Opening Bell: 1.5.15

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Hedge funder who wanted fewer breadsticks won against Darden (NYP)
Starboard Value was a little-known $3 billion hedge fund run by 42-year-old Jeff Smith when it moved on Darden Restaurants in December 2013, taking a 5.6 percent stake. Smith, following activist Barington Capital, realized that the company needed a drastic overhaul as its family restaurants Red Lobster and Olive Garden had not bounced back from the recession. But instead of listening to the activists’ detailed arguments, Darden decided its solution was to spin off Red Lobster. That infuriated shareholders, who had jumped through hoops to demand a special meeting to vote against the plan. By the time it was all over, Darden’s chairman and CEO, Clarence Otis Jr., had resigned, eight directors agreed to quit, and the rest were thrown out in a boardroom coup during an October proxy battle...Smith, who gained notoriety by suggesting Olive Garden cut back on the free breadsticks and begin to salt its pasta water, is now chairman of the board.

Chaos Rules at Russian Hedge Fund as Boss Vanishes (WSJ)
Blackfield Capital CJSC was one of Moscow’s hottest hedge funds, hosting glitzy parties and embarking on ambitious plans to expand to the U.S. The firm’s founder in 2013 even rented a Manhattan apartment for a record-setting price, according to a real-estate broker, and instructed his U.S. staff to buy a $300,000 sports car. Now, the founder is missing, allegedly along with all of the firm’s assets, according to former employees, in an international mystery that has captivated Moscow’s investment community. The firm’s employees didn’t know anything was amiss until mid-October, when three men charged into Blackfield’s offices in an upscale complex along the Moscow River in central Moscow, said people who were there. The men, who didn’t identify themselves, said they were looking for Blackfield’s 29-year-old founder, Kim Karapetyan, according to the people who were there. But Mr. Karapetyan wasn’t in the office that day or the next, when senior executives explained to the staff of about 50 that there was no longer any money to pay their salaries, said one former senior executive and ex-employees. The executives disclosed that all the money in the company accounts—some $20 million, including investor cash—was also missing, they said. It couldn’t be determined whether investors were from Russia or other countries.

Wall Street Strategists Forecast More Stock Gains in 2015 (WSJ)
...many strategists say any rate increase should be viewed as an endorsement of the U.S. economy’s ability to withstand higher borrowing costs. Wall Street strategists see the S&P 500 rising 8.2% this year, based on the average forecast of banks and money-management firms polled by research firm Birinyi Associates. Accelerating economic expansion in the U.S. and strong corporate-earnings growth will continue to power the rally, they say.

Oil Below $60 Tests U.S. Drive for Energy Independence (Bloomberg)
The U.S. shale boom that’s brought the country closer to energy self-sufficiency than at any time since the 1980s will be challenged in 2015 as never before. The benchmark U.S. crude price has fallen below $60, demand growth is weakening and OPEC, which controls 40 percent of supply, is unwilling to cut output. “The extent and rapidity of the price decline has been a surprise,” said Andy Lipow, president of Lipow Oil Associates LLC, an energy consultant in Houston. “They’re facing a new reality.”

Naked woman gets stuck in ex-boyfriend’s chimney (NYP)
Tony Hernandez, got the rude awakening around 5 a.m. Saturday when the 35-year-old mother of his children, whose name has not been released, attempted to get inside his house, CBS Los Angeles reports. When the woman showed up and got no answer at the front door, she decided to take off all her clothes, make her way up to the 12-by-12 inch chimney — and then shimmy down making a Santa-style entrance. Things took a turn for the worse when the ex-lover got herself stuck just as Hernandez was getting up for work. He discovered the woman after hearing her cries for help. “I’m trapped in the chimney,” he could hear his ex shouting. Hernandez went up to the roof and tried to free her to no avail, according to CBS. He eventually said enough is enough and called 911. The Riverside County Fire Department showed up and finally freed Hernandez’ estranged girlfriend after a two-hour operation that involved busting the fireplace open.

