year ago, its plan to open more stores in the Southeast and reaffirmed guidance is helping to boost sentiment.
- TFM +6.7% premarket
- ZBB Energy (NYSEMKT:ZBB) has priced a public offering of 11,520,000 shares of common stock at a price of $1.12.
- The underwriter, Craig-Hallum Capital Group, has exercised its option to purchase 1,728,000 additional shares of common stock to cover over-allotments.
- Total gross proceeds of the offering are expected to be approximately $14.8M, and will total $13.5M after deducting the underwriter's discount and other expenses.
- The offering is expected to close on or around August 27, 2014.
- ZBB -13.2% premarket
- Kraft Foods Group (NASDAQ:KRFT) continues to try to revive its Jell-O brand as sales growth remains subdued.
- After trying to market a healthier sugar-free Jello-O variety, Kraft is back to highlighting the traditional family angle.
- Sales of Jell-O in the U.S. are down 19.2% since 2009.
- Inside the lunchbox: Analysts think the growth of yogurt and protein bars has crowded out Jell-O.
- Wynn Macau (NASDAQ:WYNN) doubles its estimate for design work for the renovation of the Wynn Macau and construction of the Wynn Palace.
- The company now sees spending 156M HKD ($20.1M).
- Though the amount isn't a back-breaking tally for Wynn Macau, analysts have been keeping a closer eye on capex spending at the casino operator.
8:31 AM| 5 Comments
- Citibank Japan had net income of $12.9M last year - that's less than the total compensation of CEO Michael Corbat, and it helps explain why C has reportedly put the unit on the block.
- “It is very difficult to make money from lending in Japan unless you’re in higher-margin consumer lending or if you’ve got a very large scale of operations like the megabanks have,” says analyst David Marshall. “In an environment in which interest rates are very low and investors are still somewhat risk adverse despite economics, it is hard to make money.”
- Among the possible buyers are Shinsei Bank and Mitsubishi UJF (NYSE:MTU), according to the Nikkei.
- Previously: WSJ: Citi considering sale of retail ops in Japan
- ISI Group downgrades Madison Square Garden (NASDAQ:MSG) to a Neutral rating from Buy.
- The company has seen a wave of brokerage firm downgrades over the last month on concerns over valuation.
- MSG has also become a battleground stock of sorts with short interest and momentum buyers creating added volatility.
- Rosneft (OTC:RNFTF) will take a 30% stake in North Atlantic Drilling (NYSE:NADL) at $9.25 a share in exchange for 150 of its drilling rigs, building on a preliminary agreement discussed in May.
- The deal represents a deepening of the already strong relationship between Rosneft and Seadrill (NYSE:SDRL), which owns 70% of North Atlantic Drilling.
- Last month, Rosneft agreed to lease six offshore drilling rigs from North Atlantic Drilling by 2022, in a contract worth $4.25B.
- Previously: Rosneft to acquire shares in North Atlantic Drilling
- Mylan (NASDAQ:MYL) begins shipping its potassium chloride extended release tablets (8 mEq (600 mg) and 10 mEq (750 mg)), generic versions of Upsher-Smith's Klor-Con, for the treatment of patients with hypokalemia, with or without metabolic alkalosis, digitalis intoxication and hypokalemic familial periodic paralysis.
- According to IMS Health, the U.S. market is ~$135M.
8:01 AM| Comment!
- The European Medicines Agency accepts Cubist Pharmaceuticals' (NASDAQ:CBST) Marketing Authorization Application for ceftolozane/tazobactam for the treatment of complicated urinary tract infections and complicated intra-abdominal infections. The European Commission should announce its decision by 2H 2015.
7:50 AM| Comment!
- Following the Air Force's mandatory inspections on all 157 of its F-16 D-model jets this week, 82 of the fighters are still grounded due to cracks between the front and rear pilot seats.
- The aging fleet of Cold War-era fighter jets underscores the U.S. Air Force's need for new equipment, say analysts.
- Incidents like these are expected increase in coming years, due to the relatively slow pace at which the military is buying F-35 fighter jets which will replace the F-16s.
- The F-35 program is facing its own set of issues, including funding, the delay of software testing and flight restrictions due to June's engine fire.
- Princess City Plaza has about 178.5K square feet of retail space and is 99% leased to retailers like Dick's, Old Navy, PetSmart, and others. Inland's (NYSE:IRC) JV with PGGM acquired the asset for $28.6M in cash subject to future earnout payments.
- The mall is located less than three miles from Notre Dame.
- Source: Press Release
- Chrysler (OTCPK:FIATY) doesn't plan on using aluminum in its Ram pickup line before 2020, according to Reuters.
- The strategy gives the Ram brand a potential selling point over the Ford (NYSE:F) F-series on the "toughness" perception, although the new lighter aluminum-bodied pickups from rivals will feature better fuel economy.
- Ram sales in the U.S. are up 19% YTD.
