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Just over a month ago, when we shared our cynical view on the “hopium” inspired LBO of Blackberry, we commented as follows: “In other words an LBO, one which however has not only one but many outs: “There can be no assurance that due diligence will be satisfactory, that financing will be obtained, that a definitive agreement will be entered into or that the transaction will be consummated.” Which means that once the buyers figure out the potential disaster on the books, expect the final price (if any) to be revised lower as one after another MAC clause is triggered.” Not even we were right: as it turns out moments ago, the Globe & Mail reported that having looked at the BBRY, not only will the price be revised lower, but the “purchase” price will be eliminated altogether as any deal is now dead, the company will do a convert offering instead and deadpan CEO Torsten Heins is history.

#Breaking: #BlackBerry abandons plan to find buyer, will replace CEO $BBRY $FFH.CA $BB.CA. Details soon from @globebusiness

— Globe Investor (@globeinvestor) November 4, 2013

Instead of selling itself, Blackberry is doing a Hail Mary convert offering, which net of all greenshoes, will amount to 19.2% equity dilution: ” If an additional U.S. $250 million of Debentures is issued and all U.S. $1.25 billion of Debentures were converted, the common shares issued upon conversion would represent approximately 19.2% of the common shares after giving effect to the conversion, based on the number of common shares currently outstanding.”

And here is the reaction…

Via The Globe And Mail,

BlackBerry Ltd. is abandoning a plan to find a buyer and will instead raise $1-billion of new funds and replace its chief executive and some directors, sources said.

 

…

 

The new plan will involve raising roughly $1-billion by selling convertible notes to a group of investors, according to people familiar with the transaction. Chief executive officer Thorsten Heins will depart the company, and the company will announce changes to its board, the people said.

And the official release:

BlackBerry (BBRY)(BB.TO), a world leader in the mobile communications market, today announced that it has entered into an agreement pursuant to which Fairfax Financial Holdings Limited (“Fairfax”) and other institutional investors (collectively, the “Purchasers”) will invest in BlackBerry through a U.S. $1 billion private placement of convertible debentures. Fairfax has agreed to acquire U.S. $250 million principal amount of the Debentures. The transaction is expected to be completed within the next two weeks.

 

Under the terms of the transaction, the Purchasers will subscribe for U.S. $1 billion aggregate principal amount of 6% unsecured subordinated convertible debentures (the “Debentures”) convertible into common shares of BlackBerry at a price of U.S. $10.00 per common share (the “Transaction”), a 28.7% premium to the closing price of BlackBerry common shares on November 1, 2013. The Debentures have a term of seven years. Based on the number of common shares currently outstanding, if all of the U.S. $1 billion of Debentures were converted, the common shares issued upon conversion would represent approximately 16% of the common shares outstanding after giving effect to the conversion.

 

Upon the closing of the transaction, John S. Chen will be appointed Executive Chair of BlackBerry’s Board of Directors and, in that role, will be responsible for the strategic direction, strategic relationships and organizational goals of BlackBerry. Prem Watsa, Chairman and CEO of Fairfax, will be appointed Lead Director and Chair of the Compensation, Nomination and Governance Committee and Thorsten Heins and David Kerr intend to resign from the Board at closing.

 

In addition, Mr. Heins will step down as Chief Executive Officer at closing and Mr. Chen will serve as Interim Chief Executive Officer pending completion of a search for a new Chief Executive Officer.

 

Today’s announcement marks the conclusion of the review of strategic alternatives previously announced on August 12, 2013.

 

“Today’s announcement represents a significant vote of confidence in BlackBerry and its future by this group of preeminent, long-term investors,” said Barbara Stymiest, Chair of BlackBerry’s Board. “The BlackBerry Board conducted a thorough review of strategic alternatives and pursued the course of action that it concluded is in the best interests of BlackBerry and its constituents, including its shareholders. This financing provides an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position. Some of the most important customers in the world rely on BlackBerry and we are implementing the changes necessary to strengthen the company and ensure we remain a strong and innovative partner for their needs.”

 

Ms. Stymiest added, “I am also pleased that John Chen, a distinguished and proven leader in the technology industry, has agreed to serve as BlackBerry’s Executive Chairman. I look forward to continuing to serve BlackBerry as a member of its Board of Directors and chair of the Board’s Audit and Risk Management Committee. On behalf of the Board, I would also like to thank Thorsten for his service to BlackBerry over the past six years. Under his leadership, BlackBerry established a more efficient cost structure, developed new products, saw the adoption of BES 10 and delivered the BlackBerry 10 platform. These are all significant accomplishments. We are grateful for his contributions and wish him well in his future endeavors.”

