Uploaded by FinancialNewsOnline on Dec 2, 2011
This is what's in the news for Friday, December 2nd. The Wall Street Journal reports General Motors (NYSE:GM) said it will buy back Chevrolet Volts from owners who fear the car is a fire risk amid a U.S. safety investigation of its lithium-ion battery. Reuters reports U.S. auto sales jumped 14% in November, led by Chrysler Group LLC (PINK:FIATY) and Volkswagen AG (PINK:VLKAY). Bloomberg reports Colony Capital LLC, owner of the Miramax film library, is in talks to acquire a stake in Summit Entertainment LLC, creating competition for Lions Gate Entertainment (NYSE:LGF) which is in talks to acquire Summit. And finally, Bloomberg also reports New York Times Co. (NYSE:NYT) may make its first acquisition in over three years, and is interested in deals for technology or information companies.
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Honda (NYSE:HMC) Recalls Over 300,000 Vehicles Over Air Bag Problems (potential upside31.5%)
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Honda (NYSE:HMC) Recalls Over 300,000 Vehicles Over Air Bag Problems (potential upside31.5%)
Uploaded by FinancialNewsOnline on Dec 2, 2011
Japanese car maker Honda Motor (NYSE:HMC) announced a recall of 304,000 vehicles globally for air bags that may inflate with too much pressure in a crash, send metal and plastic pieces flying and cause injuries or deaths.
This recall is an expansion of recalls for the same problem back in 2008, and again carried out in 2009, as well as last year. The recall now covers about 2 million vehicles worldwide according to the car maker.
The Accord, Civic, Odyssey, Pilot, CR-V, and other Honda models manufactured in 2001 and 2002 are affected by the recall. The automaker said there have been 20 accidents so far related to the air bag issue, including two deaths in the U.S. in 2009.
Honda Motor (NYSE:HMC) has potential upside of 31.5% based on a current price of $31.59 and an average consensus analyst price target of $41.54.
This recall is an expansion of recalls for the same problem back in 2008, and again carried out in 2009, as well as last year. The recall now covers about 2 million vehicles worldwide according to the car maker.
The Accord, Civic, Odyssey, Pilot, CR-V, and other Honda models manufactured in 2001 and 2002 are affected by the recall. The automaker said there have been 20 accidents so far related to the air bag issue, including two deaths in the U.S. in 2009.
Honda Motor (NYSE:HMC) has potential upside of 31.5% based on a current price of $31.59 and an average consensus analyst price target of $41.54.
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Zynga Plans to Raise $925 million in IPO Uploaded by FinancialNewsOnline on Dec 2, 2011
Facebook game maker Zynga is moving forward with its initial public offering, saying it could raise up to $925 million. The company plans to sell 100 million shares, or 14.3 percent of the company, at $8.50 to $10 per share according to a regulatory filing.
This would value the five-year-old company at around $7.7 to $9.04 billion, based on 904 million fully diluted shares, which would catapult it to the top of the U.S. game industry.
The company had previously filed in July to raise up to $1 billion. The lowered IPO might be because of internet companies like Groupon (NASDQ:GRPN) and Pandora (NYSE:P) sinking following their debuts.
This would value the five-year-old company at around $7.7 to $9.04 billion, based on 904 million fully diluted shares, which would catapult it to the top of the U.S. game industry.
The company had previously filed in July to raise up to $1 billion. The lowered IPO might be because of internet companies like Groupon (NASDQ:GRPN) and Pandora (NYSE:P) sinking following their debuts.
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Morgans Hotel (NASDAQ:MHGC) Wins Long-Term Management Agreement for London's Sea Containers (potential upside of 59.7%)Uploaded by FinancialNewsOnline on Dec 2, 2011
Morgans Hotel Group (NASDAQ:MHGC) announced that it has entered into a hotel management agreement for an approximately 360-room Mondrian-branded hotel to be located at Sea Containers on the South Bank of the River Thames in London.
