MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Thursday, May 24, 2012
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6:16 PM Lehman Brothers (LEHMQ.PK) strikes a deal to buy the 26.5% stake it doesn't already own in apartment giant Archstone from BofA (BAC) and Barclays (BCS) for $1.58B, WSJ reports, ending the high-stakes chess game between Lehman and Sam Zell's Equity Residential (EQR). But Zell won't walk away empty handed, as his firm will get $150M in the deal. 5 Comments
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4:11 PM American Capital Mortgage (MTGE -2.6%) manages to claw back some of its big early loss after a secondary offering of 11M shares which raised $253M. As tipped two days ago, a price premium of about 10% over book value is too enticing for mREIT managements not to do a secondary. (PR) Comment!
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3:54 PM SEC staff will not recommend any enforcement action against Lehman or any of its former executives after completing a probe of possible financial fraud there, reports Bloomberg. "Repo 105 is magical," tweets Josh Brown, "It makes losses disappear long enough to file a 10Q, then they come back until the next Q is due." 9 Comments
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3:20 PM In shades of Fannie and Freddie, Spain's bailout of Bankia - originally slated at about €5B, then €7-10B, and now €15B - may grow further as the lender is expected to request even more tomorrow to meet a viability plan set up by new management. Comment!
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1:43 PM TD Bank's (TD -0.7%) earnings beat contrasts with Royal Bank of Canada (RY -4.1%), where earnings rose just 5% and missed expectations. The divergence: RBC's exit from the U.S. consumer market, while TD reported record profits from its American unit. Comment!
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11:50 AM Bank Q1 net profit rose 23% to $35.3B - the highest since Q2 2007 - as revenue rose 3.1% to $169.6B, the FDIC says in is quarterly report. However, loan balances fell $56.3B (0.8%) after three consecutive quarterly increases. Lower provisions for bad loans were a factor in the profit improvement. (PR) Comment!
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9:50 AM The $100M trading profit that underwriters are reported to have made by "greenshoe" short positions on Facebook may seem "like a giant conflict of interest," outside of Wall Street writes Fortune's Stephen Gandel, but no rules were broken and the potential trades were even disclosed in Facebook's prospectus." 4 Comments
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9:15 AM The WSJ details how one of the institutional investors that was notified by an underwriting bank of cuts to Facebook (FB) estimates, Capital Research & Management, decided not to invest in the IPO as a result. It's added that while such selective disclosure is normally illegal, it isn't for IPOs, due to laws that prevent analysts at underwriting banks from issuing research until 40 days after shares begin trading. FB +1.8%. (previous) 1 Comment
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3:50 AM BBVA (BBVA) is considering the sale of its pension businesses in Latin America, calling it an attractive but non-core unit. BBVA is slow-boating it, saying the strategic review will take several quarters and a decision is unlikely to be made this year. Comment!
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Wednesday, May 23, 2012
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9:43 PM Mostly left unsaid about the JPMorgan trading loss is the most crucial point, writes Sallie Krawcheck: The size and risk of the trade was identified not by management, but by the press, and then it took weeks for JPM to put a number on the loss - and this from one of the savvier management teams. Regulators need to take note before heaping more complexity on an already incredibly complex business. 10 Comments
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7:14 PM Clobbered over the last week due to Facebook's (FB) less-than-stellar IPO, GSV Capital (GSVC +4.9%) is now trying to downplay its Facebook exposure. Facebook only makes up 4% of GSV's overall holdings, says CEO Michael Moe, and 2013 IPO candidate Twitter is actually the company's largest position. Meanwhile, fellow Facebook owner SVVC has seen its price fall below its net asset value. 1 Comment
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6:00 PM H&R Block (HRB) names Gregory Macfarlane as the tax preparer's new CFO, replacing Jeff Brown. Macfarlane, who starts in the position on June 4, most recently served as chief financial officer of Ceridian from 2007 to 2011. Shares -0.8% AH. Comment!
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1:16 PM Morgan Stanley (MS -2.6%) has offered a price adjustment to Facebook (FB +2.5%) investors in the event they overpaid due to order execution problems, Dow Jones reports. The news comes as lawsuits fly, politicians huff and puff, and sources tell the WSJ MS and other underwriters have made a $100M profit through "greenshoe" short positions on Facebook shares (Felix Salmon recently explained the arrangement in detail). 8 Comments
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1:12 PM Aflac (AFL) is among the names that pop up when DividendChannel screens its top ranked dividend stocks for those which have also seen insider buying over the past 6 months. Insiders sell for a variety of reasons. They buy because they they want to make money. The stock currently yields 3.4%. 12 Comments
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12:48 PM Major brokerage reforms underway in China point to the desire to nurture its own investment banks to compete with the Goldman's and Morgan's of the world. Previously limited to trading and underwriting, brokerages will be allowed to expand into derivatives (CDO squared for Chinese mortgages!), asset management, and private equity. 3 Comments
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11:31 AM CVC Capital Partners is planning to raise as much as $13.5B for a European buyout fund, according to sources, joining a wave of investors (CG, BX, among others) looking to pick up cheap assets on the continent. Comment!
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10:02 AM More on the class-action suit against Facebook and Morgan Stanley: The firm handling the suit previously won $7B from Enron. Its complaint alleges remarks made in Facebook's S-1 about its ad outlook were "untrue statements" in light of reports an exec told analysts to lower their forecasts. Particularly incriminating, if true, are reports institutional demand fell due to the disclosure. That would make Facebook's situation the polar opposite of what may have recently happened with Groupon. 6 Comments
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