 

“Fairfax is a long-time supporter, investor and partner to BlackBerry and, with this investment, reinforces its deep commitment to the future success of this company,” said Prem Watsa, Chairman and CEO of Fairfax. “I look forward to rejoining the BlackBerry Board and to working with the other directors and management team, under John Chen’s leadership, to shape the next stage of BlackBerry’s strategy and growth.”

 

“I am pleased to join a company with as much potential as BlackBerry,” said Mr. Chen. “BlackBerry is an iconic brand with enormous potential – but it’s going to take time, discipline and tough decisions to reclaim our success. I look forward to leading BlackBerry in its turnaround and business model transformation for the benefit of all of its constituencies, including its customers, shareholders and employees.”

 

Pursuant to the Transaction agreement, the investors have an option to purchase up to an add
itional U.S. $250 million principal amount of Debentures within 30 days following closing. If an additional U.S. $250 million of Debentures is issued and all U.S. $1.25 billion of Debentures were converted, the common shares issued upon conversion would represent approximately 19.2% of the common shares after giving effect to the conversion, based on the number of common shares currently outstanding.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/-3B2jLGoB8Q/story01.htm Tyler Durden

Looking ahead, Thursday will be a busy day with the ECB (plus Draghi’s press conference) and BoE meetings. Some are expecting the ECB to cut rates as early at this week although most believe the rate cut will not happen until December. Draghi will likely deflect the exchange rate’s relevance via its  impact on inflation forecasts. This could strengthen the credibility of the forward guidance message, but this is just rhetoric — a rate cut would require a rejection of the current recovery hypothesis. They expect more focus on low inflation at this press conference, albeit without pre-empting the ECB staff new macroeconomic forecasts that will be published in December.

Elsewhere on Thursday, the advanced Q3 GDP report for the US is scheduled, which may have some bearing on market expectations for tapering. Consensus is calling for 2% QoQ ann growth. We’ll be interested in the nominal growth numbers as ever to see whether the recent global inflation downdraft continues to keep YoY US nominal GDP depressed. The first two quarters of the years have seen this number at only 3.1% – the lowest since 2010. Other data releases on Thursday include German industrial production and US initial jobless claims.

This week we have a lot of CB speakers from major regions. On Tuesday, BoJ Governor Kuroda will speak while we also await the BoJ minutes from the last meeting. Interesting to see what Draghi and other ECB speakers will say after a soft inflation number before the ECB announcement on Thursday. We forecast no change in the monetary policy stance. We also have a BoE decision on Thursday. Again, we do not anticipate change in the policy stance. Other MPC meetings this week: Australia, Russia, Poland, Czech Republic, Malaysia, and Peru – in all cases we and consensus forecast no changes in the policy rates.

In China on Saturday together with important data releases we also have the widely anticipated commencement of the 3rd plenary session during which a package of economic reforms could be announced.

Monday, Nov 4

• Euro Area ECB speakers: Asmussen, Nowotny
• Euro Area PMIs (Oct final): Consensus 51.3, previous 51.3 (Flash)
• US Fed speakers: Powell (FOMC voter), Rosengren (FOMC voter), Fisher (FOMC non-voter)
• US Factory Orders (Aug): consensus +0.3%, previous -2.4%
• US Factory Orders (Sep): consensus +1.8%
• UK PMI Construction (Oct): consensus 58.7, previous 58.9
• Turkey CPI (Oct): consensus +7.2%yoy, previous +7.9%yoy
• Also interesting: Spain PMI (Oct), UK HBOS House Prices (Oct)

