- One-Ship Ukraine Navy Defies Russia to the End (WSJ)
- Crimea-Induced Trading Surge Stokes Moscow Exchange Rally (BBG)
- Moscow says Ukraine stops Russian crews disembarking in Kiev (Reuters)
- New images show more than 100 objects that could be plane debris (Reuters)
- Anger of Flight 370 Families Explodes in Beijing (BBG)
- Murdoch Promotes Son Lachlan in Succession Plan for Empire (BBG)
- Facebook to buy virtual reality goggles maker for $2 billion (Reuters)
- Syrian Regime Exploits Rebel Despair (WSJ)
- King Digital IPO price may not bode well for stock (Reuters)
- Rothschild in Twitter Spat as Bakries Cut Ties With Miner (BBG)
- Spooked by defaults, China banks begin retreat from risk (Reuters)
- Mt. Gox Cooperating With Police (WSJ)
- New York Times to Introduce New Digital Subscriptions (WSJ)
Overnight Media Digest
WSJ
* Facebook Inc made its second big acquisition of the year, agreeing Tuesday to acquire Oculus VR Inc, a 20-month-old maker of virtual-reality goggles, for $2 billion in cash and stock. The deal highlights the intense competition among big technology companies for promising startups, even when those startups, like Oculus and WhatsApp, have little revenue. (http://ift.tt/1jtsK0J)
* BlackRock Inc Chief Executive Laurence Fink has privately warned big companies that dividends and buybacks that activists favor may create quick returns at the expense of long-term investment. In doing so, the head of the world’s largest money manager by assets lent his voice to a popular criticism of activist investors, even as his firm sometimes aligns with and may benefit from their efforts. (http://ift.tt/1jtsK0L)
* One of JPMorgan Chase & Co’s top executives quit suddenly to take a top job in private equity firm Carlyle Group , a departure that raises new questions about who will eventually succeed Chief Executive James Dimon. Michael Cavanagh’s decision to leave his job as co-head of J.P. Morgan’s Wall Street operations marks the latest in a long line of departures from Dimon’s inner circle. (http://ift.tt/OYQxrj)
* The Securities and Exchange Commission, under pressure from the asset-management industry, is preparing to exempt a majority of money-market mutual funds from a central plank of rules intended to curb risks in the $2.6 trillion market, according to people familiar with the agency’s discussions. (http://ift.tt/OTc4St)
* Activist investor Dan Loeb sued auction house Sotheby’s to remove its so-called poison pill, setting up a crucial first test for a new generation of corporate defenses aimed at thwarting activist hedge funds. (http://ift.tt/1jtsMpa)
* America’s moviegoing audience shrank yet again in 2013, and theater owners are considering a radical idea to turn the tide: cutting ticket prices. A report from the Motion Picture Association of America released Tuesday said that domestic movie box-office sales rose to $10.9 billion last year, from $10.8 billion in 2012, but the number of tickets sold slipped yet again, this time 1.5 percent to 1.34 billion. (http://ift.tt/1jtsKgZ)
* Rescue crews continued to search through the night after a devastating weekend mudslide killed at least 16 people. Crews recovered two more bodies Tuesday but believe they located eight more, possibly bringing the death toll to 24. (http://ift.tt/1jtsMpe)
FT
Mobile game maker King Digital Entertainment raised $500 million from its stock market float late on Tuesday, valuing the company’s equity at $8 billion on a fully diluted basis and making it one of the most valuable.
Britain’s government announced plans to sell more than 4 billion pounds worth of its shares in Lloyds Banking Group , moving a step closer to returning the lender to the private sector before next year’s election.
Facebook said it would buy Oculus VR, a maker of virtual-reality glasses for gaming, placing a $2 billion bet that virtual reality headsets will be the next big social platform after computers and smartphones.
Banks have shelled out $100 billion in U.S. legal settlements since the financial crisis, according to Financial Times research, reflecting a substantial shift in political attitudes towards the financial sector.
Santander UK is to be slapped with a 12.5 million-pound fine by Britain’s Financial Conduct Authority on Wednesday for providing unsuitable investment advice to customers in its branches.
