Opening Bell: 6.23.16

Brexit, Brexit, Brexit; Chanos thinks SolarCity deal stinks; Mac ’n Cheetos; NASA engineer builds world’s largest nerf gun; and more.

Author:
Dealbreaker
Updated:
Jan 14, 2019
Original:
Jun 23, 2016

Effects of ‘Brexit’ Vote to Span Markets, Politics (WSJ)
The ramifications of the U.K.’s referendum Thursday on European Union membership will spill through Britain’s politics, Europe’s brittle economy and the world’s restive financial markets. A frenzy of recent polls has ping-ponged a tiny lead between the Remain and Leave camps—two points here, three points there, a point here. The last volley of polls Wednesday gave a mixed verdict—some for Leave but one with an eight-point edge for Remain. Betting markets, bookies and traders still lean toward Remain...The Leave camp believes an exit would benefit Britain in the long term. But investors, economists and analysts say in the short term it would take the world’s stocks, bonds and currencies—especially the British pound—on a wild ride. They are braced for changes to the price of gold, to the Swiss franc, to Japanese monetary policy.

Some GOP Business Leaders Are Backing Clinton (WSJ)
More than 50 business executives, including several longtime Republicans, will endorse Hillary Clinton for president on Thursday as her campaign seeks to capitalize on discomfort with Republican Donald Trump.
They include Jim Cicconi, senior executive vice president at AT&T Inc., and Dan Akerson, who held top positions at General Motors Co. and Nextel Communications Inc...The list of business leaders backing her includes several who have supported Democrats in the past, including Eric Schmidt of Alphabet Inc., Sheryl Sandberg of Facebook Inc., and Warren Buffett of Berkshire-Hathaway, Inc. Others endorsing the former secretary of state include Hollywood-turned-internet executive Barry Diller of IAC/InterActiveCorp; Hollywood executive Peter Chernin, of The Chernin Group; Wendell Weeks of Corning Inc.; Reed Hastings of Netflix Inc.; and Rob Marcus of Time Warner Inc.

Twilio IPO Signals Optimism for Tech (WSJ)
Twilio Inc. raised more than it expected in its initial public offering, an optimistic sign for the dozens of other technology companies that have been valued at more than $1 billion in private fundraising. The San Francisco company’s IPO priced at $15 each, raising $150 million by selling 10 million shares, the company said in a release late Wednesday. The offering comes during a tough patch for younger, private technology companies as some of their valuations in private fundraising rounds have fallen in recent months. It also comes as U.S.-listed IPOs are on track for their worst year since the financial crisis.

Tesla Deal Worries Investors (WSJ)
Tesla shares plunged by more than 10% on Wednesday, a day after it proposed an all-stock deal valuing the solar-power company at up to $2.8 billion. Both firms are unprofitable, and SolarCity lost more than 60% of its value over the past 12 months. Its shares closed 3.3% higher. “We are not happy with the offer,” said Sam Korus, an analyst with ARK Investment Management LLC, which holds 75,000 shares of Tesla in three different funds and has often been bullish on the company. He said his firm would likely vote against the offer.

Chanos: ‘Brazen' SolarCity deal is ‘corporate governance at its worst’ (CNBC)
High-profile investment manager Jim Chanos blasted Tesla Motors' proposed acquisition of SolarCity on Wednesday, telling CNBC that the "brazen Tesla bailout of SolarCity" is a "shameful example of corporate governance at its worst." ... "And if you don't want to believe me, consider this: The combined market drop in the value of both companies is more than the equity value of the deal itself — which means that Tesla shareholders think SolarCity shares are essentially worthless," Chanos said. "Finally, it is hard for me to believe that this deal was not being contemplated when Tesla, and Mr. (Elon) Musk himself, sold shares just a few weeks ago."

NASA Engineer Builds World’s Largest Nerf Gun (HP)
Regular Nerf darts are too small for Rober’s ginormous Nerf gun so he makes his own using plungers and pool noodles. The gun is powered by a paintball canister capable of shooting 3,000-pounds-per-square-inch. That’s a little too powerful for Rober’s needs so he’s modified the gun so each blast of air pressure that fills the gun can shoot off five shots before it needs a refill. The darts shoot out of the gun at around 40 mph and can travel nearly 400 feet.