Tuesday, Nov 5

• Australia MPC: Consensus has cash rate target unchanged at 2.50%. Financial markets have all but completely ruled-out a chance of a rate cut  in November (~3% chance), with only a one-in-three chance of another 25bp reduction this cycle. We continue to lean towards another  reduction by March 2014.
• Euro Area ECB speakers: Draghi, Asmussen
• US Fed Williams (FOMC non-voter) speaks
• US ISM Non-manufacturing (Oct): consensus 54.0, previous 54.4
• Japan BoJ governor Kuroda speaks in Osaka
• Japan BoJ MPC minutes
• Chile MPC minutes (Oct)
• UK PMI Composite (Oct): previous 60.5
• Switzerland CPI (Oct): consensus -0.1%yoy, previous -0.1%yoy
• Taiwan CPI (Oct): consensus +1.1%yoy, previous +0.8%yoy
• Chile Economic Activity Index (Sep): consensus +4.2%yoy, previous +4.1%yoy
• Also interesting: Canada Trade Balance (Sep), Venezuela INPC Headline Inflation (Oct), Philippines CPI (Oct), Colombia CPI (Oct)

Wednesday, Nov 6

• Poland MPC: Consensus has policy rate unchanged at 2.50%
• US Fed Pianalto (FOMC non-voter) speaks
• UK BoE Don Kohn speaks
• US Non-Farm Productivity and Unit Labour Costs (Q3 prelim.)
• Euro Area PMIs Services (Oct final): Consensus 50.9, previous 50.9 (Flash)
• Euro Area PMI Composite (Oct final): Consensus 51.5, previous 51.5 (Flash)
• Euro Area Retail Sales (Sep): consensus +0.6%yoy, previous -0.3%yoy
• Germany Factory Orders (Sep): consensus +5.6%yoy, previous +3.1%yoy
• UK IP (Sep): Consensus +1.8%yoy, previous -1.5%yoy
• Czech Republic Trade Balance (Sep): consensus EUR+33.3bn, previous EUR+20.6bn
• Indonesia GDP (Q3): consensus +5.7%yoy, previous +5.8%yoy
• Also interesting: Russia CPI (Oct), Czech Republic IP (Sep)

Thursday, Nov 7

• Euro Area MPC: Consensus has main policy tools – interest rate and deposit facility rate – unchanged at 0.50% and 0.00% respectively. The ECB is expected to express more explicitly its concern about the recent strength of the Euro
• UK MPC: Consensus has main policy tools – policy rate and asset purchases – unchanged at 0.50% and GBP375bn respectively. Consistent with its forward guidance framework, the MPC will almost certainly leave policy unchanged at its November meeting. The messages of the subsequent Inflation Report are somewhat less clear. An improved outlook for growth in Q3 and Q4 suggests the BoE will revise lower its unemployment rate forecast
• Malaysia MPC: Consensus has policy rate unchanged at 3.00%yoy
• Peru MPC: Consensus has policy rate unchanged at 4.25%yoy
• US Fed Stein (FOMC voter) speaks
• US GDP (Q3 adv.): Consensus +2.0%, previous +2.5%
• US Initial Jobless Claims: consensus 335,000, previous 340,000
• Germany IP (Sep): consensus +0.8%yoy, previous +0.3%yoy
• Brazil IPCA Inflation (Oct): Consensus +5.87%yoy, previous +5.86%yoy
• Chile Trade Balance (Oct): consensus $-132mn, previous $-220mn
• Taiwan Trade Balance (Oct): consensus $+3.2bn yoy, previous $+2.3bn yoy
• Mexico INPC Core Inflation (Oct): Previous +2.52%yoy
• Also interesting: US Consumer Credit (Sep), UK Halifax House Prices (Oct), Switzerland FX Reserves (Oct)

Friday, Nov 8

• Russia MPC: Consensus have weekly auction rate unchanged at 5.50%
• US Fed speakers: Bernanke (FOMC voter), Lockhart (FOMC non-voter), Williams (FOMC non-voter), Fisher (FOMC non-voter)
• US Ex-candidate for Fed governor Lawrence Summers speaks at IMF
• US Non-farm Payrolls (Oct): Consensus 125K, previous 148K
• US Unemployment Rate (Oct): Consensus 7.3%, previous 7.2%
• US Personal Consumption (Sep): Consensus +0.2%, previous +0.3%
• US Personal Income (Sep): Consensus +0.3%, previous +0.4%
• US U. of Michigan Consumer Sentiment (Nov, provisional): Consensus 74.5, previous 73.2
• Euro Area ECB Asmussen speaks
• Mexico MPC minutes (Oct)
• Colombia MPC minutes (Oct)
• China Trade Balance (Oct): consensus $+23.5bn yoy, previous $+15.2bn yoy
• UK Trade Balance (Sep): consensus GBP-2.70bn, previous GBP-3.32bn
• Malaysia Trade Balance (Sep): consensus MYR+6.00bn, previous MYR+7.11bn
• Also interesting: France IP (Sep), UK Construction (Sep), Canada Housing Starts (Oct), Sweden IP (Sep), Chile CPI (Oct)

