EU concerns push the euro to close to a two-year low. (Reuters)

Goldman Sachs (NYSE: GS) will invest $40 billion into alternative energy in the next decade. (Reuters)

TV networks battle with Dish Network (NASDAQ: DISH) over a DVR that can skip ads. (Reuters)

Apple (NASDAQ: AAPL) CEO Tim Cook gives up $75 million in dividends on his stock holdings. (Reuters)

Warren Buffett’s Berkshire Hathaway (NYSE: BRK-B) may buy more newspapers. (Reuters)

Goldman Sachs and Morgan Stanley (NYSE: MS) loan shares to short sellers who want to hedge Facebook’s stock. (WSJ)

U.S. bank lending falls in the first quarter, a possible sign of economic slowing. (WSJ)

Toyota (NYSE: TM) will push further into emerging markets. (WSJ)

Comcast’s (NASDAQ: CMCSA) NBCUniversal division may buyout Microsoft’s (NASDAQ: MSFT) part ownership in MSNBC.com. (WSJ)

Japanese power companies invest in U.S. shale gas to help replace nuclear power. (WSJ)

Yahoo! (NASDAQ: YHOO) releases an Internet browser call Axis, which will compete with Google’s (NASDAQ: GOOG) product. (WSJ)

Spain is concerned about a run on its banks. (NYT)

Large European institutional funds begin to sell euro assets. (FT)

Italian Prime Minister Mario Monti says most leaders in the region back regionwide bonds. (Bloomberg)

Douglas A. McIntyre

Costco Sales

Costco (NASDAQ: COST) continues its extraordinary run as the most successful big-box retailer. Its club membership system has bettered the more traditional store operations of Walmart (NYSE: WMT) and Target (NYSE: TGT). Net sales for the quarter that ended May 6 increased 8% from last year to $21.85 billion. Net sales for the first 36 weeks increased 10% to $65.54 billion. Same-store sales were up 5% for the most recent quarter. Costco’s shares trade at $83.50, up from a 52-week low of $70.22. Costco’s revenue per employee was $569,488, compared to $206,117 for Walmart.

Best IPOs

A quick review of the 25 largest U.S. IPOs ever shows how badly Facebook has done in early trading. Most of the companies on the list have tremendous revenue, traditional business plans that they have been able to freshen, and large profits. Among these are Visa (NYSE: V), UPS (NYSE: UPS), General Motors (NYSE: GM), MetLife (NYSE: MET) and Prudential Financial (NYSE: PRU). The thing that stands out most about the list is how few tech companies it has. Google (NASDAQ: GOOG) is on the list, of course. But most of the companies are financial ones or firms that are manufacturing based. (Data from CapitalIQ.)

Facebook Investigation

The debate over whether some large investors were warned about a revenue downgrade of Facebook (NASDAQ: FB) continues. Several media have carried stories about Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS) passing on numbers that showed lowered forecasts for earnings and revenue in the second quarter and the full year. The attorney general of Massachusetts has begun an investigation into whether information was selectively disclosed. Morgan Stanley insists that it was in compliance with all the regulations that set rules for IPO behavior. Even if Morgan Stanley makes its case successfully, the news likely will keep individual investors out of the market. Many of these investors have turned to mutual funds, exchange traded funds and fixed income paper to protect their interests. That behavior has been reinforced by the Facebook IPO.

Douglas A. McIntyre

The attorney general of Massachusetts has begun an investigation into whether information was “selectively disclosed”. Morgan Stanley insists that it was in compliance with all the regulations that set rules for IPO behavior. Even if Morgan makes its case successfully, the news is likely to keep individual investors out of the market. Many of these investors have turned to mutual funds, ETFs, and fixed income paper to protect their interests. That behavior has been reinforced by the Facebook IPO

Douglas A. McIntyre

An even more interesting analysis by Reuters blogger Felix Salmon, who explains how Morgan Stanley might actually have made a pile of money by propping up FB’s share price last Friday. Salmon argues that the greenshoe shares were the equivalent of a big short:

Chances are, no one outside the company will ever know for sure what Morgan Stanley’s P&L on the Facebook IPO ends up looking like. But it would make sense, if Morgan Stanley saw a lot of selling pressure on Friday, for the bank to keep [holding] onto at least a little bit of its short position into Monday morning. At which point it could make a tidy profit on that plunging share price.

Facebook’s IPO — the gift that keeps on giving.

Paul Ausick

A class-action suit on behalf of shareholders was filed in Manhattan this morning, the financial industry’s own watchdog, the Financial Industry Regulatory Authority (FINRA) is launching an investigation into the way banks communicated a cut in FB’s estimates, and shares in Morgan Stanely (NYSE: MS), FB’s lead underwriter, are down more than -2%. And short-sellers are chasing shares today too, as we noted earlier this morning. All before lunch.

Facebook is responding by testing a new design for its Timeline feature. Lawsuits and falling share prices are somebody else’s problems. At Facebook, there’s no time for such trivial matters.

Facebook has traded about 38 million shares this morning and shortly before noon the price is up 1.8% at $31.60.

