Wall Street Breakfast: Must-Know News 

March 19, 2012  | includes: AAPL, BATS, CVX, ESRX, GLD, JBII.PK, JMBA, LDK, MHS, QQQ, RIG, SBUX,SPY, UPS, USO, XOM

 

TNT delivers itself to UPS for $6.8B. UPS (UPS) has finally clinched a deal to buy TNT Express after sweetening its offer to €5.16B ($6.8B), or €9.50 a share, up from an original bid of €9. The acquisition price represents a 54% premium over TNT's close of €6.18 on Feb. 16, the day before the talks were made public.

Investors hope to reap the fruits of Apple's cash mountain. Apple (AAPL) is due to hold a conference call this morning to discuss what to do with its massive cash balance, which probably exceeds $100B at this point. Remarks from CEO Tim Cook about how Apple is discussing uses for its money, as well as other hints, has led to fervent speculation that a dividend and/or buyback will soon be announced.

Taxpayers make $25B profit on mortgage bonds. The Treasury is expected to announce today that taxpayers made a $25B profit on mortgage debt the government bought during the financial crisis. That would be the Treasury's largest profit from any program tied to the crisis, and, according to officials, demonstrates that the government is able to unwind a rescue program without destabilizing markets.

States could stall Express Scripts' $29.1B buy of Medco. Over 25 states are investigating Express Scripts' (ESRX) proposed $29.1B acquisition of Medco (MHS) for possible antitrust violations, Bloomberg reports. Five of the states, including New York and California, are considering lawsuits to challenge the deal should the FTC approve it.

LDK issues Q4 warning. LDK Solar (LDK) has lowered the top end of its Q4 revenue guidance, forecasting sales of $440M-450M vs. $440M-520M previously. As a result of the rapidly declining market price for wafers and modules during Q4, LDK expects inventory write-downs and impairment charges on contractual purchase agreements, and therefore that its gross margin will be negative.

Newspapers no closer to solving ad-revenue problems. A new study from Pew Research starkly shows how the media continues to struggle to cope with the Internet era, with print ad revenue among news groups declining by around $2.1B in 2011 and online income rising by just $207M. A major problem for newspapers is competition from the likes of Google, Facebook, Apple and Amazon.

Starbucks looks to out-juice Jamba. Starbucks (SBUX) is opening its first juice bar today, in upscale Bellevue, Washington. In going up against the likes of Jamba (JMBA), Starbucks hopes that its new line of Evolution Fresh shops will boost its position in the $50B health-food sector. The juice bar business is fragmented and highly competitive, and analysts say the Evolution Fresh shops could have lower margins than Starbucks' coffee shops.

Kurdistan denies that Exxon has stopped work in the region.Confusion reigns as to whether Exxon Mobil (XOM) has bowed to Iraqi pressure and stopped its work in Kurdistan. Iraq said on Friday that Exxon has suspended operations there, while the autonomous region said over the weekend that Exxon has done no such thing. The company seems to have so far kept quiet.

Brazil to indict Chevron execs. Brazilian prosecutors expect to file criminal charges against 17 Chevron (CVX) and Transocean (RIG) executives this week in connection with last November's offshore oil spill. Meanwhile, industry regulator ANP has approved Chevron's request to suspend output at the 61,500 bpd Frade field after another leak was spotted. The company's problems in Brazil could lead it to reassess its strategy in Latin America.

ExactTarget due to list in busy week for IPOs. Five companies are due to hold IPOs this week, led by marketing software provider ExactTarget, which aims to raise up to $144M on the NYSE. BATS (BATS), the U.S.'s third-largest stock exchange firm by volume, wants to attract $113M, while online retailer Vipshop hopes to overcome any skepticism about Chinese companies listing in the U.S.

New Jersey is least-corruptible state. It may have a reputation for skullduggery by officials and public figures, but New Jersey is the least-corruptible state in the U.S., a new study from the Center for Public Integrity shows. For muni investors considering where not to put their cash, Georgia came last on the integrity list.

Greece continues to stretch credulity. Greece is "more than halfway along the path to economic recovery," PM Lucas Papademos has told theFinancial Times in an interview, and daily anti-austerity protests notwithstanding, a "large, silent majority" of Greeks are willing to do whatever it takes to stay in the eurozone.

How recycling can help make up for loss of Iranian oil. Start-up JBI (JBII.PK) wants recycling to go mainstream and here's why: The company takes plastic waste, of which only 7% is recycled every year in the U.S., and converts it into highly-refined, industrial-quality oil. Amid heightened geopolitical tensions and triple-digit crude prices, the company is producing oil for around $10 a barrel and selling it for about $100 a barrel, but is struggling to gain traction with oil buyers because of the stigma attached to "green fuel." 

Feedback or story tip? Please direct message WSB editor Yigal Grayeff »