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Getting Ready For Large Blackrock Share Supply (BLK, BCS)

Administrator — Tue, 22 May 2012 16:12:38 +0000

Blackrock, Inc. (NYSE: BLK) is about to get a huge amount of shares dumped onto the stock market. Barclays (NYSE: BCS) is set to unload a stake of about 19.6% or so which was worth more than $6.1 billion. Due to an ongoing share sale in the market, that stake is now worth closer to about $5.8 billion.

We have seen that Blackrock will buy about $1 billion of the shares itself as part of a share repurchase plan. Still, that leaves about $5 billion that the market will have to absorb and this comes at a time when it is an understatement to say that Main Street is not exactly hot on Wall Street investment banking and money management firms.

Barclays is unloading these shares before new Basel rules apply which would have forced the company to count the share stake as capital. The offering is being conducted by Barclays itself along with the firms of Morgan Stanley and BofA Merrill Lynch. Barclays owns 32,178,505 shares of the series B convertible preferred stock and 3,031,651 common shares per the filing, and this comes to roughly a 19.6% economic interest in Blackrock. The applicable percentage of ownership for the selling stockholder is based on 139,564,123 shares of common stock outstanding as of March 31, 2012.

Blackrock also has a filing for a note offering which will ultimately be led by Citigroup, J.P. Morgan, and by Wells Fargo Securities. Blackrock shares were at $180 as recently as May 11 and the shares closed at $171.91 just this last Friday. Shares closed at $167.73 on Monday and now shares are down another 1.2% to $165.86 in mid-day trading in New York.

Blackrock’s big issue here is that it rarely trades 1 million shares in a day, with only 8 trading days of 1 million or more shares in just the last three months and just ten trading sessions with 1 million shares or more in the prior three-month period.

Blackrock has traded in a range of $137.00 to $209.37 over the last 52-weeks. The market value today is $29.8 billion, so this is going to be a large offering to absorb.

Dow Jones has listed that the secondary offering is set to price on Wednesday evening for Thursday trading.

JON C. OGG

Filed under: ADR, Banking, Financial Stocks, Secondary Offering Tagged: BCS, BLK

Are Bank Guarantees Coming For Europe? (NBG, IRE, STD, BBVA, DB, BCS, UBS)

Administrator — Mon, 21 May 2012 18:30:41 +0000

It is never a good thing to see a run on the banks. That is what the fears were recently indicating in Greece. The problem is that Spain is a much larger problem due to excessive lending and the notion that it is a much larger economy than Greece. And what about Italy? Spain and Italy have just recently seen bank rating downgrades. And you know more downgrades are coming.

So the question is, ahead of a summit aimed at putting up fences in Europe to contain problems can the banks really make it. We have heard all sorts of new stories and rumors and frankly it is hard to know what is posturing, what is malarkey, and what is reality. Some talk about bank guarantees is out there, and other chatter is on deeper assistance. And what about lending directly to banks but not the nations? Reuters has a speech today worth a read that underpins some of the problems and hopes for Europe given by ECB policymaker Joerg Asmussen.

A look at the banking ADRs today signals that the bank issues “may” be manageable for Greece or Ireland. The problem is that this could just be a short-covering head fake too. The ADRs for Spain are still in the red.

National Bank of Greece SA (NYSE: NBG) is up 4% at $1.56 against a 52-week range of $1.45 to $7.65. The Bank of Ireland (NYSE: IRE) is up 3.8% at $4.93 against a 52-week range of $3.99 to $17.50.

Banco Santander, S.A. (NYSE: STD) is down 1.2% at $5.70 against a 52-week range of $5.52 to $11.92; Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBVA) is down 1.1% at $6.19 against a 52-week range of $5.96 to $12.13. An IIF report on loan losses is holding these banks down today.

And what about broader exposure? The ADR of Deutsche Bank AG (NYSE: DB) is up 2.6% at $36.95.

Barclays PLC (NYSE: BCS) is technically not even a part of the Euro-woes as far as sovereignty, but it would be absolutely naive to think they have no exposure. Ditto for UBS AG (NYSE: UBS) in Switzerland. Barclays is up 2.6% at $11.44 against a 52-week range of $8.38 to $18.40; and UBS is up 1.6% at $11.44 against a 52-week range of $10.41 to $19.62.