Paul Ausick

Facebook IPO Mess

The Facebook (NASDAQ: FB) IPO mess has worsened considerably in just 24 hours. The federal government will examine why analysts at Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) lowered their financial forecasts for the social network just ahead of the IPO. The concern is that favored clients knew about the changes, but the broader investment world did not. Nasdaq claims that if it had known how badly its technical glitches would be, it would have suspended the IPO until there was full confidence shares could trade smoothly. There are also rumors that Facebook’s CFO David Ebersman decided at the last minute to increase the number of shares that would be offered by 25% without enough conversation with his entire team of bankers. Ebersman discussed his plans with lead underwriter Morgan Stanley. But the decision caught many large investors by surprise and caused them to wonder whether the market had enough of an appetite for all of the new shares. Based on how Facebook has traded since the IPO, the answer is no.

Fiat and Mazda

Fiat and Mazda will build a small convertible together. Fiat is the controlling shareholder of Chrysler. The deal is an example of how large car companies that face slow sales in Europe and slowing sales in China have started to band together to save costs. General Motors (NYSE: GM) and Peugeot plan to jointly operate production facilities in Europe. GM’s Opel division is bleeding money in the region. Peugeot is one of the most financially troubled European car companies. GM also has made in investment in Peugeot. And trouble is probably what binds Fiat and Mazda together. Fiat’s sales in Europe have collapsed. Mazda sales run well behind Japanese rivals Toyota (NYSE: TM), Honda (NYSE: HMC) and Nissan. Nissan already has a close alliance with Renault. Fiat and Mazda do not have the capacity to easily develop many new models on their own.

Getty Images for Sale

Private equity firm Hellman & Friedman, which owns Getty Images, has begun the process to sell the company it bought for $2.4 billion in 2008. It reckons using investment banks Goldman Sachs and JP Morgan (NYSE: JPM), it can get $4 billion. Getty has one of the world’s great inventories of photos, some of them artistic icons taken by photographers years ago. The company gets a ready stream of licensing revenue for use of its inventory. The Financial Times points out that there have already been a number of deals in the sector. That by itself may hurt interest and bring down the price that outside investors would pay.

Douglas A. McIntyre

The OECD expresses concerns that Europe could slip into a deep recession. (Reuters)

The EU debt crisis pushes global shares lower. (Reuters)

Morgan Stanley (NYSE: MS) cuts its Facebook (NASDAQ: FB) ratings just before the IPO. (Reuters)

Sony (NYSE: SNE) and Samsung try to get retailers to discount their TVs less. (WSJ)

AOL’s (NYSE: AOL) Patch local website project continues to draw the ire of investors. (WSJ)

The Congressional Budget Office says that gridlock in DC could cause a recession in 2013. (WSJ)

SAP (NYSE: SAP) will buy Ariba (NASDAQ: ARBA) for $4.3 billion. (WSJ)

South Korea will continue to import oil from Iran despite U.S. and EU sanctions over the Iran weapon’s program. (WSJ)

The International Monetary Fund says the UK needs to create stimulus programs. (WSJ)

Dell’s (NASDAQ: DELL) earnings are hurt as it attempts to move beyond PCs as its major line of sales. (WSJ)

Ford’s (NYSE: F) credit rating is upgraded from “junk” status. (WSJ)

CalSTRS, the second-largest U.S. public pension fund, will vote against Walmart (NYSE: WMT) directors in the wake of a bribery scandal. (FT)

EU banks would be damaged if Greece leaves the eurozone, as they have almost $1.2 trillion in debt from Spain, Portugal, Italy and Ireland. (FT)

Mazda and Fiat to build a sports car. (Bloomberg)

Douglas A. McIntyre

The NASDAQ claims that if it had known how badly its technical glitches would be, it would have suspended the IPO until there was full confidence shares could trade smoothly.

There are also rumors that Facebook’s CFO David Ebersman decided at the last minute to increase the number of shares that would be offered by 25% without enough conversation with his entire team of bankers. Ebersman  discussed his plans with lead underwriter Morgan Stanley. But, the decision caught many large investors by surprise and caused them to wonder whether the market had enough of an appetite for all of the news shares. Based on how Facebook has traded since the IPO, the answer is “no”

Douglas A. McIntyre

According to a report at Business Insider:

But, just as important, news of the estimate cut was passed on only to a handful of big investor clients, not everyone else who was considering an investment in Facebook.

That’s a big no-no because such information is “material” according to the SEC and selectively disseminating news about a company implies insider trading.

The SEC, along with ahandful of other government agencies, have begun investigating the Facebook IPO. As the days pass, more goodies land on their plates.

Shares are down about -2.5% just before noon, at $33.34.

Paul Ausick

The Nasdaq OMX Group Inc. (NASDAQ: NDAQ) gets the nod from some for the exchange’s inability to handle the volume of trades when the stock first began trading. Lead underwriter Morgan Stanley (NYSE: MS) gets its share of harsh words too. Even General Motors Co. (NYSE: GM) gets in line for some blame after cancelling its Facebook advertising deal. And non-stop coverage of the IPO surely could have given one the impression that this was the deal of the century.

But if you bought the stock, the real bad guy is looking back at you from your mirror. We tried to warn you.

Facebook’s shares are down about -6% at $32.01 after 20 minutes of trading this morning.

Paul Ausick