Dow Chemical's (DOW -1.6%) bid to throw out a $1.06B price-fixing verdict imposed after customers accused it of conspiring to artificially inflate polyurethane prices is rejected by a U.S. appeals court, which says there is enough evidence to support the class action award.
The 10th U.S. Circuit Court of Appeals in Denver says new U.S. Supreme Court limits on class actions do not require Dow customers to sue individually, even if some could have avoided price hikes by negotiating or using rival products.
Dow says it is disappointed in the decision and will appeal, including to the Supreme Court if necessary.
Many in the sector (REM -0.9%) presented today at the JMP Financial Services and Real Estate Conference. Those heard in full by this reporter - CYS Investments (CYS -1.6%), Hatteras Financial (HTS -0.9%), and MFA Financial (MFA -1.3%) - presented nothing alarming, but the sector is nevertheless lit up bright red.
Other presenters included Capstead Mortgage (CMO -1.2%), Arlington Asset (AI -2.2%), Dynex Capital (DX -1.7%), Invesco (IVR -1.2%), Armour (ARR -2%), New York Mortgage Trust (NYMT -3.2%), Javelin Mortgage (JMI -1.5%), Five Oaks Investment (OAKS -1.9%), and Apollo Residential (AMTG -1.1%).
MTL borrowed heavily before the financial crisis, and creditors have pushed for a repayment rather than restructuring of its $8.7B in net debt; Russian leaders had said bankruptcy was “a probable scenario” instead of restructuring.
The bottom has fallen out of Walter Investment (WAC -5.9%) over the past few minutes. There's no notable news to report as yet, but perhaps it's been hit with a regulatory investigation similar to those faced by Ocwen Financial (OCN -1%) and Nationstar Mortgage (NSM -1.1%).
Teekay (TK +13.8%) says it will change its dividend policy to link its quarterly payouts to growing cash flows from its two MLPs, Teekay LNG Partners (TGP -0.2%)and Teekay Offshore Partners (TOO -1.7%), and includes an 80% increase in its annual dividend effective Q1 2015.
The moves prompt Deutsche Bank to upgrade shares to Buy from Hold with a $90 price target, raised from $68; the firm says TK’s "bold" new strategy should result in a 20%/year growth in TK’s dividend for the foreseeable future.
Microvision (MVIS +11.1%) has spiked higher over the last 20 minutes of trading. The apparent trigger: A Patently Apple column noting Apple has received a patent for a holographic display that could be used in future Macs or iDevices.
The patent describes a solution that can "provide a three-dimensional viewing and interacting experience, without the requirement of a reflective medium or wearing 3D glasses."
Century Aluminum (CENX +9.9%) is upgraded to Buy from Neutral with a $30 price target, up from $21, at BofA/Merrill, which revises its outlook upon taking a more positive stance on global aluminum markets.
BofA believes the recent retreat in the stock offers an attractive entry point, and it expects earnings to be revised up near term on mark-to-market aluminum price recovery.
The firm expects CENX to swing to $212M net cash as of year-end 2015 from $63M net debt as of year-end 2014, and sees recently trimmed power costs at its Sebree and Hawesville smelters boosting earnings.
Thinly-traded micro cap Addus HomeCare (ADUS +18.6%) tries to stem its sharp down trend today. Shares are up on average volume in a tepid response to an upgrade by Oppenheimer to Outperform with a $24 PT.
Even with today's up move, shares are still down 38% from October 21's peak of $32.40.
Zillow (Z -2.6%) and Trulia (TRLA -1.8%) are selling off following news rival Move is being sold to News Corp. for $950M.
News Corp. promises to "use [its] media platforms and compelling content to turbo-charge traffic growth and create the most successful real estate website in the U.S." The media giant also plans to boost Move's "sales and marketing support."
Move's sites (inc. Move.com) currently reach 35M people/month; Zillow claimed 86.3M monthly unique users in August, and Trulia claimed 54M as of June.
Zillow and Trulia are respectively down 29% and 27% from their July highs, which were hit amid merger-related euphoria.
Bernstein has downgraded ARM (ARMH -1.7%) to Underperform. The firm thinks forward estimates are too optimistic.
After entering the year trading at steep multiples, ARM has underperformed the Nasdaq by a large margin; shares now trade at 29x 2015E EPS. Investors have historically granted ARM a premium on account of its near-monopoly position in the CPU core IP space.
Having just appeased one activist (Carl Icahn) by announcing plans to spin off PayPal, eBay (EBAY +6.8%) is now set to contend with another: Dan Loeb says his firm (Third Point LLC) has a "significant position" in eBay, and has held talks with outgoing CEO John Donahoe.
eBay remains sharply higher, albeit off its premarket highs. Street commentary about the spinoff has been positive - Cowen thinks both Marketplaces and PayPal will be better-equipped to deal with rivals as independent companies, and calls Amex's Dan Schulman a "compelling choice" to run PayPal. With Marketplaces making up 27% of PayPal's Q2 transactions, overlap between the businesses is deemed "manageable."
SunTrust thinks eBay is worth somewhere between $55.72-$88.74/share on a sum-of-the-parts basis. Re/code notes an independent PayPal could have an easier time recruiting talent and battling with upstarts such as Apple and Stripe; the latter has recently scored deals with Facebook and Twitter.
Ceragon (NASDAQ:CRNT) has obtained follow-on orders from an unnamed "global Tier 1 operator serving 20 countries across Asia and Africa" (Vodafone?). The company has now received over $50M in orders from the carrier in 2014.
Ceragon's Evolution Long Haul microwave radios will be deployed in Africa to help the carrier expand its mobile footprint, and its FibeAir mobile backhaul systems will be deployed in Asia to both bolster existing 3G networks and facilitate 4G upgrades.