Saturday, Nov 9

• China IP (Oct): consensus +10.1%yoy, previous +10.2%yoy
• China CPI (Oct): consensus +3.3%yoy, previous +3.1%yoy
• China PPI (Oct): consensus -1.4%yoy, previous -1.3%yoy
• Retail Sales (Oct): consensus +13.4%yoy, previous +13.3%yoy

SocGen’s visual summary of the above:

And the key issues as summarized again by SocGen:

ECB NEEDS TO DO MUCH MORE THAN CUT RATES

Expectations of soon to come ECB action and a stronger US ISM manufacturing release (56.4 in
October) pushed the EUR/USD back below 1.35 on Friday, triggering a welcome sign of relief in the euro area. Nonetheless, the euro remains uncomfortably strong and inflation uncomfortably low. It is this combination that we now expect will push the ECB to a December rate cut. Alone, however, we expect a 25bp rate cut to have only a very modest impact on the EUR/USD; nor will it do much to fix the financial fragmentation that plagues the periphery.

This was a point that we also made when the ECB last cut rates in back in May. Fed taper expectations may help push the EUR/USD lower, but with a nasty twist as US bond yields then head north. Either way, the ECB will have to do more. Banned from QE, we see a fixed rate LTRO as the best tool at the ECB’s disposal. This would have the ability to cement a commitment to low interest rates for an extended period of time, helping on both the currency and bond market front. Ultimately, however, to get the euro area’s credit channels working again we believe it will be up to the government rather than the ECB. Our base case remains that repair of financial fragmentation will come only slowly.

BETTER US DATA BETTER HOPE FOR EUROPE

We expect to see overall healthy readings across a busy week of US data releases. October non-farm payrolls due on Friday will be the most closely watched report of the week and we expect to see a gain of +175K. Following in the wake of the strong manufacturing ISM released last Friday, we expect to see a gain to 56 on the service sector. Q3 GDP also out this week is expected to clock in at 2.3% qoq annualised. Stronger US data will see Fed taper expectations rebuild; with a still unresolved situation on the fiscal front we maintain our base case scenario for taper to start at the March FOMC.

CHINA STILL BUMPY LANDING

Monthly activity data for October are expected to show softer activity growth against a backdrop on on-going deleveraging pressures. It is against  this backdrop that the Third Communist Party Plenary meeting is due to take place on 9-12 November. We do not expect detailed reform measures to emerge, but look rather for a broader policy framework focusing on financial market and corporate sector liberalisation. Changes to the Hukou system (a system of mandatory household registration that leads unequal social benefits between urban and rural population in China), on the other hand, will most likely have to wait. The key test for reform resolve will come in the three to six months that follow the meeting; this is when we will see just how many tangible measures are taken.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/21HwF958MwQ/story01.htm Tyler Durden

Google Executive Chairman Eric Schmidt is the latest to admit he is shocked, shocked, to learn there was spying going on in here. In an interview with the WSJ  “bristled” at the recent report that the U.S. government has spied on the company’s data centers, describing such an act as “outrageous” and potentially illegal if proven. Then again, since the NSA’s domestic espionage is effectively unchecked expect by a secret FISA court which approves virtually every spying request, the legality of the NSA’s activity has little relevance but merely confirms what Snowden wrote in his “manifesto”, in which he correctely noted that he has opened a long overdue debate over the meaning of civil liberties and lack thereof in the age of the authoritarian superspying big brother state.

From the WSJ:

“It’s really outrageous that the National Security Agency was looking between the Google data centers, if that’s true. The steps that the organization was willing to do without good judgment to pursue its mission and potentially violate people’s privacy, it’s not OK,” Mr. Schmidt told The Wall Street Journal in an interview on Sunday. “The Snowden revelations have assisted us in understanding that it’s perfectly possible that there are more revelations to come.”

 

“The National Security Agency allegedly collected the phone records of every phone call of 320 million people in order to identify roughly 300 people who might be a risk. That’s just bad public policy…and perhaps illegal,” he said.

The NSA, as usual, played so dumb one would think instead of math and code breaking geniuses it employed economists:

When contacted Monday, the NSA referred to its statement last week that said recent press articles about the NSA’s collection had misstated facts and mischaracterized the NSA’s activities.