Piketty Says Gates Loves His Book While Disagreeing on Tax Plan (Bloomberg)
Thomas Piketty, the French economist whose best-selling book has added tinder to the debate on income inequality, counts the world’s richest person among his fans. “I had this discussion with Bill Gates a couple of weeks ago,” Piketty, the author of “Capital in the Twenty-First Century,” said today at an economics conference in Boston. “He told me, ‘I love everything that’s in your book, but I don’t want to pay more tax.” A tax on wealth is one of Piketty’s key recommendations for addressing inequality. “I understand his point,” said Piketty, 43, who teaches at the Paris School of Economics. “I think he sincerely believes he’s more efficient than the government, and you know, maybe he is sometimes.”

Pimco Total Return Has Worst Year of Redemptions Ever (Bloomberg)
Investors pulled $19.4 billion from Pimco Total Return Fund (PTTRX) in December, bringing redemptions in 2014 to a record $105 billion, according to data compiled by Bloomberg using information from Newport Beach, California-based Pimco and Morningstar Inc. Assets in the world’s biggest bond fund fell to $143.4 billion as of Dec. 31, according to a Jan. 2 statement from Pimco, down by more than half from a peak of $293 billion in April 2013.

CFPB Sets Sights on Payday Loans (WSJ)
U.S. officials are taking their first crack at writing rules for payday loans, responding to concerns that the short-term, high-rate debt can trap consumers in a cycle of borrowing they can’t afford. The Consumer Financial Protection Bureau is exploring ways to require payday lenders to make sure customers can pay back their loans, according to people familiar with the matter. The bureau is seeking to establish the first federal regulations for the $46 billion industry, which has historically been overseen by states.

Germany's Gabriel says Berlin wants Greece to stay in euro zone (Reuters)
The German government wants Greece to stay in the euro zone and there are no contingency plans to the contrary, Vice Chancellor Sigmar Gabriel said on Sunday, responding to a media report that Berlin believes the currency union could cope without Greece. Gabriel, the Economy Minister and leader of the center-left Social Democrats (SPD), also told the Hannoversche Allgemeine Zeitung that the euro zone had become more resilient in recent years and could not be "blackmailed". "The goal of the German government, the European Union and even the government in Athens itself is to keep Greece in the euro zone," Gabriel said in the interview to appear on Monday.

Woman cited for mailing cow poop to neighbors (UPI)
Burlington police said Kimberly Capdevila, 51, sent the smelly package to neighbors Steve Rowland and Mary Eipert through website poopsenders.com after the neighbors repeatedly complained to police about Capdevila's dog barking during the past three years. "On Dec. 13, Rowland received a package in the mail from poopsenders.com," Des Moines County District Associate Court documents state. "Inside the package was a substance that was identified as animal feces. On Dec. 29, (officers) spoke with Kimberly Capdevila, who stated she had the package sent to the Rowlands because of the ongoing problems between the two families." Police said poopsenders.com, which offers deliveries of cow, elephant and gorilla poop through the United States Postal Service, did not break the law by filling Capdevila's order. The website says customers "may not use our service to threaten, constitute harassment, violate a legal restraint, or any other unlawful purpose. The customer agrees this is a gag gift, novelty service for entertainment only, and that is their only intention." Capdevila was cited for third-degree harassment and is due in court Jan. 6. The suspect told Burlington newspaper The Hawk Eye she did not intend for her neighbors to be offended by the package. "In no way, shape or form did I intend this to be anything more than a practical joke," she said. "I was given a website that I thought was anonymous. I thought it would be a funny thing to do to send it to my neighbors. "After all the problems we've had, I thought it would be a funny thing to do. I am sorry if they took offense to it. If they took offense, I apologize. I never intended to harass them. I look forward to having my day in court."