This hotel is expected to be the sixth Mondrian hotel in the expansion of the company's iconic brand and the first Mondrian hotel in Europe. Upon completion and opening of the hotel, Morgans will operate the hotel pursuant to a 25-year management agreement, with two 10-year extension options. The hotel is scheduled to open in early 2014.
Morgans Hotel (NASDAQ:MHGC) has potential upside of 59.7% based on a current price of $5.95 and an average consensus analyst price target of $9.5.
This hotel is expected to be the sixth Mondrian hotel in the expansion of the company's iconic brand and the first Mondrian hotel in Europe. Upon completion and opening of the hotel, Morgans will operate the hotel pursuant to a 25-year management agreement, with two 10-year extension options. The hotel is scheduled to open in early 2014.
Morgans Hotel (NASDAQ:MHGC) has potential upside of 59.7% based on a current price of $5.95 and an average consensus analyst price target of $9.5.
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Nvidia (NASDAQ:NVDA) Looks Toward Shipment of 25 Million Units of Tegra 3 in 2012 (potential upside 10.5%)Uploaded by FinancialNewsOnline on Dec 2, 2011
Nvidia (NASDAQ:NVDA) is looking to challenge the 25 million-unit points for shipments of its Tegra 3 processors to be used in smartphones, tablets, and autos in 2012.
Presently, there are 11 smartphones that are using Tegra 2 including Motorola's Artix, LG's Optimus 2X and Samsung's Galaxy R. Meanwhile, there are 23 tablet PCs with Tegra 2 including Samsung's Galaxy Tab 10.1, Asustek's Eee Pad Transformer and Acer's S3.
Nvidia (NASDAQ:NVDA) has potential upside of 10.5% based on a current price of $15.82 and an average consensus analyst price target of $17.48.
Presently, there are 11 smartphones that are using Tegra 2 including Motorola's Artix, LG's Optimus 2X and Samsung's Galaxy R. Meanwhile, there are 23 tablet PCs with Tegra 2 including Samsung's Galaxy Tab 10.1, Asustek's Eee Pad Transformer and Acer's S3.
Nvidia (NASDAQ:NVDA) has potential upside of 10.5% based on a current price of $15.82 and an average consensus analyst price target of $17.48.
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Royal Bank of Scotland (NYSE:RBS) Selling Tenanted Pub Business to Heineken Unit
Uploaded by FinancialNewsOnline on Dec 2, 2011
The Royal Bank of Scotland Group (NYSE:RBS) announces the sale of its tenanted pub business to Scottish & Newcastle Pub Company, a subsidiary of Heineken N.V.
As a result of the sale, RBS received cash proceeds of approximately GBP422M including approximately GBP10 million of accrued earnings owed to RBS pursuant to the management agreement, which has been terminated with immediate effect.
Royal Bank of Scotland is currently below its 50-day moving average (MA) of $7.21 and below its 200-day MA of $10.79.
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Research in Motion (NASDAQ:RIMM) to Take $485 Million Charge for PlayBook (potential upside 50.9%)
As a result of the sale, RBS received cash proceeds of approximately GBP422M including approximately GBP10 million of accrued earnings owed to RBS pursuant to the management agreement, which has been terminated with immediate effect.
Royal Bank of Scotland is currently below its 50-day moving average (MA) of $7.21 and below its 200-day MA of $10.79.
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Research in Motion (NASDAQ:RIMM) to Take $485 Million Charge for PlayBook (potential upside 50.9%)
Uploaded by FinancialNewsOnline on Dec 2, 2011
Mobile manufacturer, Research In Motion (NASDAQ:RIMM) stated it would record a pre-tax provision in Q3 of $485 million, $360 million after tax, related to its inventory valuation of BlackBerry PlayBook tablets. The charge is expected to be largely non-cash. As previously disclosed, RIM has a high level of BlackBerry PlayBook inventory.
The company now considers that an increase in promotional activity is required to drive sell-through to end customers.
