The numbers: The earnings were OK. Video streaming service Netflix reported earnings per share of $0.49, which beat analyst estimations. Its revenue of $1.07 billion was in line with expectations. But its subscriber growth was disappointing, sending shares down by about 6% in after-hours trading.
These are hard times for venture capital firms. Fundraising for US-based VCs fell to its lowest period in about two years in the second quarter, dropping to $2.88 billion. That’s a 54% drop from the same period a year ago. In the meantime, the number of venture capital investments in the second quarter is at its lowest level since 2009, according to a report from PricewaterhouseCoopers and the National Venture Capital Association.
Yahoo announced today that it was repurchasing 40 million of its shares from activist investor Third Point, bringing the hedge fund’s Yahoo stake to below 2%. That means that Third Point head Dan Loeb, along with two other directors who were brought on because of a push for change by Loeb, will be resigning from Yahoo’s board. In a statement, Loeb said he is confident in Yahoo CEO Marissa Mayer, but the company’s recent earnings show it still has work to do in boosting revenue.
Microsoft’s stock plunge in the wake of disappointing earnings could force a compromise with shareholders pushing for a change.
It’s one of the most beloved words in the english language, and the new Nasdaq ticker symbol for RetailMeNot: SALE. Shares of the online coupons company have risen by more than 30% today in its debut as a public company. Its performance after its IPO gives it a valuation of about $1.4 billion.
It’s been a bad earnings season for technology and internet companies. Google, Microsoft, Intel, eBay, SAP AG and Oracle have all missed analyst expectations, sending their stock prices down. Overall, those six companies lost more than $61 billion in market value in the day after they reported earnings.
The numbers: They were solid. Industrial conglomerate GE reported earnings per share of $0.36, which beat analyst estimates. Revenues for the second quarter were $35.1 billion, which was slightly below expectations. Its stock was up by almost 2% in pre-market trading.
The numbers: Not good. Microsoft reported earnings per share of $0.66 (excluding a $0.07 inventory charge) on revenue of $19.9 billion in the fourth quarter, missing analyst estimates. The company’s shares were down by about 5.5% in after hours trading.
Alas, the saga over PC maker Dell is destined to go on for at least another week. The shareholder vote on the proposal to take Dell private was scheduled for today, but now it’s postponed until July 24. So get ready for another few days of posturing, changing votes and Carl Icahn-style saber rattling.
The Numbers: They were OK. EBay’s $0.63 earnings per share, on revenue of $3.88 billion, were largely in line with analyst estimates. Its net income dropped by 8%.
Activist investor Nelson Peltz finally went public today with his views on Pepsi. At the CNBC Delivering Alpha conference, Peltz laid out his vision for Pepsi, which includes acquiring snacks company Mondelez International for somewhere in the range of $35 a share to $38 a share. Peltz’s public declaration is meant to put pressure on Pepsi, which has said that big acquisitions are not a part of its strategy.
In the hyper-competitive world of finance, Wall Street banks have certain characteristics for which they are known. JP Morgan has the biggest balance sheet. Bank of America and Citigroup are major retail banks. Goldman Sachs is, well, Goldman Sachs.
Many people have observed that the run-up in Yahoo’s share price this year is largely due to its stake in Alibaba Group, China’s largest e-commerce company. But Yahoo’s latest earnings report shows just how valuable Alibaba is. And the stunning growth will likely spur even more buzz around Alibaba’s public offering, which could come at the end of this year.
The Numbers: Not good. Yahoo reported earnings per share of $0.35 on revenue of $1.07 billion in the second quarter, which beat analysts’ ho-hum estimates. But its revenues fell by 7% compared to the same period last year. Its outlook for the rest of the year was also disappointing. Yahoo shares were down by as much as 2.7% in after hours trading.
AT&T, the second largest US mobile carrier, has agreed to acquire smaller competitor Leap Wireless for $15 a share in cash. The deal, an important step for AT&T in its hunt for wireless spectrum, is another sign of consolidation in the US wireless telecom sector.
Twinkies snack cakes will be back on sale in the US on Monday. The return of the iconic yellow cakes comes after production was suspended when former parent company Hostess went bankrupt in late 2012. Earlier this year, the part of Hostess that includes the Twinkie brand was bought by C. Dean Metropoulos and private equity firm Apollo Global Management.
Activist investor Carl Icahn strikes again in the saga over PC maker Dell. He and Southeastern Asset Management have added a warrant, which could be exchanged for stock, to their $14-per-share offer for Dell. The move comes ahead of a July 18 vote on another Dell proposal, a $13.65-per-share, go-private deal from CEO Michael Dell, private equity firm Silver Lake and Microsoft.
The Numbers: They were good. JP Morgan beat analyst estimates with a second quarter earnings per share of $1.60 on revenue of $26 billion. Net income was up by 30%.
How high can Amazon’s stock stock go? The shares temporarily passed the $300 mark today for the first time, after e-commerce researcher ChannelAdvisor reported that Amazon’s June sales rose by more than 30%. Amazon’s business has been on a tear, but even those results were surprising given that June is usually a slow month. The results have made investors positively giddy.
Microsoft announced sweeping changes today to its corporate structure, eliminating the many division presidents the company once employed to focus on software and devices. In a memo called “One Microsoft,” Microsoft CEO Steve Ballmer said the move is aimed at consolidating its sprawling units under one strategy. Ballmer and his most trusted lieutenants will also gain more power from the move, as pressure mounts to reform the company’s strategy.
The US Senate Agriculture Committee heard testimony today on the pros and cons of the takeover of pork company Smithfield Foods by China’s Shuanghui International. The title of the hearing alone sounded foreboding: “Smithfield and Beyond: Examining Foreign Purchases of American Food Companies.” It’s clear that some US politicians won’t let the largest Chinese takeover of a US company go quietly, but what’s still unclear is how much it will matter in the end.
Online gaming company Zynga today unveiled its online gambling apps for Facebook that use real money, a major part of the company’s revamp to expand beyond social games. The online gambling apps will be launched in the United Kingdom, where online gambling is legal. Zynga investors cheered the news, sending shares up by as much as 2% today.
A US federal judge today found that Apple violated antitrust law by conspiring to raise the sale price of e-books before it entered that market. That sets the stage for a trial on damages; Apple is appealing the ruling. It’s just one of several lawsuits facing Apple that could impact its financial position—if only we could get some sense of the company’s overall litigation costs.
BlackBerry CEO Thorsten Heins put on a brave face for the company’s annual shareholder meeting today, just a few weeks after the firm reported an earnings loss that sent its shares plummeting. Heins said BlackBerry is still in the middle of its turnaround plan and asked investors for patience. He also said the company was open to any option that would create value for shareholders.