NYT
* Facebook Inc on Tuesday said it had reached a $2 billion agreement to buy Oculus VR, maker of a virtual reality headset. The acqusition reflects the Facebook founder’s belief that virtual reality could be the next big computing platform after mobile and social networking could become an immersive, 3-D experience. (http://ift.tt/1judlwW)
* Michael Cavanagh, considered to be one of the likely candidates to replace JP Morgan Chase’s CEO Jamie Dimon, said on Tuesday that he would resign as JPMorgan’s co-head of investment banking to take on the role of co-chief operating officer of the Carlyle Group. (http://ift.tt/1judj8i)
* Candy Crush Saga-maker King Digital Entertainment priced its IPO at $22.50 per share. The company, valued at $7 billion post the IPO, will start trading on the New York Stock Exchange under the ticker symbol KING from Wednesday. (http://ift.tt/1judj8k)
* The IRS announced on Tuesday that it would treat bitcoin, the computer-driven online money system, as property rather than currency for tax purposes, a move that forces users who have grown accustomed to operating under the government’s radar to deal with new tax issues and reporting requirements. (http://ift.tt/OZZW1Q)
* Baxter International, the country’s only manufacturer of injectable nitroglycerin, recently told hospitals that it was sharply cutting shipments of the drug. The shortage of nitroglycerin, a critical drug for heart patients, is the latest example of how patchy the supply of some of the nation’s most critical drugs has become in recent years. (http://ift.tt/1judj8o)
* Senate Democrats dropped reforms of International Monetary Fund governance from a Ukraine aid package on Tuesday, handing President Obama an embarrassing defeat. (http://ift.tt/1judj8q)
* Democrat senators Edward Markey of Massachusetts and Richard Blumenthal of Connecticut introduced a Senate bill on Tuesday that would make auto companies give the National Highway Traffic Safety Administration copies of insurance claims made against them and lawsuits about fatal crashes in which they were defendants. This comes as investigators begin to pour over internal General Motors documents seeking to understand the failure by regulators and the company to act on reports of a defect in Chevrolet Cobalts and other cars. (http://ift.tt/1judj8s)
* Walmart is recalling 174,000 dolls because they could overheat and burn consumers. The Consumer Product Safety Commission said on Tuesday that the My Sweet Love/My Sweet Baby Cuddle Care Baby Doll has a circuit board in its chest that can overheat. Walmart had reports of 12 incidents including two burns or blisters to the thumb. (http://ift.tt/OZZZus)
* A start-up, Junction Investments, plans to open for business on Wednesday, allowing wealthy individuals to invest in movies alongside veteran film financiers. (http://ift.tt/OZZZuv)
Canada
THE GLOBE AND MAIL
* Quebec Premier Pauline Marois struggled to regain control of a floundering Parti Quebecois election campaign amid signs the Quebec Liberal Party is widening its lead among voters in the final weeks of the election race and could be on track to form a majority government. (http://ift.tt/1eOnT5O)
* Prime Minister Stephen Harper said the country must begin to “assess the pain” of increasing pressure on the Putin government over Russia’s seizure of the Crimean peninsula, after the Group of Seven countries said it is prepared to impose economic sanctions if Moscow escalates the crisis further. The Prime Minister has singled out the prospect of sanctions against Russia’s energy industry, which would in all likelihood curtail the ability of Canadians, and those in other G7 countries, from doing petroleum-related business with Russians. (http://ift.tt/1g0edkV)
Reports in the business section:
* Goldcorp Inc Chairman Ian Telfer dared Osisko Mining Corp to find an alternative to his company’s $3-billion hostile offer, saying the smaller miner has had more than enough time. It has been more than two months since Vancouver-based Goldcorp announced the unsolicited bid, and time is running out for Osisko. (http://ift.tt/1h8Vuby)
NATIONAL POST
* Quebec Premier Pauline Marois rejected Quebec Liberal Party leader Philippe Couillard’s call to make public the extent of her considerable personal wealth. Couillard announced that he would be publishing his 2012 tax return as well as an accounting of all assets held by him and his wife, Suzanne Pilote on his party’s website before Thursday’s leaders’ debate. (http://ift.tt/1eOnT5S)
* Conservative senator Don Meredith’s spending is under special scrutiny from the Senate itself after he made a trip to Washington that the Senate’s leadership didn’t approve. Meredith, a pastor from Toronto, spent five days in Washington for the National Prayer Breakfast, a gathering of some 3,000 international politicians and diplomats that included U.S. President Barack Obama and members of the United States Congress. (http://ift.tt/1g0eaWj)
FINANCIAL POST