 

“NSA conducts all of its activities in accordance with applicable laws, regulations, and policies—and assertions to the contrary do a grave disservice to the nation, its allies and partners, and the men and women who make up the National Security Agency,” it said in a statement last week.

As for Google, while it may be disgusted, it was in no hurry to change operating practices:

Mr. Schmidt said in the interview that the right balance of security and privacy starts with finding the appropriate level of oversight.

 

“There clearly are cases where evil people exist, but you don’t have to violate the privacy of every single citizen of America to find them,” he said.

Sadly, finding the “evil people” is the least of the NSA’s motives in a time when even the vaguest thoughts against the “greater good” have to be preemptively crushed in their embryonic stage with Kafkaesque laser guided pre-crime precision.

Full Schmidt interview below.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/rVRIQnB9yfY/story01.htm Tyler Durden

Google Executive Chairman Eric Schmidt is the latest to admit he is shocked, shocked, to learn there was spying going on in here. In an interview with the WSJ  “bristled” at the recent report that the U.S. government has spied on the company’s data centers, describing such an act as “outrageous” and potentially illegal if proven. Then again, since the NSA’s domestic espionage is effectively unchecked expect by a secret FISA court which approves virtually every spying request, the legality of the NSA’s activity has little relevance but merely confirms what Snowden wrote in his “manifesto”, in which he correctely noted that he has opened a long overdue debate over the meaning of civil liberties and lack thereof in the age of the authoritarian superspying big brother state.

From the WSJ:

“It’s really outrageous that the National Security Agency was looking between the Google data centers, if that’s true. The steps that the organization was willing to do without good judgment to pursue its mission and potentially violate people’s privacy, it’s not OK,” Mr. Schmidt told The Wall Street Journal in an interview on Sunday. “The Snowden revelations have assisted us in understanding that it’s perfectly possible that there are more revelations to come.”

 

“The National Security Agency allegedly collected the phone records of every phone call of 320 million people in order to identify roughly 300 people who might be a risk. That’s just bad public policy…and perhaps illegal,” he said.

The NSA, as usual, played so dumb one would think instead of math and code breaking geniuses it employed economists:

When contacted Monday, the NSA referred to its statement last week that said recent press articles about the NSA’s collection had misstated facts and mischaracterized the NSA’s activities.

 

“NSA conducts all of its activities in accordance with applicable laws, regulations, and policies—and assertions to the contrary do a grave disservice to the nation, its allies and partners, and the men and women who make up the National Security Agency,” it said in a statement last week.

As for Google, while it may be disgusted, it was in no hurry to change operating practices:

Mr. Schmidt said in the interview that the right balance of security and privacy starts with finding the appropriate level of oversight.

 

“There clearly are cases where evil people exist, but you don’t have to violate the privacy of every single citizen of America to find them,” he said.

Sadly, finding the “evil people” is the least of the NSA’s motives in a time when even the vaguest thoughts against the “greater good” have to be preemptively crushed in their embryonic stage with Kafkaesque laser guided pre-crime precision.

Full Schmidt interview below.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/rVRIQnB9yfY/story01.htm Tyler Durden

• Investors are stampeding into initial public offerings at the fastest clip since the financial crisis (WSJ)
• Kerry hails disgruntled Saudi Arabia as important U.S. ally (Reuters)
• SAC Capital prepares for a second life (FT)
• BlackBerry’s Fate Goes Down to the Wire (WSJ)
• Dutch Gamble on U.S. Housing Debt After Patience Wins (BBG)
• Tensions with allies rise, but U.S. sees improved China ties (Reuters)
• China berates foreign media for Tiananmen attack doubts (Reuters)
• China manufacturers squeezed as costs rise (FT)
• European Borders Tested as Money Is Moved to Shield Wealth (NYT)
• Zurich Probe Finds No ‘Undue Pressure’ Put on Late CFO (BBG)
• Johnnie Walker One Shot at a Time Boosts Diageo in Africa (BBG)
• Obamacare Birth Control Mandate Ruled Unconstitutional (BBG)
• NQ Mobile Sales Search Leads to Suburban Beijing Office (BBG)

 

Overnight Media Digest

WSJ

* BlackBerry’s future may become clearer as soon as Monday when a tentative agreement from Fairfax Financial to take the company private for $4.7 billion is scheduled to be firmed up. Other bids are possible.