JON C. OGG

Filed under: ADR, Banking, Bankruptcy, International Markets Tagged: BBVA, BCS, DB, IRE, NBG, STD, UBS

Media Digest (5/21/2012) Reuters, WSJ, Financial Times

247wallst — Mon, 21 May 2012 10:31:07 +0000

Alibaba buys back a 20% share held by Yahoo! (NASDAQ: YHOO) for a combination of cash and preferred shares worth $7.1 billion. (Reuters)

The heads of Samsung and Apple (NASDAQ: AAPL) will discuss a settlement to patent wars between the two companies over smartphone IP. (Reuters)

General Motors’ (NYSE: GM) Opel faces a harsh reaction from workers arising from plant closures. (Reuters)

Nasdaq (NASDAQ: NDAQ) will change its trading systems after trouble with the Facebook (NASDAQ: FB) IPO. (Reuters)

Google (NASDAQ: GOOG) says its has Chinese approval to buy Motorola Mobility (NYSE: MMI). (Reuters)

Dalian Wanda Group, based in China, will buy the AMC movie chain for $2.6 billion. (WSJ)

Greece’s conservative parties, which favor austerity, begin to show improvements in U.S. polls. (WSJ)

The European Union’s José Manuel Barroso says Greece should expect pressure over austerity to remain high despite indications otherwise from the G8 meeting. (WSJ)

Some accountants say that Chesapeake Energy (NYSE: CHK) costs misrepresent the firm’s financial position. (WSJ)

The G8 meeting and the opinions of EU leaders may press Merkel to allow Europe to aid some large banks in the region. (WSJ)

UK and US bank regulators prepare for any failure of several financial firms, which include Goldman Sachs (NYSE: GS), JP Morgan (NYSE: JPM) and Barclays (NYSE: BCS). (FT)

China begins to cancel or delay some commodities imports — another sign its economy has slowed. (FT)

UK Prime Minister David Cameron says the EU should prepare for the departure of Greece. (FT)

Douglas A. McIntyre

Filed under: Press Digest Tagged: AAPL, BCS, CHK, FB, GM, GOOG, GS, JPM, MMI, NDAQ, YHOO

Media Digest (5/7/2012) Reuters, WSJ, NY Times, FT

247wallst — Mon, 07 May 2012 10:22:14 +0000

Voters in Greece and France turn away from German austerity measures set for the region’s weakest nations. (Reuters)

AT&T (NYSE: T) moves into the home monitoring market. (Reuters)

Ally Financial falls back into financial trouble. (Reuters)

LG Electronics will release a Google (NASDAQ: GOOG) TV later this year. (Reuters)

Lenovo to invest $800 million to move into mobile products markets. (Reuters)

The FDA could approve drugs to prevent healthy people from getting HIV. (WSJ)

India starts a Google antitrust investigation. (WSJ)

The “Avengers” will help press the results of Walt Disney’s (NYSE: DIS) movie studio higher. (WSJ)

Barclays (NYSE: BCS) will start a U.S. online bank. (WSJ)

The Oprah Winfrey Network may never make money. (WSJ)

Europe’s banks begin to hold cash again, wary of the region’s financials. (WSJ)

Berkshire Hathaway’s (NYSE: BRK-B) B shares underperform the market so far this year. (WSJ)

Wireless carriers spend less for smartphones, which means some costs will be passed to consumers. (WSJ)

The Washington Post Company (NYSE: WPO) continues to be hurt by flagging results at its Kaplan education division. (WSJ)

The United States will sell more of its shares in AIG (NYSE: AIG). (WSJ)

Rebates that stock exchanges provide brokers may hurt returns to individual investors. (NYT)

Many companies enter the business of using mobile phones for retail payments. (NYT)

The ad prices Facebook charges customers has risen by 20% recently. (FT)

Deals by big pharma to buy smaller rivals continue to be driven by patent expirations. (FT)

Douglas A. McIntyre

Filed under: Press Digest Tagged: AIG, BCS, BRK-B, DIS, GOOG, T, WPO

The Return of the Euro-Bank Fears (NBG, STD, BBVA, IRE, DB, UBS, CS, BCS, RBS)

Administrator — Wed, 02 May 2012 15:45:11 +0000

The U.S. stock markets have by and large been decoupled from the woes of Europe most of this year, as well as the slowing of growth in the key markets of China, India, and in many parts of South America. While “Sell in May and go away!” looks less evident this year, there are some new concerns brewing over the European Union and its banking sector.

S&P actually raised its rating on Greece this morning, but this was a technical upgrade rather than any real improvement. The fears elsewhere are outweighing the hopes right now as French and Dutch austerity measures are now being fought in the political scene. Even more fresh data from various purchasing managers readings from France, Germany, Spain, and elsewhere are only adding fuel to the fire that the recessionary climate in Europe is worse than many have hoped.

