Opening Bell: 10.28.14

Author:
Dealbreaker
Updated:
Jan 14, 2019
Original:
Oct 28, 2014

UBS Rises as Investors Bet Legal Challenges May Ease (Bloomberg)
UBS, Switzerland’s biggest bank, rose in Zurich trading after the bank set aside 1.84 billion Swiss francs ($1.94 billion) for litigation provisions, easing investor concern about the future cost of legal challenges. “We are making progress,” Chief Executive Officer Sergio Ermotti said in a Bloomberg Television interview as the bank posted a 32 percent jump in third-quarter profit. “We are today in a position to have a better estimate of how to address those issues. In some cases we may be able to reach conclusions in the foreseeable future.” [...] Net income rose to 762 million francs in the quarter from 577 million francs a year earlier helped by a net tax gain of 1.32 billion francs. While the securities unit had a pretax loss because it booked the bulk of the legal charges, all other businesses, including the wealth-management unit, posted earnings that met or exceeded analyst forecasts.

CIT Profit Rises on Tax Benefit as Assets Grow (WSJ)
The company said CIT Bank’s total assets grew to $20.3 billion as of Sept. 30 from $18.3 billion at the end of June, reflecting its acquisition of Direct Capital as well as new business generation. Its new business volume reached $2.2 billion, up 34% from a year earlier. Loans were $14.7 billion, compared with $10.9 billion a year ago. For the overall firm, assets from continuing operations grew to $46.5 billion as of the end of the third quarter from $42.3 billion a year ago. Overall, CIT posted a profit of $514.9 million, or $2.76 a share, up from $199.6 million, or 99 cents a share, a year earlier. The most recent period included a tax benefit equal to $2.01 a share, the company said.

Phil Falcone isn’t giving up on LightSquared (NYP)
Lawyers for the investor argued in Manhattan Bankruptcy Court on Monday that LightSquared LP is worth more than the $2.5 billion owed to creditors — and therefore Falcone, as majority owner of the equity in LightSquared Inc., its parent, is entitled to receive any excess cash from the sale of its assets. The move by Falcone is a stark turnaround from his position in August — when he said he was seeking a “divorce” from the company. But the latest move shows Falcone is still trying to profit from the company. In addition to the equity, LightSquared Inc., is also part owner of a lease to make telecom’s spectrum work, according to a person familiar with the lease. Falcone tipped the world to his fighting spirit at a Minnesota conference last week. “I will continue to fight for LightSquared,” Falcone said at the Duluth conference, close to where he grew up. “We’re fighting, and will continue to fight until we win, which I know we’ll do,” he said.

Italy's Monte Paschi discussing capital options with government (Reuters)
Italy's Treasury has not ruled out extending repayment deadlines on hundreds of millions of euros in state aid to help troubled lender Banca Monte dei Paschi di Siena as it struggles to raise fresh capital, a person close to the matter said on Tuesday. Officials, who declined to be cited by name, said Monte dei Paschi Chairman Alessandro Profumo and Chief Executive Fabrizio Viola had held meetings in the Economy Ministry on Monday to seek options for the bank, after it failed European Central Bank stress tests. Monte dei Paschi, Italy's third-largest bank, was left badly exposed by the ECB's health check of 130 European banks, needing to raise 2.1 billion euros ($2.7 billion) to meet capital thresholds designed to ensure the solidity of the financial system.

Meet the half-blind sanctuary owner who hand feeds his 14 big cats - including a 700lb Siberian tiger - and lets them cuddle in his bed (DM)
He has been bitten on the nose by a leopard and had his shoulder separated after wrestling with a full-grown Bengal tiger. But Carl Bovard, who is blind in one eye, believes living with 14 big cats including two lions, six tigers and a desert lynx, is a risk worth taking to raise awareness about endangered species. They all spend time living in his Florida home before moving into the outside enclosure and are seen clambering over the pool table and cuddling up in his bed. After an accident left him blind around 13 years ago, Mr Bovard realised the main thing he missed was seeing animals – so when he regained sight in one eye he adopted his first two tiger cubs...His biggest tiger is a Siberian named Samson – he weighs more than 700lbs and is over nine and a half feet tall when he stands on his back legs. Despite the fact that Samson could tear him in two with one swipe of his massive paw Carl still carries his food right to him. He added: 'Some people use a guillotine system to feed their tigers but I walk the food right in.

Standard Chartered Profit Falls 16% (Dealbook)
The bank, based in London, said pretax profit declined to $1.53 billion from $1.83 billion in the third quarter of 2013. Standard Chartered said impairments for loans and other credit risks nearly doubled, to $539 million, from $289 million in the period a year earlier.

McDonald’s May Turn Up on Activist’s Menus (Bloomberg)
As the world’s largest restaurant chain loses customers to rivals such as Wendy’s Co. and Chipotle Mexican Grill Inc., it’s beginning to look vulnerable. McDonald’s valuation relative to earnings is now lower than any of its American peers, according to data compiled by Bloomberg. That, coupled with the burger chain’s cash and low debt, are key ingredients for an activist campaign that could force more share buybacks or changes in strategy.