* Investors are stampeding into initial public offerings at the fastest clip since the financial crisis, fueling a frenzy in the shares of newly listed companies that echoes the technology-stock craze of the late 1990s.

* SAC and federal prosecutors in Manhattan are expected to announce a record insider-trading settlement Monday. Under the deal, the firm run by Steven Cohen is expected to agree to pay about $1.2 billion in criminal penalties, plead guilty to an indictment obtained in July by prosecutors alleging the firm encouraged rampant insider trading, and stop managing outside money.

* The Obama administration ruled that drugmakers can help pay prescription-drug costs for patients on health-care exchanges. Pharmacy-benefit managers object, preferring generic drugs.

* Years of low interest rates are taking their toll on universal life insurance policies, affecting the policy holders as well as the charities and institutions that would benefit from the policies.

* Federal approval to use electronic devices throughout flights has revived a related debate over whether airline passengers should also be able to make voice calls while airborne.

* Suntech Power agreed to sell its core assets in China for $492 million to a smaller rival, attempting to pay back creditors after defaulting on billions of dollars in debt.

* Cooper Tire’s lawsuit against Apollo Tyre of India, to force it to close on a previously agreed-upon acquisition, heads to court on Tuesday.

* The Federal Trade Commission cleared the way for Office Depot Inc and OfficeMax Inc to complete their $1.2 billion merger after concluding the corporate marriage wouldn’t harm competition.

* U.S car shoppers brushed off Washington’s fiscal battles last month and, emboldened by steady gas prices, bought more trucks and sport-utility vehicles and boosted the Detroit Three auto makers over their rivals.

 

FT

Steve Cohen’s $15-billion hedge fund SAC Capital Advisors, currently fighting criminal insider trading charges, will plead guilty to securities fraud and pay over $1 billion in fines, a person familiar with the matter said. The announcement on the plea and fine is expected as soon as Monday, the source said.

Twitter , which is expected to list with a valuation of as much as $13.9 billion this week, is set to make a “substantial investment” after the initial public offering, to expand research and development including buying other companies for their products, technologies and staff.

The number of new jobs in London’s financial district dropped slightly in October despite renewed optimism in the financial services sector, according to specialist recruiter Astbury Marsden.

Europe’s largest banks have increased their risk exposure to sovereign debt by more than a quarter in 2011 and 2012, while reducing corporate lending as they prepare for stricter global capital rules, according to findings by Fitch Ratings.

Private equity group Blackstone will offer investors a novel security this week, backed by cash flow from more than 3,000 foreclosed homes across the United States that it bought and converted into rental properties.

 

NYT

* Federal subsidies will pay the entire monthly cost of some plans being offered in the online marketplaces, a surprising figure that has not gotten much attention, in part because the zero-premium plans come with serious trade-offs.

* A plea deal for SAC Capital Advisors would resolve a criminal case involving insider trading charges, but the firm’s owner, Steven Cohen, would still face a civil lawsuit.

* Hard as it may be to believe, the price per square foot for luxury apartments in New York City is considerably less than it is for luxury elsewhere in the world.

* Though three-quarters of Twitter users are outside the United States, only a modest portion of its ad revenue is generated there. But it’s growing fast.

* Backed by the billionaire Koch brothers, Americans for Prosperity has campaigned against taxes and spending in Coralville, Iowa, but some voters are skeptical of its motives.

* With the pace of delayed television viewing increasing, networks want advertisers to pay for seven days of commercial viewing to cover computer screens and tablets as well as TV sets.

* Technology giant Samsung, known for playing its cards close to the vest, is holding only its second meeting of management with analysts.

* Zola Books is trying to persuade book buyers to flock to its website, a hybrid that is designed to be a bookseller, curator and social-networking site all in one.

* A sweeping distribution deal between television giants, the Walt Disney Co and Dish Network, expired more than a month ago, and there is still no new deal in sight.

 

Canada

THE GLOBE AND MAIL

* Montrealers turned to a veteran federal politician with a populist touch to lead Montreal into a critical era of rebuilding, sending Denis Coderre to city hall as mayor but ensuring he faces strong opposition on city council.

* Quebec
voters are hoping to turn the page on an era of scandal-ridden leadership as they cast their ballots in municipal elections across the province on Sunday.

