Kirk Kerkorian's Tracinda Corp. is planning to offer $8.50 per share for up to 20 million shares of Ford Motor Co. (NYSE: F), a 13.3% premium over Friday's close. Tracinda now owns 100 million Ford shares, or 4.7% of the outstanding stock, which would increase to 5.6% when the offer is completed. Ford shares climbed over 6.5% in premarket trading. The deal, announced recently, is helping stock futures' upward movement.
Verizon Communications Inc. (NYSE: VZ) reported a 9.8% rise in its first-quarter earnings as its wireless division attracted more customers than other carriers. Excluding items, earnings were 61 cents per shares, inline with estimates. Revenue rose 5.5% to $23.8 billion, also inline with estimates. VZ shares are up 1.9% in premarket trading.
According to The New York Post, Barry Diller and Liberty Media (NASDAQ: LINTA) Chairman John Malone are continuing to talk about "a deal that would trade one or more of IAC Interactive (NASDAQ: IACI)'s assets for Liberty's ownership stake in IAC." Diller is also "expected to meet with his board this week to restart the process of breaking up his company into five separate pieces."
InterActiveCorp (NASDAQ:IACI) and Liberty Media (NASDAQ:LINTA) have sued each other over IACI's planned breakup into five separate businesses. A Delaware Chancery Court Judge is expected to issue a ruling soon. IACI announced the plan to separate IACI into five publicly traded companies on November 5, 2007:
1) HSN, will include business comprising IACI's retailing segment; 2) Ticketmaster; 3) Interval International, which will include CondoDirect, Resort Quest Hawaii and VacationSource; 4) LendingTree, which will include RealEstate.com Domania, GetSmart, Home Loan Center and iNest; and 5) IAC media & advertising, Ask.com, Bloglines, City Search, Cursor Mania, Evite, Excite, insiderpages, iWon, My Fun cards, Black Web Enterprises Shoebuy.com, Match.com.
IACI April option implied volatility of 47 is above its 26-week average of 38 according to Track Data, suggesting larger risk.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
Landmark reportedly is expecting to get $5 billion for the property though bidders tell the Times that $4 billion is a more realistic figure. I would venture that the company will get the higher figure because properties like this don't often come on the market.
Not only is the cable channel one of the most lucrative, its Web site is wildly popular as well. Unlike CNN, people don't just tune in when there is big news. Energy traders hang onto the channel's every word when they make bets on the hugely volatile commodities for oil, natural gas and electricity. People also rely on the company's forecasts to plan their lives. Moreover, The Weather Channel is in a good position to benefit from the public's growing interest in global warming.
After hitting a one-year high of $40.99 last February, the stock hit a one-year low of $23.30 last month. This morning, IACI opened at $26.08. So far today the stock has hit a low of $25.52 and a high of $26.44. As of 10:50, IACI is trading at $25.75, down $0.52 (-2.0%). The chart for IACI looks bearish but improving slightly, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
IAC/InterActive Corp. (NASDAQ: IACI) Chief Executive Barry Diller is one CEO who cannot be tamed by his corporate public relations staff or lawyers. He says what he wants when he wants, seeming not to care much for the potential ramifications.
Take his fight with fellow tycoon John Malone of Liberty Media Holding Corp. (NASDAQ: LINTA) over Diller's plan to split up his conglomerate that's been cobbled together through dozens of acquisitions of seemingly disparate companies. Liberty also happens to own majority stake in IAC. However, a long-standing agreement with Diller allows the mogul to control it through a proxy agreement. Well, at least that was the case until recently.
Liberty has asked a Delaware Chancery Court to remove Diller from IAC's board [subscription required] along with other members, and to have several of Liberty's nominees put in their place. The company also asked for Diller to be removed from BDTV, which the Wall Street Journal described as "a little-known entity through which Liberty owns most of its stake in IAC."
Stock futures were higher this morning, indicating Wall Street could start on a positive note, continuing yesterday's late-session rally as investors hope for further rate cuts. Investors will also examine more economic data and earnings today.
In what has become usual on Wall Street, the bleak new-home sales numbers reported Monday actually helped push stocks higher as it reignited speculation that the Federal Reserve will cut interest rates by a half-point this week. The Dow industrials finished up 176 points, or 1.45%, the S&P 500 was up 23 points, or 1.76%, and the Nasdaq Composite rose 23 points, or 1.02%.
The Federal Reserve is scheduled to open the two-day Federal Open Market Committee meeting Tuesday afternoon. The decided policy announcement usually comes at the conclusion of the meeting, that is tomorrow at 2:15 p.m. EST. The key rate now stands at 3.5% after the Fed had cut rates by three-quarter-point in an emergency meeting last week. Many economists believe the Fed will lower its key rate by as much as one-half percentage point to 3%. Banks will then lower the prime rate, helping lenders get loans at lower rates.
A number of economic readings Tuesday include some more housing data:
RealtyTrac already reported foreclosure data. The number of foreclosures soared by 75% in 2007, with 405,000 households losing their home, with total foreclosure filings soared 97% in December alone compared with December of 2006.