- Excluding specific items, net income of $2.418B of $1.62 per share vs. $2.195B and $1.45 one year ago. ROE of 20% slips 40 basis points.
- Personal & Commercial Banking net income up 1% from a year ago after excluding the loss related to the sale of RBC Jamaica.
- Wealth Management net income of $285M up 22%.
- Insurance net income of $214M up 34%.
- Investor & Treasury Services net income of $110M up 6%.
- Capital Markets net income hits a record $641M up 66%. "Trading and origination activity was robust this quarter."
- Basel III CET 1 ratio of 9.5% down 20 basis points from last quarter.
- Previously: Royal Bank of Canada boosts dividend by 6%
- Previously: Royal Bank of Canada beats by C$0.06
- Conference call at 8 ET
- RY flat permarket
- NeoGenomics (NASDAQ:NEO) announces that the underwriters of its recent stock offering have exercised their option for an additional 1.05M shares of common stock at $4.60 per share. Net proceeds of the offering now total ~$34.6M which will be used for working capital, capex and general corporate purposes.
- Piper Jaffray backs its Buy rating on Best Buy (NYSE:BBY) heading into the retailer's Q2 earnings release next week.
- The investment firm expects a negative BBY comp, but sees some gross margin improvement.
- Things may get easier in Q3 and Q4 for Best Buy when it starts to lap easier comps and with an iPhone launch scheduled.
- The deal with Raymond James provides for Fidus (NASDAQ:FDUS) to sell up to $50M worth of stock over time, with the broker receiving a 1.5% commission.
- At last night's close of $18.97, about 2.6M shares could be sold, adding nearly 20% to the float. Fidus' last reported net asset value was $15.09.
- SEC Form 497
- OMV (OTC:OMVJF) is now the latest energy group to withdraw its staff from Iraqi Kurdistan, as violence continues to escalate in the region.
- "We were able to book a gas find in Kurdistan but are not active at the moment. All the staff that were there have left," says CEO Gerhard Roiss. "We are also waiting and seeing (what happens) south of Crimea, where we had plans together with Exxon (NYSE:XOM)."
- Certain Midwest generation assets are being purchased from Duke Energy (NYSE:DUK) for $2.8B, and others from Energy Capital Partners for $3.45B.
- In total 12.5 megawatts of coal and gas generation is being acquired, nearly doubling Dynegy's (NYSE:DYN) existing portfolio to almost 26K megawatts.
- Dynegy has synergy targets of more than $40M per year, $200M in collateral efficiencies, and nearly $500M in present value cash tax savings.
- 2015 adjusted EBITDA and free cash flow accretion per share is expected to by about 125% and 220%, respectively (assuming both deals close this year).
- Financing: Roughly $5B in unsecured debt issuance, $1.25B in equity and equity-linked securities, including $200M in stock issued to ECP, and $950M in incremental revolving credit facilities.
- Conference call at 8:30 ET
- Source: Press Release
- The International Swaps and Derivatives Association has set Sept. 3 as the auction date to settle Argentina's CDSs.
- After a 14-to-1 vote yesterday, the ISDA determined that the auction will include the two controversial yen-denominated bonds in the list of deliverable securities.
- The auction, run by Creditex and Markit, will establish the payout that holders of protection on Argentine bonds will receive as a result of the country's recent default.
- Previously: Argentina CDS auction delayed until September
- ETFs: ARGT
- Stock index futures are marginally lower ahead of Janet Yellen's keynote address at the Jackson Hole conference set for 10 ET.
- Europe is lower by nearly 1%, with boosted tension in Ukraine as good of an excuse as any for the move. Asia closed moderately higher overnight.
- The 10-year Treasury yield is lower by two basis points to 2.39% and gold is up $7 per ounce to $1,282.
- ETFs: SPY, QQQ, SH, DIA, SSO, SDS, VOO, PSQ, IVV, SPXU, UPRO, TQQQ, SPXL, QID, RSP, SQQQ, DOG, QLD, DXD, RWL, EPS, UDOW, SDOW, DDM, BXUB, QQEW, QQQE, SPLX, SFLA, QQXT, BXUC, SPUU
7:01 AM| Comment!
- Rosneft (OTC:RNFTF) has agreed to acquire shares in North Atlantic Drilling (NYSE:NADL) through an asset swap and investments into the company's share capital.
- "The final parameters of the deal, including the amount of Rosneft's cash contribution in NADL's charter capital, will be defined upon receiving corporate and accountant's approvals which is expected till the end of the 2014," says Rosneft.
- The status of Kurdish crude oil will come to a head today, as the high-stakes dispute over a tanker carrying 1M barrels of Kurdish crude still situated in the Gulf of Mexico will be determined by a federal court in Texas.
- The ruling will define the status of importing the controversial crude, as the Iraqi Oil Ministry and the Kurdistan Regional Government wrangle over the latter’s right to produce and sell its natural resources.
