Opening Bell: 7.27.16

Goldman is sued in U.S. over merger linked to Malaysia's 1MDB (Reuters)
Goldman Sachs Group Inc (GS.N) was sued on Tuesday by a major shareholder of a Malaysian bank it once advised, and which accused the Wall Street bank of fraudulently shortchanging it in a merger to curry favor with that country's prime minister. In a complaint filed with the New York State Supreme Court in Manhattan, Primus Pacific Partners said it was seeking $510 million of damages from Goldman and former Managing Director Tim Leissner, after the bank concealed its conflicts of interest with Prime Minister Najib Razak and Malaysia's 1MDB sovereign wealth fund. Goldman called the lawsuit "misguided" and said it would defend against it. A lawyer for Leissner did not immediately respond to requests for comment.

Disgraced Executive Waksal’s Startup Launches IPO (WSJ)
When Sam Waksal launched drug developer Kadmon Holdings LLC in 2010, many on Wall Street were wary of associating with a high-profile executive who had served five years in federal prison for insider trading and other crimes. But big-name investors who backed the firm—including Steven A. Cohen, Daniel Loeb and Ronald Burkle, investment banker Ken Moelis and GoldenTree Asset Management LP—could emerge winners on the heels of Kadmon’s initial public offering on Tuesday. The offering, which raised $75 million, comes in what has been a weak period for both biotech shares and IPOs, despite the Dow industrials and S&P 500 racing to record highs.

Third Point's first-half returns boosted by energy credit investments (Reuters)
Daniel Loeb's $16 billion Third Point LLC said on Tuesday that the firm's investments in energy credits drove positive returns during the first half of the year and is devoting over $1 billion to energy corporate credits. "We came into the year with a short credit portfolio that we reversed sharply in February, getting long over $1B in energy credit," Third Point said in its latest quarterly letter to clients. According to the letter, Third Point's Offshore Fund posted returns of 4.6 percent during the second quarter ended June 30, compared with the Standard & Poor's 500 which returned 2.5 percent.

Wall Street now substantially less certain of a Clinton victory (CNBC)
In the wake of the Republican National Convention and continued damage to Clinton's reputation from the email scandal, just 52 percent of respondents to the July CNBC Fed Survey now believe the Democratic nominee will prevail in November, a sharp drop from 80 percent in the April and June surveys. The survey of the 43 economists, fund managers and analysts, while not a scientific public opinion poll, mirror other polls showing a tighter race. Still, respondents see Donald Trump's victory as a long shot, with just 26 percent saying he is likely to win the White House. Instead, there was a large increase, to 21 percent from 5 percent in July, in the percent saying they don't know who will win in November.

Man leaves clothes in pub as he goes to get cash (Reuters)
A drinker who could not pay his bar bill left his clothes at the pub as collateral as he headed off naked to get cash, Czech police said. The man walked through the town of Prerov in the early afternoon on Monday dressed only in ankle-length black socks, talking on a mobile phone, security camera footage posted on news website www.idnes.cz showed. Police officers soon found the man who explained he had just popped across town to another pub to get some cash. He was allowed to complete his quest and eventually settled the bill, got his clothes back and put them on.

Facebook’s Answer to Silicon Valley Housing Crunch: Build Apartments (WSJ)
Fast-growing Facebook Inc. is in the midst of a push to expand its headquarters complex in its hometown of Menlo Park, Calif., a plan for 6,500 new employees that has rankled some locals frustrated with crowding. So in an effort to shore up city support, Facebook earlier this month made an unusual pledge for a tech company. It would build at least 1,500 units of housing, meant not specifically for Facebook employees, but for the general public. The novel move is a gesture intended to address a growing frustration in the region: too many workers, too few homes.

Apple's cash hoard shrinks for the first time in seven quarters (CNBC)
Apple's enormous cash pile shrunk for the first time in seven quarters. The Cupertino, California-based company said its cash pile shrunk to $231.5 billion in the fiscal third quarter, down $1.4 billion from the previous quarter.

Hedge funds begin to sue over Puerto Rico debt (NYP)
Since the beginning of the year, there have been at least seven lawsuits filed against Puerto Rico’s government by the island’s various creditors, according to a recent Bloomberg report. Of the lawsuits identified, two were filed within the last month by a consortium of hedge funds that includes Aurelius Capital Management, Autonomy Capital, and Monarch Alternative Capital. The hedge funds focused their claims on a portion of Puerto Rico’s $18.3 billion in outstanding general obligation and commonwealth-guaranteed bonds. Collectively, the bonds are secured by all available resources of Puerto Rico and the “good faith, credit, and taxing power” of the island.

Arizona Cops Hunt Walmart Theft Suspect Who Made His Getway On A Mobility Scooter (TSG)
Arizona cops are seeking the public’s help in identifying a thief who fled Walmart on a mobility scooter after pinning a worker to the wall during his escape. As seen in the store surveillance video, the suspect was confronted earlier this month by a female Walmart employee near the Tucson store’s exit as he sought to leave with unpaid items in his scooter’s front basket. After some evasive driving, the suspect ran into the Walmart worker, driving her backwards into a large blue bin. As two men came to aid the woman, the suspect drove out of the store on his gray ride.