* BlackBerry Ltd’s plan to transform BlackBerry Messenger into a money maker will begin in earnest sometime in the next week with the launch of a new virtual storefront within the popular instant messaging application. BlackBerry plans to roll out a new virtual goods storefront known as BBM Shop sometime in the next week as part of a broader previously announced strategy to begin generating revenue from the company’s most popular piece of software. (http://ift.tt/1izoOIa)
* An official at Canada’s top banking regulator said the country’s biggest financial institutions need to do a better job managing risks within their individual retail business lines, and communicating these risks to the board of directors. (http://ift.tt/1g0edkX)
Britain
The Telegraph
TREASURY TO SELL LLOYDS SHARES WORTH 4 BLN STG, REDUCING STAKE TO 25 PERCENT
The Government has launched the largest sale yet of shares in Lloyds Banking Group in a deal that could raise more than 4 billion pounds ($6.60 billion) for the taxpayer. (http://ift.tt/1iyFcsf)
ONLINE TAKEAWAY SERVICE JUST EAT TO BE VALUED AT OVER 1 BLN STG IN IPO
Online food takeaway service Just Eat is expected to be valued at more than 1 billion pounds on Wednesday as it reveals the price of its initial public offering in London. (http://ift.tt/1iyF9N4)
The Guardian
ROYAL MAIL FACES STRIKES OVER PLAN TO SHED 1,600 STAFF
Postal unions have reacted angrily and raised the prospect of industrial action after Royal Mail announced plans to cut 1,600 jobs in the postal group’s first big round of redundancies since it was privatised in October. (http://ift.tt/1h864j0)
KINGFISHER ANNOUNCES SHAREHOLDER PAYOUT AFTER SURGE IN PROFITS
Kingfisher, the DIY group that owns B&Q, will pay out about 200 million pounds to shareholders this year after its financial performance experienced a revival along with the British housing market. (http://ift.tt/1iyF9Na)
HONDA TO CUT SWINDON CAR PRODUCTION, THREATENING 340 JOBS
Honda Motor is to cut production at its Swindon factory from three shifts to two, threatening 340 jobs at the car manufacturer. (http://ift.tt/1h866aE)
The Times
CENTRICA SEEKS ENERGY BOOST WITH FIRST FORAY INTO IRELAND
A consortium led by Centrica has bought the supply division of Bord Gais for 1.1 billion euros ($1.52 billion). The owner of British Gas intends to replicate its integrated model of owning power stations and a supply business in the Republic of Ireland, which offers better growth prospects than Britain. (http://ift.tt/1p3bHSa)
RSA RESPONDS TO CRISIS WITH SHARE DISCOUNT
Shareholders have been invited into a deeply discounted 773 million pound cash call from RSA as the insurer attempts to restore its reputation after financial problems and a scandal in Ireland. (http://ift.tt/1iyF9Nc)
SCOTS INDEPENDENCE PLAN ‘DOES NOT ADD UP’
The Scottish Government’ plan to leave Britain simply does not make sense even after its prized oil and gas revenues are taken into account, the country’s biggest business lobby group has warned. (http://ift.tt/1h864jf)
The Independent
NAT ROTHSCHILD’S BUST-UP WITH WEALTHY BAKRIE FAMILY TURNS INTO TWITTER STORM
Financier Nat Rothschild and a prominent Indonesian businessman, Aga Bakrie, engaged in a spectacular and very public bust-up on Twitter after the wealthy Bakrie family agreed to cut ties with London-based investors and buy back their stake in the mining firm Bumi, now known as Asia Mineral Resources . (http://ift.tt/1h866aI)
TULLOW OIL DISCLOSES TAX IN TRANSPARENCY DRIVE
Tullow Oil has broken ranks with the rest of the industry to disclose for the first time how much tax and royalties it pays governments in the mainly poor countries in which it operates, on a project-by-project basis. (http://ift.tt/1h864zv)
Fly On The Wall 7:00 AM Market Snapshot
ECONOMIC REPORTS
Domestic economic reports scheduled today include:
Durable goods orders for February at 8:30–consensus up 1.0%
ANALYST RESEARCH
Upgrades
Carlyle Group (CG) upgraded to Buy from Neutral at UBS
Covanta (CVA) upgraded to Outperform from Neutral at RW Baird
Garmin (GRMN) upgraded to Buy from Neutral at Citigroup
Penn National (PENN) upgraded to Outperform from Market Perform at FBR Capital
Sirius XM (SIRI) upgraded to Overweight from Equalweight at Barclays
Downgrades
Abraxas Petroleum (AXAS) downgraded to Hold from Buy at Canaccord
Alpha Natural (ANR) downgraded to Neutral from Buy at UBS
Arch Coal (ACI) downgraded to Neutral from Buy at UBS
CONSOL (CNX) downgraded to Neutral from Buy at UBS
EPL Oil & Gas (EPL) downgraded to Market Perform from Outperform at Cowen
Eni SpA (E) downgraded to Underweight from Neutral at HSBC
Equity Lifestyle (ELS) downgraded to Neutral from Buy at Citigroup
Home Properties (HME) downgraded to Neutral from Buy at Citigroup
Peabody (BTU) downgraded to Neutral from Buy at UBS
Telefonica (TEF) downgraded to Underperform from Neutral at BofA/Merrill
WPX Energy (WPX) downgraded to Market Perform from Outperform at Cowen
Walter Energy (WLT) downgraded to Neutral from Buy at UBS
Yadkin Financial (YDKN) downgraded to Market Perform from Outperform at Keefe Bruyette
Initiations
athenahealth (ATHN) initiated with a Neutral at SunTrust
Glimcher Realty Trust (GRT) initiated with a Buy at MLV & Co.
