Berkshire Hathaway Inc. (NYSE: BRK-A) has just released its 2008 annual report, along with the ever-important letter to shareholders from the Oracle of Omaha, Warren Buffett. Last year was Buffett’s toughest ever.
We are sorry to say it, but Mr. Buffett sounds like an aged boxing champion that decided to fight a much younger and larger rival. In that spirit, Mr. Buffett was beaten so bad that he had to go to the hospital and his own prognosis is for 2009 to be a very tough year.
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We already noted what is happening to the General Electric Co. (NYSE: GE) dividend. The company’s plans to save $9 billion from the $0.31 dividend cut being taken down to $0.10 is much more than what we were expecting. We expected “only” a cut by half. But there are many more issues that could be coming down the pipe.
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Mosaic Co. (NYSE: MOS) was lost in the financial shuffle today. Perhaps it should not have been. The stock rose up 8.5% at $43.05 today on more than double the normal volume. Options were extremely active too.
Apple Inc. (NASDAQ: AAPL) has taken an interesting action. It could be a completely harmless one, but in today’s climate it could raise some eyebrows. The company has changed auditors.
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IberiaBank Corp. (NASDAQ: IBKC) is a small regional bank which we have hardly ever covered. But we wanted to take a chance to outline the community bank. This was not among the community banks that outright refused to take the TARP. But the company is sending the money back to the government, something no other bank has done.
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Citigroup (C) Government will take a 36% share. Drops to $1.42 from 52-week high of $27.35.
AMBAC Inc (ABK) Market hates it earnings. Drop to $.56 from 52-week high of $12.37.
Synta Pharmaceuticals (SNTA) Drug trial suspended. Multiple broker downgrades. The daily double. Off to $1.31 from 52-week high of $10.30.
GE (GE) Cuts dividend. Falls to $8.40 from 52-week high of $38.52.
Ebay (EBAY) Concerns recession will hurt e-commerce. Sells down to $10.50 from 52-week high of $33.47.
TheStreet.com (TSCM) Financial advertising falling apart. Down to $1.87 from 52-week high of $9.49.
Douglas A. McIntyre
Unfortunately, the ratings agencies still have some who rely upon what they say. That is still the case when it comes to General Electric Co. (NYSE: GE) and its triple-A rating. Now that the company has cut the dividend, Moody’s is updating its ratings.
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General Electric Co. (NYSE: GE) is finally cutting its dividend. We predicted this, and it has finally come to pass. We said that a cut in half could save $5 billion per year, but the cut is much larger and will save approximately $9 billion per year/
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Canadian-based fertilizer maker Agrium Inc. (NYSE: AGU) made an unsolicited offer for CF Industries Holdings, Inc. (NYSE: CF) earlier this week of one share of stock plus $31.70 cash for each CF share. The offer was valued at $3.6 billion. At the time of the offer, the deal was worth a total of $72 per share of CF. Since then, Agrium shares have fallen from Tuesday’s close at $40.30 to yesterday’s $34.89, about 13%. Interestingly, CF had itself launched a $2.1 billion hostile bid for rival fertilizer maker Terra Industries, Inc. (NYSE: TRA) in January. Terra, of course, thinks the offer is too low, and has resisted CF’s cooing noises.
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In mid-October, Exelon Corporation (NYSE:EXC) offered to acquire NRG Energy, Inc. (NYSE:NRG) in an all-stock deal at a fixed exchange ratio of 0.485 shares of Exelon stock for each share of NRG stock. The deal was worth about $6.2 billion at the time.
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In an amended 13D filing on Target (NYSE: TGT), Bill Ackman’s Pershing Square Capital, a 7.8% shareholder, disclosed they are currently engaged in discussions with the company regarding the consideration by the Board of Directors of certain candidates proposed by the hedge fund as directors.
We covered last weekend about how the $1,000.00 gold was at an inflection point and looking as though it was either poised to pop to $1,200.00 on the speculation of fear or that it was likely to fall back towards $800.00 as reality prevails as the world didn’t flatten and proceed to roll off the edge into the abyss. What is interesting is that even as gold was hitting highs, many of the miners, particularly the speculative miners, were well under highs and have seen even worse pressure this week on gold’s pullback.
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These are the top pre-market analyst downgrades and negative research calls we have seen this Friday morning:
JON C. OGG
These are the top pre-market analyst calls on Wall Street that we have seen this Friday morning:
ANSYS (ANSS) raised to buy at Jefferies; raised to Overweight at Thomas Weisel.
BMC Software (BMC) Raised to Overweight at Thomas Weisel.
Chico’s FAS (CHS) Raised to Outperform at FBR.
Omnicare (OCR) Raised to Overweight at Thomas Weisel.
Thoratec (THOR) Raised to Buy at Piper Jaffray.
Verizon (VZ) Raised to Outperform at RBC.
JON C. OGG
The Commerce Department has just reported Q4-2008 GDP this morning, and as expected it was much worse then the original estimates. The problem is that the “already bad” expectations turned out to be too conservative. Commerce reported that GDP contracted by a rate of -6.2%. The original projection a month ago was -3.8%, and estimates for this morning’s report were about -5.3%.
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Whatever stock options Vikram Pandit, his management team and board have are almost certainly worthless now.
News that the federal government will own 36% of Citi’s common shares through a complex deal have the stock off 40% to $1.48.
It’s not terribly good news for anyone who bought shares in the last four weeks hoping a rescue would drive the stock up.
Douglas A. McIntyre
Citigroup (C) may not have picked up much in its deal with the federal government. It shareholders will get crammed down. Tax payers will own more of Citi, about 36%, which is not necessarily a win.
And, most of the board will lose their jobs, but less-than-competent CEO Vikram Pandit gets to stay. Read More
Dell’s earnings dropped 48% last quarter and now it will probably fire more people. The numbers were not a surprise. Independent research shows PC sales falling around the world as the recession sets in. Earnings from Hewlett-Packard (HPQ) and Lenovo have confirmed that. There is even concern that sales of the popular Apple (AAPL) Mac may drop.
American car companies can always hope that as the economy emerges from recession and car sales pick up that they will have a reasonably good chance to keep market share and return to being profitable businesses.
Research about car consumer satisfaction shows that keeping market share may be hard for US car firms in both a recession and better times. Read More
It has begun to occur to the financial industry and the central banks of the G7 and a number of smaller Western European countries that if some of the nations in Eastern Europe default on their debt, the world may look as it did three decades ago when several Latin American nations struggled to make payments on their sovereign obligations.
The Latin America crisis nearly took Citibank under. Read More
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