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Opening Bell: 03.26.13

Bailout Strains European Ties (WSJ) Several officials familiar with talks in Nicosia and Brussels over the €10 billion ($13 billion) rescue for the island described more than a week of chaotic negotiations. European officials cited Cypriot foot-dragging, reversals and dropped communications, a situation one European Union official called "terrifying." Cypriot officials described their European opposites as demanding and inflexible. Big Cypriot Bank Depositors Could Lose 40%: Minister (Reuters) "It could be in that neighborhood but I do not want to anticipate it," Sarris told BBC radio, adding the exact figure was yet to be decided. "But what I have seen suggests a number in that neighborhood." Sheik Spars With UBS Over $20 Million Fee (WSJ) A Kuwaiti sheik alleges that a senior executive at Switzerland's UBS offered $20 million to get the bank an advisory role on one of the biggest-ever acquisitions in the Middle East, but the bank later backed out of the deal, according to the sheik's testimony in a Dubai court case. Sheik Meshal Jarah Al Sabah said in sworn testimony that UBS offered the commission in 2009 to derail a bid by the French media group Vivendi SA for the African telecommunications assets of Zain, Kuwait's biggest mobile-phone company, and to get UBS a lead role finding a different buyer. Sheik Meshal sued UBS last year in the Dubai International Financial Centre courts, where UBS has offices, claiming he wasn't paid his fee. The written submission, which was reviewed by The Wall Street Journal, is his first direct testimony in the case. UBS denies the allegations and said in a statement that it is "vigorously defending this claim." Spain's Deficit Woes Seen Lingering (WSJ) In a report Tuesday, including economic projections for the next two years, the Bank of Spain said the economy will remain in recession, on average, this year, and contract around 1.5%—three times bigger than the government's own official projection. The discrepancy is because an economic uptick expected later this year is likely to be weaker than hoped. Atlantic City's Revel Casino Files for Bankruptcy (Reuters) Morgan Stanley originally owned most of Revel Entertainment Group, which began building the casino, but sold its stake at a $932 million loss in February 2011 to investors led by Kevin DeSanctis. The new owners then obtained a tax package of roughly $261 million from New Jersey and lined up $1.15 billion of financing to help complete the project. DeSanctis resigned earlier this month as Revel's chief executive. Hartmann, the interim chief executive, is a former chief executive of the Mohegan Sun casino in eastern Connecticut and has more than 20 years of experience in the gaming industry. Backers had hoped Revel would become the next Borgata, a joint venture between Boyd Gaming and MGM Resorts International that opened in 2003 and became Atlantic City's top-grossing casino. UBS: $62 million from Nasdaq is paltry compensation for Facebook IPO debacle (NYP) Nasdaq got approval from regulators yesterday to pay out $62 million to trading firms hurt by Facebook’s botched share sale — but UBS is having none of it. The Swiss bank giant has already filed an arbitration demand against Nasdaq, saying the payout doesn’t begin to cover the $356 million it lost because of the exchange’s “gross mishandling” of the IPO. Blackstone Ups Heat On Dell (WSJ) On Monday, a special committee of Dell board members said it viewed a Blackstone proposal as potentially superior to the $24.4 billion take-private offer from Silver Lake Partners and founder and Chief Executive Michael Dell. Investor Carl Icahn, who separately is pursuing the Round Rock, Texas, company, said on Monday he would review Blackstone's offer and may attempt to join forces with the New York firm. Fed Banker Backs Dialing Down Easy Money (WSJ) William Dudley, president of the Federal Reserve Bank of New York, said in a speech the Fed "should calibrate" how much U.S. debt and mortgage-backed securities it buys each month "by allowing the flow rate of purchases to respond to material changes in the labor market outlook." 'Stripper' in Jensen Beach arrested (TCPalm) St. Lucie County Sheriff's deputies March 10 went to the area of the 100 block of North El Mar Drive in Jensen Beach after a report of a woman in her underwear yelling profanities at a neighbor. They found Lisa Marie Paras, 29, in an "underwear like or bikini dress" drinking a Michelob Ultra at the end of a driveway, an affidavit states. A deputy told her to put down the beer. She said she was wearing a bikini. She also said she'd been yelling across the street because the folks there are "(rectal orifices)," an affidavit states. When a deputy tried to get more information, Paras said she's a "stripper and wanted to make me her witness," the affidavit states. Paras put her hands on the deputy's shoulders, and he told her she shouldn't touch him. Described as "obviously intoxicated," Paras tried to explain she faces trespassing charges because of her neighbors. She also thought her landlord stole cash from her bedroom. Meanwhile, the neighbors told investigators Paras came out to the road and started yelling obscenities at them as they cooked steaks on the grill. Paras, they said, was in her undies and drinking beer. Paras reportedly told a deputy she'd had eight to 12 beers. She said the people across the street are "(rectal orifices)" and are "(fornicated) up," an affidavit states. Paras, whose occupation is listed as a dancer, tried to hug a deputy when he asked her to confirm some contact information.