UBS Gives IRS Records on U.S. Citizen’s Account in Singapore (Bloomberg)
UBS Group AG has ended a legal fight with the Internal Revenue Service, agreeing to hand over records on an American client’s account in Singapore as U.S. authorities seek to move beyond Switzerland in their fight against offshore tax evasion. The case involves Ching-Ye Hsiaw, a U.S. citizen living in China who had an account in Singapore from 2001 to 2011. On Feb. 23, the IRS filed a petition asking a federal judge in Miami to force UBS, the largest Swiss bank, to produce account records on Hsiaw. The IRS said it needed the records to determine Hsiaw’s income tax liabilities from 2006 to 2011.

Burger King Jumps Into Snack-Brand Hybrids With Mac ’n Cheetos (Bloomberg)
Burger King, the restaurant chain backed by 3G Capital and Warren Buffett, will begin selling deep-fried sticks of macaroni and cheese encrusted in Cheetos-flavored breading, part of a trend toward blending fast food with well-known snack brands.

Saudi Prince Ends Silicon Valley Tour at Facebook Before UN Trip (Bloomberg)
In the second week of a U.S. trip aimed at improving ties with government officials and drumming up investment, Prince Mohammed Bin Salman met Zuckerberg for the first time. Photos released by the prince’s office showed him wearing jeans and a blazer while touring the Menlo Park, California, campus with Zuckerberg and trying on an Oculus Rift virtual-reality headset.

University administrator wears 'bee beard' to raise money for research center (UPI)
A Washington State University provost allowed thousands of bees to crawl on his face in the shape of a beard to raise awareness about honey bee health. Provost Dan Bernardo and the president of Fungi Perfecti, Paul Stamets, volunteered to wear a "beard" made of bees in hopes of raising funds for a new Honey Bee and Pollinator Research Center at the university. Bernardo remained calm throughout the stunt and told WSU News that he had complete confidence in the staff on hand. "Initially, there's this scratchiness, sort of moving sensation," he said. "It's very noisy, maybe a little nerve-wracking. But I wasn't nervous. We had paramedics and every bee expert within 1,000 miles here, so I figured I was in good hands."

By M.Minderhoud (Own work) [GFDL or CC-BY-SA-3.0], via Wikimedia Commons

Opening Bell

Puerto Rico vs bondholders; Brexit, Brexit, Brexit; Man creates smoothie made of McDonald's burgers; and more.

Opening Bell

Brexit, Brexit, Brexit; Banks pass stress tests; Lindsay Lohan live tweets rant on European Union referendum, attacks 'Brexit' voters; and more.

