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Opening Bell: 05.07.14

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Fat-Destroying Machine Doubted by Stock Traders (Bloomberg)
The way Shimon Eckhouse sees it, his company’s fat-busting technology gives him a direct line into what he calls one of the holy grails of beauty treatment. Everyone, he says, is worried about being overweight. So when Syneron Medical Ltd. (ELOS), the Israeli company Eckhouse co-founded in 2000, failed to rally in the stock market after the U.S. approved the ultrasound device on April 14, he was surprised. “I expected to see much more of a jump in the stock,” Eckhouse, Syneron’s chairman, said in a May 2 phone interview. There is “huge potential” in the business, he said...Now that the Food and Drug Administration has approved the device, Syneron will begin selling UltraShape machines to a limited group of doctors in the second quarter of 2014 to test its model of revenue sharing, Eckhouse said. The company plans to apply the model to Syneron’s other products, which include devices for skin whitening, wrinkle treatment, and hair-removal. The UltraShape machine painlessly destroys fat cells by heating them with ultrasound waves that penetrate 1.5 centimeters (0.6 inch) below the skin, according to a company presentation.

Regulators Step Up Probe Into Bank Hiring Overseas (WSJ)
The Securities and Exchange Commission in early March sent letters to a group of companies including Credit Suisse Group AG , Goldman Sachs, Morgan Stanley, Citigroup, and UBS AG seeking more information about their hiring in Asia, according to the people. It is examining whether the banks or their employees violated antibribery laws by hiring relatives of well-connected officials.

UBS, Barclays Contrast Shows How Slimmed-Down Investment Banking Bolsters Bottom Line (WSJ)
At Zurich-based UBS, which significantly curbed its trading operations after the financial crisis, first-quarter earnings beat analysts' expectations. The bank's shares gained 1.2% By contrast, Barclays, which is still to shrink its securities unit, missed forecasts amid a collapse in operating profit at its investment bank. London-based Barclays's shares fell 5.2%. Since the start of the year, investors have sent UBS stock up by about 9% while Barclays's has fallen by a similar amount. The contrast reflects different approaches at the two banks since the financial crisis. UBS, laid low by the crisis in 2008, bit the bullet of a major revamp. The bank has undergone years of restructuring that curbed its presence in investment banking, particularly in the costly and relatively high-risk debt-trading business, and refocused its efforts on wealth management and private banking.

As Lockup Expires, Twitter Holders Fly the Coop (WSJ)
The expiration of the six-month "lockup" imposed by the securities firms that sold the Twitter initial public offering freed holders of 83% of shares outstanding to sell for the first time. Tuesday's decline, Twitter's second-biggest one-day percentage drop, marked the worst performance for a technology stock on its lockup-expiration day since at least the start of 2013, according to data provider Dealogic.

Insight: Pimco's bad bets on emerging markets add to firm's troubles (Reuters)
In particular, it has made made some ill-timed bets in the Brazilian, Mexican and Russian debt markets. It made substantial investments in some companies that have gone belly-up, such as Brazilian oil company OGX Petróleo e Gás Participações SA, which was controlled by Eike Batista, who only two years ago was estimated to be the world's seventh-richest man but whose business empire has now largely crumbled.

World’s largest legal pot facility to open (NYP)
CEN Biotech — a nutrition company best known for an amino acid supplement — is working on opening the “largest and most advanced” legal marijuana production facility in the world. The Ontario site will be able to grow 1.3 million pounds of pot from 50,000 plants — an operation that could produce $5 billion in sales per year when it starts producing in a few weeks after it passes government inspections. No more hiding grow lamps in closets: This $20 million facility will churn out pot like other factories churn out aspirin. And it has plans to expand to the US.

JPMorgan closing accounts of foreign diplomats in U.S.: FT (Reuters)
JP Morgan is closing the accounts of current and former foreign government officials in an attempt to avoid the compliance costs associated with them, the Financial Times reported on Tuesday. The ban by the largest U.S. bank by assets, which affects 3,500 accounts, has prompted former Colombia finance minister Jose Antonio Ocampo to accuse it of discrimination in a complaint to the consumer regulator, the report said. According to the FT article, JPMorgan said it was closing the Chase accounts and stopping the credit cards of the officials because of increased compliance costs. Banks are obliged to subject accounts of "politically exposed persons" to added scrutiny.

Whispers From Fed Could Lead to Wild Swings, Internal Critic Says (The Upshot)
Mr. Stein began with the more conventional point that “there are very real limits to what even the most careful and deliberate communications strategy can do to temper market volatility.” If a few people misunderstand the Fed’s message, or find it surprising, there can be broad consequences, as happened last summer. Then he went further, suggesting that the pursuit of clarity could be a cause of volatility. The Fed has sought to announce its plans carefully and to implement those plans slowly, as in its regular reductions of monthly bond purchases. Mr. Stein said that this kind of close management of expectations led investors to hang on the Fed’s words. “There is always a temptation for the central bank to speak in a whisper, because anything that gets said reverberates so loudly in markets,” he said. “But the softer it talks, the more the market leans in to hear and, thus, the more the whisper gets amplified. So efforts to overly manage the market volatility associated with our communications may ultimately be self-defeating.”

Senior partners flee Apollo Global (NYP)
All three — Jordan Zaken, 39, who has been at Apollo since 1999, Stan Parker, 38, a telecom expert, and Ali Rashid, 37, a former Goldman banker — were listed in the offering memorandum for the $17.5 billion fund Apollo finished raising at the end of last year, which means their departures were not totally expected. Since 2008, 44 percent of Apollo’s 27 private equity partners under the age of 50, including the three, have either left or are planning to leave the firm, sources and company documents show.

MSNBC apologizes for 'ill-advised' Cinco de Mayo segment (CNN)
Thomas Roberts, who hosts the show from 5:30 a.m. to 6 a.m., told viewers via Twitter that a segment that featured a correspondent in a sombrero swilling tequila was not intended to demean Mexicans. "On Monday, Cinco De Mayo, 'Way Too Early' made sarcastic references to the way some Americans celebrate the holiday," he tweeted. "It was not our intention to be disrespectful and we sincerely apologize for the ill-advised references." [...] During several moments in the show on Monday, correspondent Louis Burgdorf appeared in a suit and tie and a sombrero. "Happy Cinco de Mayo. Let me just take a shot here to get the thing started," he said before appearing to take a drink. "Ole!" Later, Roberts was shown dancing with a maraca in one hand while there were margarita glasses and bottles of "tequila" on his anchor desk. Burgdorf also popped into the closing shot, in which he apparently pretended to drink from one of the tequila bottles for several seconds as Roberts explained the background of the holiday.


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Opening Bell: 6.28.16

Boris Johnson says "the markets are stable"; Bill Gross sees 50% chance of US recession; Lyft hires bankers; World's oldest Twinkie celebrates 40th birthday; and more.