Apple CEO Fires Back As Retailers Block Pay (Reuters)
Cook argued on Monday that Apple Pay offered better security and privacy than competing services, and that retailers risked alienating customers by limiting choices at checkout. "It's a skirmish," Cook said in response to a question about the retailers' moves. "Merchants have different objectives sometimes. But in the long arc of time, you only are relevant as a retailer or merchant if your customers love you."

NBA dancers low-balled in ‘rah-rah’ deal (NYP)
Cheerleaders — or dancers as they are called — for the Knicks and for the Brooklyn Nets will pull in $200 or less a game and receive no health insurance coverage from their teams, The Post has learned. “There is no way to live off that money,” Cherielee Passalaqua, a former New Jersey Nets hype team member who now cheers for the NBA, told The Post. The meager earnings come to about $25 to $28.50 an hour. While the pay is low, Passalaqua said, most of the dancers aren’t there to get rich and famous — and they know what they’re getting into. “You’re choosing to put on those shorts where you’re bottom’s hanging out, and a push-up bra, and that makeup,” she said. “You’re there
because you love to dance.”

French police arrest gang of 14 armed clowns (UPI)
Police in southern France said they busted 14 teenagers wearing clown makeup and armed with guns, knives and bats.
Investigators said police received numerous reports of "armed clowns" frightening members of the public during the weekend and 14 teenage suspects in not-so-funny makeup were arrested in a high school parking lot in Agde. The teenagers were in possession of guns, knives and baseball bats, police said. Police said a man wearing clown makeup was arrested in a separate incident in Montpellier. The clown allegedly used an iron bar to attack a pedestrian. Threatening clown sightings have been reported in recent weeks in France, Britain and several locations across the United States.