Therefore, RIM will record a provision that reflects the recent market environment and allow it to expand upon the aggressive level of promotional activity recently employed by the company in order to drive PlayBook adoption around the world. RIM believes this strategy will accelerate adoption of its QNX-based platform by consumers and enterprises.
During the third quarter RIM sold approximately 150,000 BlackBerry PlayBook tablets and sell-through to end customers, based on RIM's internal data, was higher than this amount.
Research In Motion (NASDAQ:RIMM) has potential upside of 50.9% based on a current price of $18.58 and an average consensus analyst price target of $28.03.
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US Stocks Open Higher As Jobs Data
Meanwhile, European Central Bank President Mario Draghi signaled the bank could ramp up its role battling the debt crisis. Bloomberg News reported that European officials are considering a proposal to channel as much as $270 billion in loans from the ECB through the International Monetary Fund to fight the debt crisis.
The reduction in the jobless rate, which stood at 9.0% in October, stemmed in large part from a decline in the size of the labor force. Some 315,000 people stopped looking for jobs last month, according to Market Watch.
However, the decline in the labor force is contradicted by other evidence showing that companies continue to add workers at a modest pace.The economy has gained an average of 131,000 jobs over the past year, or an even higher 143,000 in the past three months. The employment figures are drawn from a survey of several hundred thousand business establishments
The company now considers that an increase in promotional activity is required to drive sell-through to end customers.
Therefore, RIM will record a provision that reflects the recent market environment and allow it to expand upon the aggressive level of promotional activity recently employed by the company in order to drive PlayBook adoption around the world. RIM believes this strategy will accelerate adoption of its QNX-based platform by consumers and enterprises.
During the third quarter RIM sold approximately 150,000 BlackBerry PlayBook tablets and sell-through to end customers, based on RIM's internal data, was higher than this amount.
Research In Motion (NASDAQ:RIMM) has potential upside of 50.9% based on a current price of $18.58 and an average consensus analyst price target of $28.03.
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US Stocks Open Higher As Jobs Data
Uploaded by FinancialNewsOnline on Dec 2, 2011
U.S. stocks opened higher after the U.S. unemployment rate unexpectedly dropped, adding to encouraging headlines suggesting European leaders and central bankers were more willing to tackle the region's debt woes, according to the Wall Street Journal.
The Dow Jones Industrial Average rose 77 points, or 0.6%, to 12100. The Standard & Poor's 500 stock-index rose nine points, or 0.7%, to 1254, while the Nasdaq Composite gained 19 points, or 0.7%, to 2645.
Leading the gainers were financials stocks, with J.P. Morgan Chase and Bank of America leading the advancers with gains of 2.6% and 1.8% respectively.
The gains came after German Chancellor Angela Merkel called a proposal to create national funds to administer excessive debt in euro-zone nations an "interesting idea", her spokesman said Friday. Ms. Merkel and French President Nicolas Sarkozy are also finalizing a plan to strengthen euro-zone stability rules, including implementing European Union treaty changes.
The Dow Jones Industrial Average rose 77 points, or 0.6%, to 12100. The Standard & Poor's 500 stock-index rose nine points, or 0.7%, to 1254, while the Nasdaq Composite gained 19 points, or 0.7%, to 2645.
Leading the gainers were financials stocks, with J.P. Morgan Chase and Bank of America leading the advancers with gains of 2.6% and 1.8% respectively.
The gains came after German Chancellor Angela Merkel called a proposal to create national funds to administer excessive debt in euro-zone nations an "interesting idea", her spokesman said Friday. Ms. Merkel and French President Nicolas Sarkozy are also finalizing a plan to strengthen euro-zone stability rules, including implementing European Union treaty changes.
Meanwhile, European Central Bank President Mario Draghi signaled the bank could ramp up its role battling the debt crisis. Bloomberg News reported that European officials are considering a proposal to channel as much as $270 billion in loans from the ECB through the International Monetary Fund to fight the debt crisis.