Opening Bell

SEC Drops Case Against Ex-Berkshire Exec Sokol (Reuters) The U.S. securities regulator has decided not to take action against David Sokol, once considered a possible candidate for the top job at Warren Buffett's Berkshire Hathaway, Sokol's lawyer told Reuters. In 2011, Buffett said Sokol violated the company's insider trading rules to score a $3 million windfall profit on shares of U.S. chemicals maker Lubrizol, which rose by nearly a third after Berkshire Hathaway announced it would buy the company. The U.S. Securities and Exchange Commission began investigating Sokol's investment in Lubrizol shortly after Sokol resigned from Berkshire Hathaway. Sokol's lawyer Barry Wm. Levine told Reuters late on Thursday that he was informed that the SEC had wrapped up its probe and decided not to take action against Sokol. "SEC has terminated its investigation and has concluded not to bring any proceedings against Sokol," said Levine, a lawyer at legal firm Dickstein Shapiro. Sokol has been "completely cleared" as there was no evidence against his client, Levine said. Cohen’s SAC Tops Most Profitable List Amid Insider Probes (Bloomberg) SAC Capital International, Cohen’s flagship fund, was the world’s most-profitable hedge fund in the first 10 months of 2012, earning $789.5 million for Cohen, 56, and his managers, according to Bloomberg Markets’ annual ranking of hedge funds...SAC Capital International is No. 1 not because of performance; it ties for No. 86 on that measure, with a 10 percent return in the Markets ranking of the 100 top-performing funds. Rather, the fund earned the most money because Cohen charges some of the highest fees on Wall Street. While most funds impose a 1 to 2 percent management fee and then take 15 to 20 percent of the profits, Cohen levies 3 percent and as much as 50 percent, according to investors. Geithner's Planned Departure Puts Obama In A Tough Spot (Reuters) The Treasury Department said Geithner would stick to his previously announced schedule to stay until sometime around the Jan. 21 inauguration. Obama chose Geithner to lead the just-ended negotiations with Congress to avert the Dec. 31 fiscal cliff of spending cuts and tax hikes that threatened to push the economy back into recession. But the deal, which preserved most of the Bush-era tax breaks for Americans, sets up a series of crucial fiscal deadlines by delaying automatic spending cuts until March 1 and not increasing the government's borrowing limit. That puts Obama in the tough spot of nominating another Treasury secretary and asking the Senate to approve his choice when lawmakers are in the middle of another budget battle. Egan Jones Says Further US Downgrades Unlikely (CNBC) "This latest round (of negotiations) indicates a sign of health. You have a major ideological clash going on in Congress and many people uncomfortable with it, but it is part of democracy. The more positive light is that we actually have a deal and can move forward," Sean Egan, managing director of Egan-Jones told CNBC on Friday. "We've gotten a lot more comfortable about the U.S. and we probably won't take additional negative actions for the foreseeable future," he added. Almost All of Wall Street Got 2012 Market Calls Wrong (Bloomberg) From John Paulson’s call for a collapse in Europe to Morgan Stanley’s warning that U.S. stocks would decline, Wall Street got little right in its prognosis for the year just ended. Paulson, who manages $19 billion in hedge funds, said the euro would fall apart and bet against the region’s debt. Morgan Stanley predicted the Standard & Poor’s 500 Index would lose 7 percent and Credit Suisse foresaw wider swings in equity prices. All of them proved wrong last year and investors would have done better listening to Goldman Sachs Chief Executive Officer Lloyd C. Blankfein, who said the real risk was being too pessimistic. The ill-timed advice shows that even the largest banks and most-successful investors failed to anticipate how government actions would influence markets. Unprecedented central bank stimulus in the U.S. and Europe sparked a 16 percent gain in the S&P 500 including dividends, led to a 23 percent drop in the Chicago Board Options Exchange Volatility Index, paid investors in Greek debt 78 percent and gave Treasuries a 2.2 percent return even after Warren Buffett called bonds “dangerous.” Fed Divided Over Bond Buys (WSJ) A new fault line has opened up at the Federal Reserve over how long to continue bond-buying programs aimed at spurring stronger economic growth. Minutes released Thursday of the Fed's Dec. 11-12 policy meeting showed that officials were divided. Some wanted to continue the programs through the end of 2013, others wanted to end them well before then and a minority wanted to halt the programs right away. Swiss Bank Pleads Guilty In Probe (WSJ) In the latest blow to Switzerland's centuries-old banking practices, the country's oldest bank pleaded guilty to a criminal conspiracy charge in the U.S. on Thursday and admitted that it helped wealthy Americans for years avoid tens of millions of dollars in taxes by hiding their income from secret accounts abroad. Wegelin & Co., founded in 1741, is the latest Swiss bank