Opening Bell

RBS Braces Itself For Libor Deal (WSJ) RBS stands apart from the other banks caught up in a trans-Atlantic probe of the rate misdeeds because of the U.K. government's 83% stake in the lender. That has put U.K. authorities in an awkward position: They are under intense pressure to get tough on wayward banks but also are eager to protect the value of a taxpayer asset. Defendant in Insider Case: I Was Just Doing My Job (WSJ) Doug Whitman, a former hedge-fund manager, doesn't deny that he probed public companies for nonpublic information. But his criminal-defense team plans to argue that its client was doing exactly what he was supposed to do when he persuaded employees of public companies to give him information that those companies' top brass didn't want getting out. Mr. Whitman "was doing what every diligent, competent fund manager and analyst should do—checking up on companies' management to make sure they are being forthright with their investors," said David Anderson, Mr. Whitman's lead defense attorney, in an email. Tiger Management Helps Next Generation Funds (NYT) In a relatively young industry where stars can quickly fade, Tiger Management — and its myriad affiliates like Falcon Edge — is the closest thing to a hedge fund dynasty. After a brief career in finance, Mr. Robertson started Tiger in 1980 with seed money from friends and family. He regularly racked up double-digit returns by taking big positions in companies with good long-term growth prospects and aggressively betting against those stocks poised to fall. Mr. Robertson trained his young protégés — the so-called Tiger cubs — in the same tradition, creating the next generation of hedge funds stars. After leaving Tiger in 1993, Lee Ainslie started Maverick Capital, which currently manages roughly $10 billion. Stephen F. Mandel Jr. began Lone Pine Capital in 1997. Two years later, Andreas Halvorsen opened Viking Global. “We really gravitated to young people, and that was a great deal of our success,” said Mr. Robertson, 80, who often hired people in their 20s. “I was just an old goat with all these young geniuses around.” As the first wave of Tiger cubs age, they are breeding new funds, too. Blue Ridge Capital, where Mr. Gerson honed his skills, has been a particularly good incubator for talent. While Blue Ridge has subscribed to the long-term strategy of Tiger, the founder, Mr. Griffin, has infused the firm with his own philosophy. As a proponent of behavioral finance, he trained analysts like Mr. Gerson to identify how ego and emotion can affect the market and stock performance. Biggest Chapter Yet For A Poison Pen (WSJ) Daniel Loeb isn't one given to half-measures. The hedge-fund manager competes in triathlons, never, ever drinks from a plastic water bottle and is unsparing at times in his criticism of corporate executives. That is exactly how his investors like him. "I didn't give him the money to have a mellow Dan Loeb," said Hugh F. Culverhouse, a Miami investor whose family once owned the Tampa Bay Buccaneers football team. "If I want a mellow Dan Loeb, let me redeem."...The Yahoo campaign signals a new phase in Mr. Loeb's career. Until now, he was perhaps best-known for his poison-pen letters, in which he has scolded executives for everything from keeping relatives on the payroll to socializing at the U.S. Open tennis tournament. Armed with a much bigger war chest—Third Point managed just $1.7 billion as of April 2009—Mr. Loeb can now aim for bigger targets. Mr. Loeb and his investors have a lot riding on a Yahoo revival. "If he makes money on his position, it will be good," said David Tepper, a fellow hedge-fund manager who has known Mr. Loeb for years. "If he doesn't make money, what is the point?" British man rescued off French Atlantic coast after being overcome with Olympic mania and trying to swim to America (DM) The unnamed 34 year old holidaymaker told his friends on the beach at Biarritz that he was off to New York to carry the Olympic spirit across the Atlantic. They thought he was joking but knowing that he was a strong swimmer decided to let him go telling him that a boat would come to rescue him if he got into difficulty. The man swam well beyond buoys 300 yards out to sea marking legal limits for bathing. Then, watched by lifeguards on the shore, he continued swimming until he was out of sight on his 3,594-mile journey. The lifeguards called out a helicopter and a diver dropped into the sea and explained to the man that it was not a good idea to swim across the Atlantic and advised him to head back towards France. He replied that he was a strong swimmer and felt up to it. At the same time lifeguards arrived in a rescue dinghy and threw the eccentric a line before towing him back to the beach. Laurent Saintespes, senior officer at Biarritz airbase told Agence France Presse, ‘He was a bit naive. But at a time when the Olympics are taking place in London you have to see the funny side of things’. Billionaire Jeff Greene On Democracy (NYM) Lately—like at a recent lunch with Steve Schwarzman, who has likened Obama to Hitler—Greene’s been trying another tactic. “Now I appeal to them selfishly,” he says. “ ‘Don’t you realize that if you don’t take care of this kid when they are 10 years old, you’ll take care of them when they are 20 and 100 instead? We just have to pay a little more taxes. It’s not going to kill us. You buy car insurance. Why not buy some democracy insurance?’ People think that Obama is this leftist, socialist guy,” he says. “But I don’t think they understand what people can go for when they are at the end of their line.” South Korean Youth Eschew Samsung Jobs For Facebook Dreams (Bloomberg) Not so long ago, South Korean students dreamed of lifetime jobs at Samsung Electronics Co. Now, many are shunning the juggernaut, intent on trying to emulate the likes of Facebook’s Mark Zuckerberg. Sim Cheol Hwan, 27, is typical of the trend. He wants to take a break from college in Seoul to set up a company rather than line up for job interviews at Asia’s biggest electronics company paying an average of 77.6 million won ($68,300) a year. So he’s set himself up in his own business making apps for Samsung and Apple phones. “I don’t want to get a job at a top 10 Korean company,” said the Hanyang University engineering student, who spent two years in the military. “Zuckerberg’s success proves that there is a lot of money to be made” in startups. Regulators Target Day-Trading Firm (WSJ) In the Romanian city of Cluj-Napoca, inside a garret up a narrow wooden staircase, four young men in T-shirts spend the day moving rapidly in and out of stocks, trying to ride their shifting momentum for profits. "It's very stressful," says one, dressed in a green T-shirt, blue shorts and Adidas sneakers. "The market is very hard to figure out." The four traders are part of a world-wide network initially set up by a Toronto-owned firm called Swift Trade Inc. Swift's founder, Peter Beck, turned it into one of the largest day-trading operations in the world over the past decade by aggressively expanding into far-flung locations, from China to Nicaragua to Romania, where he could recruit traders on the cheap. Mr. Beck also took an aggressive stance toward the law, say regulators in several countries where his firm has traded. The Financial Industry Regulatory Authority is expected on Tuesday to announce a settlement with Mr. Beck and an in-house brokerage unit for not establishing a supervisory system to prevent "a pattern of manipulative trading activity," according to a copy of the settlement reviewed by The Wall Street Journal. The Best CFOs: A Wall Street Journal Ranking (WSJ) #16: Ann Marie Petach, BlackRock. Chewbacca costume head from ‘Star Wars’ sold for $172K (NYDN) A Chewbacca headpiece used in the original "Star Wars" trilogy sold for a whopping $172,200 at a movie memorabilia auction this weekend. The loyal and lovable walking carpet swept the competition, which included an "Edward Scissorhands" costume worn by Johnny Depp that sold for $86,100 and an Everlasting Gobstopper used in the 1971 movie "Willy Wonka & The Chocolate Factory" that sold for $49,200. The Chewie mask was described by auctioneer Profiles in History as the "finest full costume headpiece of Chewbacca from the original trilogy in private hands," and "the finest screen-correct Chewbacca costume head from the Star Wars trilogy known to exist." The eyes are actual casts of Chewbacca actor Peter Mayhew's closed eyes, the auctioneer said. The expected price for the well-liked Wookie was between $60,000 and $80,000, plus fees and taxes, according to the auction catalog...Four years ago, someone spent a reported $240,000 to get the lightsaber prop used by actor Mark Hamill in the first two movies.