At 8:30 a.m. EST, December durable goods orders is due.
At 9 a.m., the S&P/Case-Shiller Home Price Index for November is released.
At 10 a.m. January consumer confidence will be reported. The Census Bureau will also give its report on fourth-quarter home ownership and the number of vacant homes for sale on the market.
What once appeared to be a funny dust-up between a couple of older gentlemen has gotten nasty. John Malone's Liberty Media (NASDAQ: LINTA) has long held a controlling interest in IACI (NASDAQ: IACI), run by former Hollywood mogul Barry Diller. Diller has had the right to vote Liberty's shares giving him de facto control of IACI.
Diller had made the decision to take IACI and break it into five publicly traded pieces. That probably made some sense. The Home Shopping Network does not belong under the same roof as Ask.com and Lending Tree. But, Malone has not seen enough bang in the IACI share price since the spin-offs were announced. The stock trades at just over $27, near its 52-week low.
Mr. Malone today moved to push out Diller and most of the board that supports him at IACI. Whether Malone can take away the rights Mr. Diller has to vote Liberty's shares is unclear.
According toThe Wall Street Journal, in a response to Liberty's actions Mr. Diller said in a statement: "After reading this new salvo, I am beginning to think these people are insane. Everything they cite is hogwash. First of all, we have never asked the board to take action on any specific proposal high, low or no-vote. What we have done, which we thought was the responsible thing to do given this conflict, is to go to the Delaware court and ask them to tell us what rights IACI has or doesn't have."
Wall Street will just have to wait a few weeks to see who is insane and who is not.
Douglas A. McIntyre is an editor at 247wallst.com.
IACI is recently up 20 cents to $24.60; shares near three-year low into company break up.
IACI is expected to report EPS on February 6.
IACI announced the plan to separate IACI into five publicly traded companies on November 5, 2007:
HSN, will include business comprising IACI's retailing segment.
Ticketmaster.
Interval International, which will include CondoDirect, Resort Quest Hawaii and VacationSource.
LendingTree, which will include RealEstate.com Domania, GetSmart, Home Loan Center and iNest, and
IAC media & advertising, Ask.com, Bloglines, City Search, Cursor Mania, Evite, Excite, insiderpages, iWon, My Fun cards, Black Web Enterprises Shoebuy.com, Match.com.
IACI February option implied volatility of 47 is above its 26-week average of 33 according to Track Data, suggesting larger risk.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
Last night marked a once a every-few-years event: another Major League Baseball team got sold. Time Warner Inc. (NYSE: TWX) was finally given all approvals to close the sale of the Atlanta Braves to Liberty Media Corp. (NASDAQ: LINTA). The hold-up was the approval from Major League Baseball because of media changes and the potential changes that they take into consideration, but that is final.
Liberty Media exchanged approximately 68.5 million shares of Time Warner common stock for a newly created subsidiary that holds the Atlanta Braves, Time Inc.'s Leisure Arts, and $960 million in cash. Liberty has also retained approximately 103 million shares, or about 2.8% of Time Warner common stock.
This will also essentially complete Time Warner's $20 billion share buyback plan, taking care of two parts of its restructuring at once. This is a deal that had been in the works for some time, and that should put the restructuring at least well into the second half of the game. Batter up!
Jon Ogg is a partner at 24/7 Wall St.; he does not own securities in the companies he covers.
Barron's Online's (subscription required) "Inside Scoop" reported that Yahoo Inc (NASDAQ: YHOO) director Edward Kozel spent $595,200 buying 20,000 shares of Yahoo on the open market.
The Wall Street Journal (subscription required) reported that Brady Dougan will succeed Oswald Grubel as CEO of Credit Suisse Group ADS (NYSE: CS).
The Financial Times (subscription required) reported that DaimlerChrysler AG (NYSE: DCX) has hired JPMorgan Chase & Co (NYSE: JPM) to explore Chrysler's future. "All options are on the table," said chairman Dieter Zetsche.
OTHER PAPERS:
According to the Detroit News, Ford Motor Company (NYSE: F) is offering cash rebates on the new Ford Edge crossover, but says the move is a testament to the new vehicle's success. Automakers usually add incentives when they are having a difficult time selling selling a particular model.
The Telegraph wrote that several media companies have accused Google Inc (NASDAQ: GOOG) of selling advertising for two piracy websites, and smaller advertisers are complaining that their ads are appearing on sites with no content that may be run by fraudsters.
Investor's Business Daily's"New America" column focused on Liberty Media Corporation Interactive (NASDAQ: LINTA), which owns the QVC home shopping network. The article notes that QVC had revenues last year of about $5.5B, concluding a run of 20 years of increased sales.
Before the bell: Futures higher following deal news; investors await Fed move
InterActiveCorp
Whomever buys The Weather Channel will probably see nothing but blue skies.ss
.gif){kind=logo}
Just how high will U.S. gasoline prices rise?
Nordstrom and Kohl's post smaller-than-expected Q1 profit declines
Oil hits record $127.43 on supply concerns, raised Goldman forecast