to reach a deal with U.S. prosecutors as they crack down on Americans who kept their money in secret accounts overseas and the entities which helped them. Three Wegelin bankers also were charged criminally in the U.S. last year. Subway worker tells customer to 'fight me like a man,' during confrontation over ketchup (WFTV) Luis Martinez said he stopped by a Subway shop in a Walmart on South Semoran Boulevard late Tuesday night to get something to eat. He said he ordered a Philly cheese steak the way he always does. "American cheese, onions and ketchup," said Martinez. Lawrence Ordone was working behind the counter. "He wants ketchup on the Philly cheese steak and I have never put -- we don't even have ketchup at Subway -- I've never put ketchup on anybody's sandwich," said Ordone. Martinez said he didn't want the sandwich without the ketchup and that a man next to him in line offered to buy the sandwich. Ordone said that Martinez mouthed off at the man. Martinez denied saying anything, but neither he or Ordone disputed what they said happened next. "That's when I flew off the handle," said Ordone. "He shoved a chair to the side, like knocked it down to come at me, and I said, 'This is going to be serious,'" said Martinez. "I said, 'Let's go, fight me like a man,'" said Ordone. "I was scared. Next thing, I'm thinking a gun's going to come out," said Martinez. Ordone said he blocked the customer so he couldn't get out. "He threatened to kill me in front of my wife," said Martinez. Martinez called 911, but by the time police got there the Subway worker had already left. Ordone said he was fired from his job Wednesday, and that he is baffled the confrontation started over something as simple as ketchup. "There's ketchup three aisles down. You can go buy your own ketchup, and I promise to God, you can put as much as you want on it and nobody's going to say nothing," said Ordone. Economy Adds 155,000 Jobs (WSJ) Rebuilding following superstorm Sandy, which struck the Northeast in late October, likely added to job growth last month. Nationally, employment in the construction sector advanced by 30,000 jobs. Meanwhile, manufacturing payrolls increased by 25,000 and health-care jobs grew by 45,000. JPMorgan Faces Sanction for Refusing to Provide Madoff Documents (Bloomberg) The Treasury Department’s inspector general has threatened to punish JPMorgan Chase for failing to turn over documents to regulators investigating the bank’s ties to Bernard Madoff’s Ponzi scheme. Inspector General Eric Thorson gave the largest U.S. bank a Jan. 11 deadline to cooperate with the Office of the Comptroller of the Currency probe or risk sanctions for impeding the agency’s oversight. JPMorgan, according to the Dec. 21 letter, contends the information is protected by attorney-client privilege. Rich Catch a Break With Budget Deal Providing Deductions (Bloomberg) “The increases in taxes and limits to deductions are more favorable than expected,” said Christopher Zander, partner and head of wealth planning at Evercore Partners Inc. (EVR)’s wealth management unit. “They could have been worse for high net-worth taxpayers.” Regulators to ease up on banks to get credit flowing (Reuters) Banks will get more time to build up cash buffers to protect against market shocks under a rule change that could help free up credit for struggling economies, a European regulatory source said. The Basel Committee, made up of banking supervisors from nearly 30 countries, is expected to announce the revision on Sunday to its "liquidity coverage" ratio or LCR, part of efforts to make banks less likely to need taxpayer help again in a crisis. The change comes after heavy pressure from banks and some regulators, who feared Basel's original version would suck up too much liquidity at a time when ailing economies are badly in need of a ready supply of credit to finance growth. 'Stripper' arrested after performance art leads to ruckus in Hallandale (SS) According to police and witnesses, Mena, 25, was first spotted standing and yelling in the middle of A1A outside her condo building along the 1800 block of South Ocean Drive about 10:45 a.m. on Wednesday. Noel von Kauffman, 40, said he was walking along the street when he noticed Mena trying to direct traffic while wearing a tank-top, cut-off jean shorts and tall boots...At some point, Mena picked up a traffic cone and threw it at a car driven by Dieter Heinrich, 49, of Dania Beach, according to an arrest report. The cone broke the car's side mirror, causing about $300 in damages, the report indicated. When Heinrich got out of his car, Mena allegedly spat in his face. Von Kauffman said he jumped in to help Heinrich, who had children in the back seat of his car. Mena scratched von Kauffman's wrist as the two men tried to restrain her and move her away from the busy roadway, according to the police report. After pinning her to the ground, von Kauffman said the woman first tried to say the incident was part of a television show and that everything was being caught on camera. Then she claimed she was a federal agent. Then she said she was friends with Hallandale Beach Mayor Joy Cooper and everyone involved would be in trouble, von Kauffman said.