Greece saw something highly unusual today: A RATINGS AGENCY UPGRADE! After the distressed debt exchange, Standard & Poor’s removed the SD rating (selective default) up to a rating of “CCC” and said that the long-term outlook is STABLE. The short-term foreign and local currency sovereign credit rating was raised to “C” from the “SD” rating and the outlook is now STABLE as well. Unfortunately this is of no help to National Bank of Greece SA (NYSE: NBG) with its ADRs down 4% at $2.19 in New York trading.

More fears are coming up in Spain as the bank leverage is high. Banco Santander, S.A. (NYSE: STD) is down almost 6% at $6.01 in New York trading, and the prior 52-week trading range was $6.08 to $12.48. Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBVA) is down 5.5% at $6.45 and shares briefly dipped to a 52-week low today under the prior 52-week range of $6.43 to $12.96.

Can you leave Ireland out? No, and the ADRs of The Bank of Ireland (NYSE: IRE) are down 4.8% at $5.92 in low-volume trading mid-day in New York.

Deutsche Bank AG (NYSE: DB) is down 4.5% at $452.16 in New York trading of its ADRs.

As Switzerland is being considered a haven, there is a mixed reaction. UBS AG (NYSE: UBS) is up 1.3% at $12.84, while Credit Suisse Group (NYSE: CS) is down 4.2% at $22.51 in New York ADR trading.

England is certainly not in the Euro, but the banks there have deep ties to dealings in Europe. Barclays PLC (NYSE: BCS) is down 4.4% at $13.88 and Royal Bank of Scotland Group plc (NYSE: RBS) is down 2.4% at $8.02 in New York ADR trading.

JON C. OGG

Filed under: ADR, Banking, Economy, International Markets Tagged: BBVA, BCS, CS, DB, IRE, NBG, RBS, STD, UBS

Euro Bank Bashing Comes Back With Force (BCS, DB, STD, BBVA, IRE, NBG)

Administrator — Wed, 04 Apr 2012 18:38:05 +0000

European banks are taking it right on the chin, or maybe the chin and the nose. The reports of a bad Spanish debt auction managed to push up borrowing costs again and it only makes one wonder what the Europeans will do when every European is taking their two to three-week holidays in the summer rather than buying government bonds. Some may try to again blame the end of the stimulus from Ben Bernanke and friends but this is frankly something we take serious issue with.

Today’s move has been brutal on the key ADRs out of Europe, and oddly enough the damage may seem counterintuitive if you just look at the ADRs. Barclays PLC (NYSE: BCS) is down 4.9% at $14.04 against a 52-week range of $8.38 to $20.32, but Deutsche Bank AG (NYSE: DB) is down 3.9% at $46.40. How are the drops of the top British and German banks worse than Spain?

Banco Santander, S.A. (NYSE: STD) is down 2.4% at $7.18 against a 52-week range of $6.77 to $12.57; Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBVA) is down 2% at $7.40 against a 52-week range of $7.02 to $13.01.

Head north to Ireland and The Bank of Ireland (NYSE: IRE) is down 4% at $6.03 versus an adjusted 52-week trading range of $3.99 to $24.90. Then head back into the Mediterranean and National Bank of Greece SA (NYSE: NBG) is down the worst of the Euro-Zone banks with a drop of 10.2% at $2.118 against an adjusted 52-week range of $1.64 to $9.40.

Another day, one less Euro…

JON C. OGG

Filed under: ADR, Banking, Financial Stocks, International Markets Tagged: BBVA, BCS, DB, IRE, NBG, STD

Goldman Sachs to Review Policy on Conflicts of Interest (GS, KMI, EP, BCS, BAC, C)

Paul Ausick — Fri, 16 Mar 2012 16:23:03 +0000

Mergers and acquisitions bankers may become subject to stricter rules for revealing their personal investments as a result of a review now being conducted at Goldman Sachs Group Inc. (NYSE: GS). A Delaware judge recently scolded Goldman for failing to disclose its top M&A banker’s personal $340,000 investment in Kinder Morgan Inc. (NYSE: EP) to El Paso Corp. (NYSE: EP) while the bank was negotiating the $21 billion acquisition of El Paso by Kinder Morgan.

