SAC Capital, under a cloud of insider-trading allegations, told employees it will survive as a hedge fund. In an email to employees sent yesterday, SAC President Tom Conheeney said the withdrawals of client money were “significant” but the hedge fund still has a stable capital base, according to a Bloomberg report.
Mark Pinucs, CEO of online gaming firm Zynga, had a heart-to-heart with his employees after announcing layoffs of 18% of the company’s work force. He said Zynga had become bloated and sluggish. The job cuts and office closures are a way of putting Zynga on a diet.
The man who got millions of customers to assemble the stylishly simple and cheap furniture of IKEA is handing over the baton, or the Billy bookcase, to a new generation. IKEA founder Ingvar Kamprad, 87, is stepping down from the board of Inter IKEA Holding SA, the company that controls the Inter IKEA Group. His youngest son, 43-year-old Mathias Kamprad, was named chairman of the holding company, replacing Per Ludvigsson.
Amazon is making a move into the online grocery business, offering delivery service to the Los Angeles area as early as this week, according to a Reuters report. Dubbed AmazonFresh, the service could be available in 20 other urban areas, including some outside the US, by next year.
IBM today announced its biggest deal to date under its new CEO, Virginia Rometty, who took over last year. The company acquired cloud computing firm SoftLayer to help it compete with Amazon, the leader in public cloud services.
The question of what Steve Cohen should do with his hedge fund SAC Capital, which is being investigated for insider trading, may be answered by his clients. Today is the deadline for investors to withdraw their money from SAC Capital, and media reports say clients are expected to pull out several billion dollars. SAC Capital executives have already considered becoming a family office that doesn’t manage any outside investor money. Now it may be forced in that direction.
The IPO for US telecommunications company Avaya, which first filed for a $1 billion public offering in 2011, seems to be back on track. After delaying its IPO last year, Avaya, which provides routers, virtual networks and telephone systems, recently filed documents with the SEC updating its financial information and other factors related to going public. It’s the latest sign that the IPO market, particularly for technology geared toward corporate customers, is hot.
Is Yahoo looking to revisit the terms of its deal with China’s largest e-commerce company, Alibaba Group? During the JP Morgan technology conference in May, Yahoo CFO Ken Goldman seemed to hint that it could. He complained about the US taxes Yahoo had to pay on the $7.6 billion sale of half of its 40% stake in Alibaba. And he’s not crazy about Yahoo getting another big tax bill when it sells its remaining Alibaba shares.
Brazil’s GDP growth has been disappointing, but one company remains bullish on the economy: cement producer Votorantim Cimentos. The Brazilian company today filed information relating to its upcoming IPO, which will raise almost $5 billion in one of the largest public offerings of the year. That’s a sign that despite the weak economy, appetite for Brazilian public offerings is healthy.
Today, PC maker Dell laid out its case for why shareholders should go for the proposed buyout of the company by a group led by CEO Michael Dell. (The other offer comes from two of Dell’s largest outside shareholders, Carl Icahn and Southeastern Asset Management). After months of offers and counteroffers, the fate of Dell will be revealed at a shareholder meeting on the Michael Dell deal on July 18.
The hand wringing over Shuanghui International’s purchase of US pork company Smithfield Foods began as soon as the deal was announced. The prospect of a Chinese company owning America’s largest producer of bacon, sausage and ham has stirred food safety activists, national security experts and politicians.
Softbank’s acquisition of Sprint Nextel is moving forward after a US government committee cleared the deal on national security grounds. Earlier today, we wondered if that would cause US satellite TV firm Dish Network to move on from its bid for Sprint and find a new target.
More than 80% of the stakeholders in the private company that owns the Empire State Building have approved IPO plans, according to an SEC filing today. The building in midtown Manhattan will be combined with 19 other properties to create the Empire State Realty Trust, which would be valued around $5 billion. This real estate investment trust (REIT) plans to go public to raise $1 billion in one of the largest US real estate IPOs ever.
If the first five months of this year are a sign, CEOs of troubled companies should be on notice that their tenure might not last much longer. A rise in shareholder activism, coupled with boards that have become more comfortable letting go of underperforming leaders, has produced a rash of departures in the C-suite. That puts more pressure on boards to make a better choice the second time around.
The Committee on Foreign Investment in the US (CFIUS), which reviews deals for national security issues, has cleared the way for Japan’s Softbank to acquire US wireless provider Sprint Nextel. Dish Network, Softbank’s rival bidder for Sprint, has been trying to discredit Softbank based on national security concerns. So what will it do next?
As we’ve already reported, Dish Network has been trying to discredit Japan’s Softbank, its rival bidder for US wireless provider Sprint Nextel. Dish says Softbank’s use of equipment made by Chinese firms Huawei and ZTE in Japan could imperil US national security, even though Softbank has already pledged not to use such equipment in the US.
The management prowess of Procter & Gamble used to be seen as an example of how to groom and keep talent. When AG Lafley retired as CEO in 2009, the market wasn’t worried because P&G had a deep bench of other qualified executives.
After a few losing investments, activist investor Bill Ackman finally scored a win today. Procter & Gamble announced that Alan George “AG” Lafley is coming out of retirement to replace Bob McDonald. Just a few weeks ago, Ackman said time was running out for McDonald to show improvements in the company’s performance.
The numbers: Good. Clothing retailer Gap reported a 43% jump in net income, beating expectations. Net sales increased by 7% to $3.7 billion. But analysts had forecast higher annual profits than Gap’s estimate of at least $2.52 in earnings per share. Gap blamed the weakening yen for its conservative forecast, since that decreases the profitability of its Japanese sales in dollar terms. As a result, the stock dropped in after-hours trading.
We’re awash in proclamations of the death of the PC, but you wouldn’t know it from the latest quarterly earnings of China’s Lenovo Group. The world’s second-largest maker of computers reported a surprising 90% bump in profit to $126.9 million, partly because it gained market share in PC sales. Lenovo now has a 15.3% share of the PC market, compared to Hewlett-Packard’s top spot of 15.7%.
The numbers: They were good. PC maker Hewlett-Packard reported a 32% decline in profit, but that still beat analyst expectations. Net revenue was also down by 10%, but the company raised the lower end of its annual forecast by $0.10 to $3.50 earnings per share.
In takeover wars for a company, it’s normal for the fighting to get a little dirty. But Dish Network’s latest accusations against Japan’s Softbank—both of which are vying to buy Sprint, the US’s number-three mobile carrier—are a bit ridiculous.
Will one of the retailers for the 1% get a new owner? Luxury department store retailer Saks Fifth Avenue is exploring a sale, according to media reports. Although luxury goods sellers have fared better than middling retailers since the financial crisis, their sales haven’t returned to pre-crisis levels. In fact, the real estate holdings for companies like Saks, which has locations in large cosmopolitan cities like New York and Chicago, may be more valuable than its services.
So, Jamie Dimon gets to keep his dual roles as CEO and board chairman of JP Morgan, according to the results of a shareholder vote on a proposal to split those positions. But it wasn’t a total loss for the bank’s investors. And, breaking with JP Morgan’s shareholder gathering tradition, the critiques of shareholders were definitely heard at this year’s annual meeting.