Macerich (MAC) initiated with a Buy at MLV & Co.
Manning & Napier (MN) initiated with a Strong Buy at Raymond James
Medidata Solutions (MDSO) initiated with a Buy at SunTrust
PFSweb (PFSW) initiated with a Buy at B. Riley
Rouse Properties (RSE) initiated with a Hold at MLV & Co.
Simon Property (SPG) initiated with a Hold at MLV & Co.
Tesla (TSLA) initiated with a Neutral at UBS
WebMD (WBMD) initiated with a Buy at SunTrust
COMPANY NEWS
Facebook (FB) announced a deal to acquire virtual reality technology company Oculus in a cash and stock deal worth about $2B
News Corp (NWS, NWSA) named Lachlan Murdoch non-executive co-chairman
21st Century Fox (FOX, FOXA) promoted James Murdoch to Co-COO
New York Times (NYT) launched new subscription plans
Insmed (INSM) said it will announce results from its Phase 2 clinical trial of Arikayce to treat lung infections this morning
International Game (IGT) cut its FY14 earnings outlook, gave a Q2 earnings view that was well below expectations and announced plans to cut 7% of its global workforce
Body Central (BODY) said its losses and negative cash flows “raise substantial doubt about [the company’s] ability to continue as a going concern”
Global Cash Access (GCA) said its cash access deals with Caesar’s (CZR) were not renewed, and added that it was not willing to accept the business and financial terms proposed by Caesar’s
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Alexco Resource (AXU), Steelcase (SCS), Landec (LNDC), Five Below (FIVE), Cherry Hill Mortgage (CHMI), Cyclacel Pharmaceuticals (CYCC), Sungy Mobile (GOMO), PVH Corp. (PVH), Intra-Cellular (ITCI)
Companies that missed consensus earnings expectations include:
EXFO Inc. (EXFO), Evoke Pharma (EVOK), Five Prime (FPRX), Gevo (GEVO)
NEWSPAPERS/WEBSITES
Amazon (AMZN) dropping some programming from Scipps (SNI), Discovery (DISCA), WSJ reports
Target (TGT) looking again at why security team missed signs of hackers, WSJ reports
Coca-Cola (KO) defends executive pay proposal, FT reports
Honda (HMC), Toyota (TM) to introduce fuel cell cars next year, Nikkei reports
Obamacare enrollment deadline to be extended, NY Times says
Blackstone (BX) near $5.5B plus deal for Gates Global, Reuters reports
Carlyle’s (CG) PQ holdings said to receive offers from several firms (BX, KKR), Bloomberg says
SYNDICATE
Bright Horizons (BFAM) files to sell 7M shares of common stock for holders
Cache (CACH) files $15M mixed securities shelf
Endocyte (ECYT) files to sell 4.5M shares of common stock
Essex Property Trust (ESS) announces 450k shares equity distribution agreement
Inuvo (INUV) files 15M mixed securities shelf
King Digital (KING) 22.2M share IPO priced at $22.50
Nord Anglia (NORD) 19M share IPO priced at $16.00
Regency Energy Partners (RGP) files to sell 4.04M common units for holders
Solazyme (SZYM) files to sell 5M common shares
Veeva (VEEV) 12M share Secondary priced at $26.35
William Lyon Homes (WLH) files to sell 2M shares of Class A common for holders
via Zero Hedge http://ift.tt/1fiD0kQ Tyler Durden