Reports in the business section:

* It’s decision week for BlackBerry Ltd, the battered former champion of Canada’s technology industry. Monday is the day by which Fairfax Financial Holdings Ltd is expected to finalize a deal to buy the smartphone maker for $4.7 billion.

* Canada’s jobless rate has ebbed to a five-year low, reflecting solid job creation in some sectors and – in the case of September – fewer young people looking for work.

NATIONAL POST

* Toronto Mayor Rob Ford said on Sunday that he has to ‘slow down on his drinking.’ He promised to ‘make changes in my life,’ but did not admit to drug use.

* Canadian Prime Minister Stephen Harper has been given his marching orders from a Conservative party not frightened to embrace social conservatism and a hard-core shift to the right.

FINANCIAL POST

* Despite all the challenges Canada’s oil patch has faced, it’s been a pretty good year for Canadian energy stocks – and some ‘are very cheap and very strong on earnings.’

 

China

CHINA SECURITIES JOURNAL

– In the first nine months of the year, 10 A-share listed Chinese companies invested a total of $1.2 billion in overseas mining projects, accounting for 36.8 percent of their aggregate investments, according to information gathered at a mining conference.

CHINA DAILY

– Police have detained 17 people in four Chinese provinces on suspicion of making and selling $3.28 million worth of counterfeit drugs and vaccines, the Ministry of Public Security said on Saturday.

– Western media, in particular those from the U.S., have employed double standards in their reporting of the Tiananmen crash on Oct. 28, said an editorial. There is no confrontation between the Chinese government and the Uighurs in the Xinjiang Uighur autonomous region, it said.

PEOPLE’S DAILY

– China’s development strategy should not be fixated only on GDP growth, said an editorial in the paper that acts as the government’s mouthpiece. Attention also needs to be paid to the by-products of growth, such as pollution and development efficiency, it said.

SHANGHAI DAILY

– Shanghai will see a 73 percent on-month increase in land supply in November, according to Soufun.com, operator of China’s largest real estate website. A site area of 818,000 square meters of land will be released for auction this month, it said.

 

 

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

AK Steel (AKS) upgraded to Buy from Sell at Goldman
Abaxis (ABAX) upgraded to Neutral from Underperform at BofA/Merrill
Abercrombie & Fitch (ANF) upgraded to Buy from Neutral at SunTrust
Alcatel-Lucent (ALU) upgraded to Buy from Neutral at UBS
Alcatel-Lucent (ALU) upgraded to Neutral from Underperform at Exane BNP Paribas
BP (BP) upgraded to Equal Weight from Underweight at Morgan Stanley
BT Group (BT) upgraded to Overweight from Neutral at HSBC
Boston Beer (SAM) upgraded to Outperform from Perform at Williams Capital
Dril-Quip (DRQ) upgraded to Buy from Accumulate at Global Hunter
GrafTech (GTI) upgraded to Buy from Hold at Jefferies
Kohl’s (KSS) upgraded to Buy from Neutral at UBS
Occidental Petroleum (OXY) upgraded to Overweight from Equal Weight at Barclays
Omnicom (OMC) upgraded to Outperform from Market Perform at BMO Capital
Ruth’s Hospitality (RUTH) upgraded to Market Perform at Raymond James
STAG Industrial (STAG) upgraded to Overweight from Equal Weight at Evercore
Salesforce.com (CRM) upgraded to Overweight from Neutral at Atlantic Equities
Steel Dynamics (STLD) upgraded to Buy from Neutral at Goldman
Time Warner Cable (TWC) upgraded to Buy from Hold at Deutsche Bank
U.S. Steel (X) upgraded to Buy from Sell at Goldman

Downgrades

AXIS Capital (AXS) downgraded to Market Perform from Outperform at BMO Capital
Accuride (ACW) downgraded to Neutral from Buy at B. Riley
Aflac (AFL) downgraded to Neutral from Buy at Citigroup
AstraZeneca (AZN) downgraded to Neutral from Buy at UBS
Bridgepoint Education (BPI) downgraded to Sell from Hold at Deutsche Bank
Calpine (CPN) downgraded to Hold from Buy at Jefferies
Calumet Specialty Products (CLMT) downgraded to Sector Perform at RBC Capital
Computer Programs (CPSI) downgraded to Outperform from Strong Buy at Raymond James
Digital Realty (DLR) downgraded to Neutral from Outperform at RW Baird
Eni SpA (E) downgraded to Equal Weight from Overweight at Morgan Stanley
Gap (GPS) downgraded to Neutral from Buy at Goldman
Marathon Petroleum (MPC) downgraded to In-Line from Outperform at Imperial Capital
NetApp (NTAP) downgraded to Neutral from Overweight at Piper Jaffray
Piedmont Office Realty (PDM) downgraded to Underperform at Wells Fargo
Range Resources (RRC) downgraded to Underweight from Equal Weight at Barclays
Reliance Steel (RS) downgraded to Neutral from Buy at Goldman
Teva (TEVA) downgraded to Underweight from Neutral at JPMorgan