Opening Bell

Elon Musk wants to be Rocket Man; Roku IPO goes vertical; the Trump Trade is back; Thomas the Tank Engine is a cruel, repressive nightmare; and more.

Opening Bell

Barclays Cheaper Than Peers Fuels Breakup Talk (Bloomberg) The break-up discussion will be one of the first issues facing new chairman David Walker, who will succeed Marcus Agius as chairman of Barclays on Nov. 1. Walker said in an interview with the Telegraph newspaper that “my view is that this should continue to be a universal bank,” according to the Aug. 11 article. Agius has also defended the so-called universal banking model, which combines consumer lending with corporate and investment banking. Paul Ryan And What Wall Street Should Know (Dealbook) While Mr. Ryan may appear to be a friend of business, he doesn’t agree with the industry’s biggest talking point these days, the Simpson-Bowles deficit reduction plan. He was a member of the commission and voted it down, arguing that it did not go far enough in overhauling health care entitlements. He later criticized President Obama for not supporting it. That prompted Gene Sperling, director of the National Economic Council under President Obama, to retort on CNN: “Paul Ryan, talking about walking away from a balanced plan like Bowles-Simpson is, I don’t know, somewhere between laughable and a new definition for chutzpah.” Greece Completes Largest Debt Sale In Two Years (WSJ) Give it up for Greece, everyone: "The Greek Public Debt Management Agency said it sold €4.063 billion ($5.01 billion) of 13-week treasury bills at an auction, which included a 30% noncompetitive tranche. The uniform yield was 4.43%. Most of the funds will go to repay €3.1 billion in bonds held by the ECB that mature Aug. 20. That will ensure that the country avoids a default that would make it impossible for Greek banks to continue borrowing from the ECB, on which they currently depend for their survival." Wilbur Ross: Just Let Greece Go, It's Fine (CNBC) "I've been in favor of Greece going out, frankly both from the Greek point of view and the EU point of view," Ross said. "I think there are enough firewalls being built up, particularly now that (European Central Bank chief) Mario Draghi is acting like the lender of last resort, that I don't think it would be that traumatic anymore. Most of the indebtedness of Greece is official debt, no longer private debt, so you don't have the domino problem." Crocs co-founder George Boedecker blames 'girlfriend' Taylor Swift following arrest for drunk driving in Colorado (NYDN) A witness called Boulder authorities early Saturday evening after seeing Crocs co-founder George Boedecker passed out at the wheel of a Porsche with the engine running, according to the Denver Post. Boedecker was busted on suspicion of driving under the influence and is free on $500 bond. When confronted by cops, the 51-year-old Boedecker said that it was actually the 22-year-old Swift who was driving the car, according to a police report obtained by The Smoking Gun and the Denver Post. According to the report, Boedecker said that his "girlfriend" left the vehicle after they got into a fight. When asked who his girlfriend was, Boedecker told the officer she was a "really (expletive) famous" singer, then asked the officer if he knew who Taylor Swift was. When the officer asked Boedecker where Swift was, Boedecker gestured toward a nearby yard, and “said she was in Nashville,” according to the police report. He also described his girlfriend as “bats--- crazy.” Authorities could not find anyone in the area, and Swift is currently dating Robert F. Kennedy Jr.'s 18-year-old son, Conor. Boedecker reeked of booze and was uncooperative with cops, saying “I’m not doing your f------ maneuvers" when asked to take a sobriety test. When asked for his address, Boedecker replied, "I have 17 (expletive) homes," and also told the cops he would have their badges, according to the police report. Knight $440 Million Loss Sealed By New Rules On Canceling Trades (Bloomberg) Knight, whose market-making unit executes 10 percent of U.S. equity volume, lost $440 million on Aug. 1 and its stock has plunged 73 percent after a computer malfunction bombarded the market with unintended orders that exchanges declined to cancel. A decade ago, the firm suffered almost no consequences in a similar breakdown when officials agreed to void trades after Knight mistakenly sold 1 million of its own shares. Peregrine CEO Is Indicted (WSJ) The chief executive of Peregrine Financial Group Inc. was indicted Monday on 31 charges of lying to government regulators regarding the failed brokerage's operations. Russell Wasendorf Sr. faces a maximum sentence of 155 years' imprisonment on the charges and fines of about $7.75 million, according to a statement from the U.S. Attorney's Office for the Northern District of Iowa. Hedge Funds Have $74 Billion As Europe Fire Sale Delayed (Bloomberg) Apollo Global Management, Oaktree Capital Group, Avenue Capital Group, and Davidson Kempner Capital Management are among U.S. firms that have flocked to Europe, setting up offices and raising funds to benefit from the most severe period of distress in the region. The money raised for distressed-debt funds gives the firms about 100 billion euros to spend on deals including leverage, according to PricewaterhouseCoopers LLP. Facebook Shares Unlocking (WSJ) An avalanche of privately held Facebook shares could begin hitting the market this week—potentially putting further pressure on the company's stock—as rules expire that have kept some early investors from cashing out. Record 17-foot python caught in Everglades (Herald Tribune) Scientists say they've caught the biggest Burmese python ever recorded in Florida. The python weighed in at 164½ pounds and measured 17 feet, 7 inches long. It was pregnant with 87 eggs. The snakes are native to Southeast Asia but have established a population of tens of thousands in the Everglades, where the latest find was recorded Friday. It was euthanized and is being studied at the Florida Museum of Natural History.

By MEDEF [CC BY-SA 2.0], via Wikimedia Commons

Opening Bell

IMF getting bearish on the world; Google says "oopsie"; Hard Brexit will blow back on Germans; Cold pizza protest; and more!

Opening Bell

Snapchat thinks it's worth $19 billion; Volatility is interrupting nat-gas traders' sleep; BATS is going to try this IPO thing one more time; 12k snake deal ends in murder; AND MORE.

Opening Bell

China does the rope-a-dope; Theresa May still trying to make a Brexit deal; Danske boss takes a powder; Man rubs produce on his butt; and more!

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