According to a report in The Wall Street Journal, “Many bankers said they consider personal stockholdings a ‘common-sense’ disclosure. As a result, conflicts due to a financial adviser’s personal holdings rarely become a problem … .” The report also noted that Barclays plc (NYSE: BCS), Bank of America Corp. (NYSE: BAC), and Citigroup Inc. (NYSE: C) are also reviewing their conflict of interest rules.

Goldman Sachs is under particular scrutiny now, following the publication of a scathing op-ed piece by one of its former executive directors.

Filed under: Banking Tagged: BAC, BCS, C, EP, GS, KMI

Moody’s Bank Downgrade Warnings Look Very Staged (CS, MS, UBS, BCS, DB, GS, HBC, BAC, NMR, FAS)

Administrator — Thu, 16 Feb 2012 14:14:37 +0000

If you think ratings agencies do not quite matter any longer, today may be a reminder that they can still create at least some nervousness even if they are just late to the party. Moody’s has a downgrade warning on 17 banking and investment banking outfits. While this is a ‘warning’ rather than a downgrade, this certainly looks and feels staged to the point that the downgrades on most of the banks and investments seems assured on level or another. In short, this is being staged.

In the Moody’s warning, Credit Suisse Group (NYSE: CS), Morgan Stanley (NYSE: MS), and UBS AG (NYSE: UBS) were put on notice that their credit ratings could be downgraded potentially by as many as three notches. That is a very aggressive downgrade warning, and it now almost assures that a downgrade of one or two notches is almost certain.

Warnings of a two notch downgrade were handed out to Barclays PLC (NYSE: BCS), BNP Paribas, Credit Agricole, Deutsche Bank AG (NYSE: DB), Goldman Sachs Group Inc. (NYSE: GS) and HSBC Holdings PLC (NYSE: HBC). This seems to all but assure that at least a one notch downgrade could come on these.

Interestingly enough, Bank of America Corporation (NYSE: BAC) and Nomura Holdings, Inc. (NYSE: NMR) were “only” given warnings of a possible one notch downgrade.

Moody’s noted that these existing ratings just do not reflect the current market challenges. Here are the pre-market trading indications on each, in New York trading indications:

Credit Suisse Group (NYSE: CS) -0.7% at $25.36;
Morgan Stanley (NYSE: MS) -2% at $18.58;
UBS AG (NYSE: UBS) is down only $0.01 at $13.91;
Barclays PLC (NYSE: BCS) is down 0.4% at $14.97;
Deutsche Bank AG (NYSE: DB) is down 1.2% at $42.45;
Goldman Sachs Group Inc. (NYSE: GS) is down 0.5% at $112.55;
HSBC Holdings PLC (NYSE: HBC) is down 0.5% at $44.69;
Bank of America Corporation (NYSE: BAC) is down 0.8% at $7.72.

Even the triple-leveraged Direxion Financial Bull 3X Shares (NYSE: FAS) is down ‘only’ 0.7% at $86.30 in the pre-market.

What is interesting here is that the move lower this morning is on the heels of major moves higher since the first of the year. The downgrades seem assured on at least some level now, but the market is not really acting as though it is ready to panic.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Analyst Calls, Banking, Financial Stocks Tagged: BAC, BCS, CS, DB, FAS, GS, HBC, MS, NMR, UBS

Media Digest (2/10/2012) Reuters, WSJ, NYT, FT

247wallst — Fri, 10 Feb 2012 11:40:34 +0000

The U.S. and state attorneys general reach a $25 billion settlement with five banks over mortgage abuses. (Reuters)

The Hong Kong division of Alibaba may go private as part of a refinancing and a buyback of Yahoo!’s (NASDAQ: YHOO) shares. (Reuters)

Financial backers of Greece say they are concerned about whether a deal to lend the company more money will hold. (Reuters)

Economists concerned about the U.S. economy a few months ago change their opinions. (Reuters)

A fall off in investment bank activity hurts Barclays (NYSE: BCS) earnings. (Reuters)

China’s imports fall, raising demand concerns. (Reuters)

The new CEO of Sony (NYSE: SNE) will try to marry hardware and software for many of the firm’s products, just as he did with the PS3. (Reuters)

The head of Xstrata is under pressure to get a better deal for a Glencore merger. (Reuters)

A new settlement between banks and the government could help one million homeowners. (WSJ)

Google (NASDAQ: GOOG) to launch a home entertainment system as it moves into the hardware space as Apple (NASDAQ: AAPL) has. (WSJ)

An insider trading bill is broadly supported by Congress members. (WSJ)