Initiations

Antero Resources (AR) initiated with an Overweight at Barclays
Cell Therapeutics (CTIC) initiated with a Buy at H.C. Wainwright
Evoke Pharma (EVOK) initiated with a Buy at Cantor
Gaming and Leisure Properties (GLPI) initiated with a Buy at Deutsche Bank
LDR Holding (LDRH) initiated with an Overweight at Piper Jaffray
MacroGenics (MGNX) initiated with a Neutral at BofA/Merrill
MacroGenics (MGNX) initiated with an Outperform at Leerink
QTS Realty Trust (QTS) initiated with a Buy at Goldman
QTS Realty Trust (QTS) initiated with a Buy at Jefferies
SFX Entertainment (SFXE) initiated with a Buy at UBS
Western Refining Logistics (WNRL) initiated with a Neutral at Goldman
Western Refining Logistics (WNRL) initiated with an Outperform at Credit Suisse
Western Refining Logistics (WNRL) initiated with an Outperform at Wells Fargo

HOT STOCKS

HSBC (HBC) said being investigated for foreign exchange trading
TRI Pointe Homes (TPH) to combine with WRECO (WY) in transaction valued at $2.7B
Caterpillar (CAT) disclosed probe into railroad unit from U.S. District Court for the Central District of California
Morgans Hotel (MHGC) confirmed $8.00 per share offer from Yucaipa Cos.
Honda (HMC) recalled 344,000 Odyssey vehicles for braking issue
Samsung (SSNLF) extended patent license agreement with Nokia (NOK) for five years
Hyatt Hotels (H) in deal for Hyatt-branded hotel in Iraq

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Spectra Energy (SE), Realogy (RLGY)

Companies that missed consensus earnings expectations include:
Synta Pharmaceuticals (SNTA), Zogenix (ZGNX)

NEWSPAPERS/WEBSITES

• Investors are stampeding into IPOs at the fastest clip since the financial crisis, fueling a frenzy in the shares of newly listed companies that echoes the technology-stock craze of the late 1990s, the Wall Street Journal reports
• BlackBerry’s (BBRY) future may become clearer as soon as today when a tentative agreement from Fairfax Financial Holdings (FRFHF) to take BlackBerry private for $4.7B is scheduled to be firmed up. Bids from any others are due then too, and it is possible the deadline could be extended, the Wall Street Journal reports
• Anadarko Petroleum (APC) is considering the sale of its holdings in oil and gas projects in China, in a deal that could be valued at about $1B, sources say, Reuters reports
• Chinese police investigating allegations of widespread corrupt practices at GlaxoSmithKline (GSK) are likely to charge some of its Chinese executives b
  ut not the British drugmaker itself, sources say, Reuters reports
• Mitsubishi Corp. (MSBHY), Asia’s largest trading company by market value, is expanding into property development in Southeast Asia as the slowdown in China shrinks profits from its commodity businesses, Bloomberg reports

BARRON’S

Twitter (TWTR) looks promising at $20 IPO price, not at $30
Discover (DFS) could gain over 20% next year
Boeing (BA) could rise 30% by 2015
Covanta (CVA) could rise 40% or more
Coke (KO) a good play for low-volatility, income seeking investors
T-Mobile (TMUS) looks to ‘unseat’ Verizon (VZ), AT&T (T)

SYNDICATE

Seadrill (SDRL) files to sell 10M common units for holders
Spherix (SPEX) raises $2M in a private placement
Tetraphase (TTPH) files to sell 3.3M shares of common stock
Xinyuan Real Estate (XIN) files to sell 18.63M American Depositary Shares
Zogenix (ZGNX) files to sell $60M in common stock

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/sBzgwbhsuVU/story01.htm Tyler Durden