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U.S. Unemployment Dropped 0.4% According to the Labor Department Uploaded by FinancialNewsOnline on Dec 2, 2011
The U.S. economy created 120,000 jobs in November and the unemployment rate fell to 8.6%, its lowest level in more than two and a half years, the Labor Department said Friday.The reduction in the jobless rate, which stood at 9.0% in October, stemmed in large part from a decline in the size of the labor force. Some 315,000 people stopped looking for jobs last month, according to Market Watch.
However, the decline in the labor force is contradicted by other evidence showing that companies continue to add workers at a modest pace.The economy has gained an average of 131,000 jobs over the past year, or an even higher 143,000 in the past three months. The employment figures are drawn from a survey of several hundred thousand business establishments
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Verizon Wireless to Buy Advanced Wireless Spectrum from SpectrumCo for $3.6 BillionUploaded by FinancialNewsOnline on Dec 2, 2011
SpectrumCo, a joint venture between Comcast Corporation (NASDAQ:CMCSA), Time Warner (NYSE:TWC), and Bright House Networks, announced it has entered into an agreement pursuant to which Verizon will acquire its 122 Advanced Wireless Services spectrum licenses covering 259 million POPs for $3.6 billion.
Comcast owns 63.6% of SpectrumCo and will receive an estimated $2.3 billion from the sale. Time Warner Cable owns 31.2% of SpectrumCo and will receive approximately $1.1 billion. Bright House Networks owns 5.3% of SpectrumCo and will receive approximately $189 million.
Verizon Communications (NYSE:VZ) has potential upside of 3.6% based on a current price of $37.85 and an average consensus analyst price target of $39.23.
Comcast owns 63.6% of SpectrumCo and will receive an estimated $2.3 billion from the sale. Time Warner Cable owns 31.2% of SpectrumCo and will receive approximately $1.1 billion. Bright House Networks owns 5.3% of SpectrumCo and will receive approximately $189 million.
Verizon Communications (NYSE:VZ) has potential upside of 3.6% based on a current price of $37.85 and an average consensus analyst price target of $39.23.
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AOL (NYSE:AOL) to Focus On Mobile Ad Sales for Growth (potential upside of 26.7%)Uploaded by FinancialNewsOnline on Dec 2, 2011
Bloomberg reported that advertising on mobile devices makes up a "tiny" percentage of AOL's (NYSE:AOL) total ad sales, according to CEO Tim Armstrong, but his goal is to increase ad revenue for the company's mobile segment to 10% or more of overall sales.
Armstrong, who took the helm in 2009 said, "We're very, very small right now in mobile. The opportunity is there, and we've got to get really organized around it."
Shares of the company have fallen 41% this year alone.
AOL (NYSE:AOL) has potential upside of 26.7% based on a current price of $14.03 and an average consensus analyst price target of $17.77.
Armstrong, who took the helm in 2009 said, "We're very, very small right now in mobile. The opportunity is there, and we've got to get really organized around it."
Shares of the company have fallen 41% this year alone.
AOL (NYSE:AOL) has potential upside of 26.7% based on a current price of $14.03 and an average consensus analyst price target of $17.77.
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Google Delivery Service Unlikely to Impact Amazon (NASDAQ:AMZN) (potential upside of 21.9%) Uploaded by FinancialNewsOnline on Dec 2, 2011
Piper Jaffray does not believe a Google (NASDAQ:GOOG) delivery service, as reported yesterday by the Wall Street Journal, will have an impact on Amazon (NASDAQ:AMZN) sales. They also believe a quick delivery service by Google would not address the most important elements for e-commerce buyers, namely convenience, price and selection.
The firm has an Overweight rating on Amazon shares with a $256 price target.
Amazon.com (NASDAQ:AMZN) has potential upside of 21.9% based on a current price of $197.13 and an average consensus analyst price target of $240.29.
The firm has an Overweight rating on Amazon shares with a $256 price target.
Amazon.com (NASDAQ:AMZN) has potential upside of 21.9% based on a current price of $197.13 and an average consensus analyst price target of $240.29.
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