Oracle (NASDAQ: ORCL) expands its use of web-based software products. (WSJ)

The FDA will speed the approval of biosimilar drug treatments. (WSJ)

An Alcatel-Lucent (NYSE: ALU) reorganization could cost 1,800 jobs. (WSJ)

Weekly unemployment benefits numbers improve steadily. (WSJ)

Greek unemployment rises to 20.9%. (WSJ)

The head of the European Central Bank pushes banks to take inexpensive loans to stabilize eurozone financials. (WSJ)

Canada will allow uranium exports to China. (WSJ)

A Hasbro (NASDAQ: HAS) and Zynga (NASDAQ: ZNGA) partnership to marry physical games with online ones. (WSJ)

Southern Co.’s (NYSE: SO) plan to build a reactor in Georgia receives NRC approval. (WSJ)

Apple’s market cap passes that of Google and Microsoft (NASDAQ: MSFT) combined. (WSJ)

New research suggests the education gap between rich and poor has widened. (NYT)

German officials are worried that the ECB has cut lending standards too much. (FT)

Douglas A. McIntyre

Filed under: 24/7 Wall St. Wire, Press Digest Tagged: AAPL, ALU, BCS, GOOG, HAS, MSFT, ORCL, SNE, SO, YHOO, ZYNG

Media Digest (2/7/2012) Reuters, WSJ, FT, Bloomberg

247wallst — Tue, 07 Feb 2012 11:49:30 +0000

Glencore and Xtrata agree to a $90 billion merger. (Reuters)

Greek leaders face a deal for settling sovereign debt matters as workers strike. (Reuters)

Toyota (NYSE: TM) posts good third-quarter profits and says the U.S. will be a difficult market. (Reuters)

Boeing (NYSE: BA) may have trouble with its 787 deliveries after flaws were found in the body of the aircraft. (Reuters)

Verizon (NYSE: VZ) and Redbox set a deal to compete with Netflix (NASDAQ: NFLX). (Reuters)

Amazon.com (NASDAQ: AMZN) may open a physical store in Seattle. (Reuters)

House Republicans move to reopen debate on the Keystone XL pipeline. (Reuters)

Problems with regulators have made the Medco (NYSE: MHS) merger with Express Scripts (NASDAQ: ESRX) less likely. (Reuters)

The U.S. will create programs to help the troubled money market industry. (WSJ)

Barclays (NYSE: BCS), Credit Suisse (NYSE: CS), Morgan Stanley (NYSE: MS), Goldman Sachs (NYSE: GS) and Royal Bank of Scotland (NYSE: RBS) will bid as the New York Fed auctions risky bonds it got as part of its AIG (NYSE: AIG) bailout. (WSJ)

Greece will cut 15,000 public sector jobs. (WSJ)

Motorola Mobility (NYSE: MMI) wants a 2.25% royalty on Apple (NASDAQ: AAPL) iPhone sales based on IP claims. (WSJ)

Walt Disney (NYSE: DIS) and Univision are in talks to create a 24-hour news channel. (WSJ)

India cuts its growth forecast to 6.9%. (WSJ)

Eugene Isenberg of Nabor Industries (NYSE: NBR) gives up a $100 million retirement payout. (WSJ)

The Obama budget will have $3 trillion in cuts over 10 years and $1.5 trillion in new taxes — mostly on the rich. (WSJ)

Japan wants to enter a large Asia-Pacific trade agreement, but the U.S. may object. (WSJ)

Satellite makers say that U.S. regulations make it difficult for them to compete overseas. (WSJ)

Republic Airways (NASDAQ: RJET) is about to sell Frontier. (WSJ)

New LeadershipIQ research breaks companies into four groups based on management style and systems to create results. (WSJ)

Walmart (NYSE: WMT) promotes a manager to be the new CEO of its China operations. (WSJ)

Some large European banks will not take European Central Bank loans because they fear it will make them appear weak. (WSJ)

BP (NYSE: BP) raises its dividend. (FT)

An escrow fund may be set to help Greece instead of all aid money going to the nation directly. (FT)

Farmers to plant the largest corn crop since 1984. (Bloomberg)

Walmart will lower fat, sodium and sugar in some foods. (Bloomberg)

Douglas A. McIntyre

Filed under: 24/7 Wall St. Wire, Press Digest Tagged: AAPL, AIG, AMZN, BA, BCS, BP, CS, DIS, ESRX, GS, MMI, MS, NBR, NFLX, RBS, RJET, TM, VZ, WMT