- Previously: Kurds petition U.S. court to let tanker enter Texas
- ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, CRUD, USL, UWTI, DWTI, DNO, SZO, OLO, OLEM, TWTI
- London Stock Exchange (OTCPK:LDNXF) has announced that it is looking to raise £938M ($1.6B) to part fund the acquisition of stock index unit Frank Russell.
- LSE will offer 74,347,813 new shares at a price of 1,295 pence, a 30.1% percent discount to yesterday's closing price.
- The deal would give London Stock Exchange third place in the booming ETF market, behind market leaders S&P Dow Jones and MSCI.
- Russell ETFs: IWM, TZA, TNA, UWM, SPXS, IWF, SKF, URTY, IWD, TWM, IWO, IWN, RWM, SRTY, IWV, IWB, VTWO, VONE, IWW, IWZ, VTWG, UKK, ROLA, RTLA, FBG, THRK, UKF, SKK, EWRS, ONEK, TWOK, VTHR, VONG, VTWV, SMLV, UVT, VONV, UVG, EWRI, SJH, UWC, LGLV, TWQ, SJF, FIBG
- The DEA has reclassified hydrocodone combination drugs to stem a rise in their abuse, and will now label them in a category reserved for medical substances with the highest potential for harm.
- The move has been resisted by many drug makers and wholesalers, but others like Mallinckrodt (NYSE:MNK) support it and say it will have no significant impact on their business.
- Major makers of hydrocodone combination drugs include Actavis (NYSE:ACT), Teva (NYSE:TEVA), AbbVie (NYSE:ABBV), Zogenix (NASDAQ:ZGNX), Lannett (NYSE:LCI), and Alkermes (NASDAQ:ALKS).
- BP (NYSE:BP) is planning to spend A$10B ($9.3B) over the next decade on expanding its gas station network and developing oil and gas projects in Australia.
- The new objective is fueled by BP's new focus on expanding its retail business on the continent, while scaling back on refining operations.
- "The big opportunities we’re after is at the customer end of the business," says President Andy Holmes "Filling stations...that’s the area where we’re turning up our focus."
- CEO of the Japan Exchange Group (OTC:JPXGY), Atsushi Saito, says he supports the proposal for longer trading hours for the exchange and a decision over the long-debated issue will be made this year.
- Currently, JPX closes its trading day at 3pm, making its 5-hour trading day the shortest among major world exchanges.
- Federal prosecutors have uncovered that GM (NYSE:GM) lawyers were present at key meetings when information was discussed about auto problems of some vehicles, Reuters reports.
- The DOJ is probing what level the lawyers participated in those discussions and what they did afterward with the information that was shared during the meetings.
- GM has previously pinned most of the blame on lower-level employees and has left most of the company's tops execs untouched.
- The U.S. has indicated it will be expanding its international campaign to combat extremists of the Islamic State, and will likely extend its fight from Iraq into neighboring Syria.
- The Obama administration has outlined several different fronts to combat ISIS, including continued airstrikes, support for the new Iraqi central government and influencing Persian Gulf states to halt funding their citizens may be providing the extremist forces.
- ISIS is well-funded by its many criminal activities and seizure of numerous oil fields. The latter has caused trouble in crude markets, causing many unauthorized oil purchases and the indirect funding of the extremist militant group.
- ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, GULF, CRUD, USL, MES, UWTI, DWTI, DNO, SZO, OLO, OLEM, TWTI
- Allergan's (NYSE:AGN) request to advance its lawsuit against Valeant Pharmaceuticals (NYSE:VRX) and Pershing Square has been denied by a California federal judge.
- Allergan claims the two engaged in insider trading ahead of their takeover bid, saying their unusual partnership violated securities regulations.
- Pershing Square's Bill Ackman began acquiring a stake in Allergan in February in partnership with Valeant after the two had begun discussing offering a bid for the company. Ackman only disclosed his ~10% stake the day before they made the offer.
- Previously:The rhubarb continues as Allergan pursuers file countersuit
- In an emergency hearing held yesterday due to Argentina's newly proposed debt swap, Judge Thomas Griesa declared that the attempt to dodge his rulings was "lawless", but stopped short of finding the country in contempt of court.
- Meanwhile, a group of Argentina's exchange bondholders is working with Deutsche Bank to eliminate the "RUFO clause" preventing the sovereign from offering holdout creditors better terms than those of its 2005 and 2010 restructurings.
- ETFs: ARGT
- Due to Citigroup's (NYSE:C) $285M fraud settlement earlier this month, the bank will no longer be able to sell investments in hedge funds and private-equity funds to private clients.
- The restriction is the result of the "bad actor" rule adopted by the SEC in July of last year, which bars companies or individuals with a criminal conviction that occurred after September 2013 from participating in private offerings.
- Citigroup's private bank manages $310B, with clients being required to have a net worth of at least $25M.