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Thursday
May232013

Global Stocks Plunge After Japan Selloff

Hemera Technologies/Thinkstock(NEW YORK) -- Wall Street may be in for a wild ride Thursday after a sharp retreat for stocks in Japan. U.S. stock futures dropped after the Nikkei index in Tokyo plunged 7.3 percent overnight, its worst one-day loss in more than two years.

Global stock markets are in retreat, hammered by a one-two punch.

The first blow was struck when U.S. markets turned from gains to losses after the release of minutes from the Federal Reserve. The minutes showed that a number of officials were ready to taper off the aggressive policy of quantitative easing, with the monthly purchase of $85 billion in government bonds. The Fed’s recent moves had helped push up stock prices.

The second shoe to drop came from China. The HSBC Purchasing Managers Index fell this month, adding to signs of a fragile economic recovery for the world’s second-largest economy is losing steam.

HSBC economist Hongbin Qu in a statement said, “The cooling manufacturing activities in May reflected slower domestic demand and ongoing external headwinds.”

China’s economic growth slowed unexpectedly in the first quarter and forecasters have cut their growth outlook for the year.

Copyright 2013 ABC News Radio

Monday
Jan142013

Apple Stock Closes Near $500

SeongJoon Cho/Bloomberg via Getty Images(NEW YORK) -- Shares of Apple Inc. (Nasdaq: AAPL) closed at $501.75 in New York trading Monday, falling 3.57 percent after reports that the tech company has decreased its orders for parts, but analysts will wait until its earnings next week to learn whether fewer people have ordered the iPhone 5 than expected.

Apple’s orders for iPhone 5 screens for the first quarter have dropped to around half of what the company planned previously, the Wall Street Journal reported. Japan’s Nikkei newspaper reported two Apple LCD panel suppliers in Asia reduced production.

The tech-heavy exchange, Nasdaq, closed down 0.26 percent to 3,117.50.

Brian Colello, a senior equity analyst, said there is a chance the report about the orders has more to do with supply chain issues and less to do with iPhone 5 demand.

“Screens were believed to be an area of shortages a couple months ago,” Colello said, shortly after the iPhone 5 release in September. “When that happens, customers tend to double order to make sure they have enough screens on hands. That leads to double orders and cancellations once supply and demand tend to balance out.”

Morningstar’s fair value of Apple stock is $770, and it has a “buy” rating, the highest of the financial firm’s five-rating scale.

Colello said all eyes will be on the company’s first-quarter earnings report on Jan. 23.

Copyright 2013 ABC News Radio

Tuesday
Jan012013

Stocks to Watch in 2013

Comstock/Thinkstock(NEW YORK) -- It's that time of year, when we all want to know what stocks we should be buying in the coming year, or thinking about buying, or steering very, very clear of. So here are seven of the biggest stocks worth keeping your eyes on.

1. Google: Not surprisingly, the top stock pick on almost every analyst's list is—you guessed it—Google. "It's a great company," Paul Larson, chief equity strategist at Morningstar, in Chicago, IL, told ABC News. "Not only do they have the best search algorithm, but they also benefit from a network effect with their ad platform. The more users on the platform, consumer and business, the better the platform becomes. They also have a rapid growth in other businesses, such as You Tube. It's just a fantastic business."

2. Kraft: Never mind that it split from its global snack business earlier this year; it still has large competitive advantages. Its portfolio includes: Kraft, Oscar Mayer, and Maxwell House, each of which generate more than $1 billion in annual sales. That doesn't include another 20-odd brands that produce more than $100 million in sales each year, and "substantial economies of scale in the North American market, with more than $19 billion in annual sales," Morningstar senior analyst Erin Lash said. "We think the market is overlooking the substantial cash flows that Kraft's grocery business generates--which we forecast at 10% of sales on average--and income investors likely will find Kraft appetizing as the firm's top priority for cash is to fund a highly competitive dividend."

3. Amazon: The Seattle, Washington-based corporation has been operating at a competitive advantage for a while. Makes sense: The company has a very strong brand name; it's one of the first places people go when they want to shop online. Plus, "They have a cost advantage from their robust distribution in that they can get time to customers cheaper than their competitors can," said Larson.

4. Yahoo: With a new CEO at the helm and a recent acquisition, all eyes have been looking to Yahoo to see what it does. "It's a dark horse that has been beaten up, but we see a lot of potential in it," said Larson.

5. Apple: With the demise of Steve Jobs, it's safe to say that Apple doesn't have the same panache it once did. But that doesn't mean it's not one of the most successful companies out there. "We think Apple continues to represent one of the best investments in technology," said Rob Cihra, tech analyst at Evercore Partners, in New York. "Apple is effectively creating its own growth by creating unique and beautiful products that consumers really want to buy, staying ahead of mostly me-too competition. They're the ones pioneering every new direction, and while there's a lot of competition, the competition seems to be following Apple's lead while Apple is consistently out front."

6. Facebook: Despite its troubles after its initial public offering, "Facebook is a fantastic business," said Larson. "They have very high profit margins, very high returns on capital. They have a billion users worldwide and half are using it on a daily basis." And, he adds, the platform has a network effect: That is, you use it because your friends do, and they use it because that's where you are.

7. IBM: At 101 years old, IBM has long been in a leadership position. And over the last ten to fifteen years the company has done an "excellent job of transforming themselves from a hardware company into really high value software and services company, to the point that it's the only game in town for a lot of what it does," said Cihra. "They are typically the best at what they do."

Copyright 2013 ABC News Radio

Friday
May182012

Former Facebook Employees: Company Celebrates New Ideas, Not New Wealth

Facebook(NEW YORK) -- Facebook’s stock market debut seems to be creating a frenzy everywhere but at Facebook.

Shares closed at $38.23 after fluctuating between $40 and $42 for most of the day.  Gizmodo reported shares were trading at a record-breaking 2.7 million per second within the first 30 seconds of trading.

But after founder and CEO Mark Zuckerberg, Facebook COO Sheryl Sandberg and a throng of cheering employees rang the Nasdaq opening bell from the company headquarters in Menlo Park, Calif., at 9:30 a.m. ET Friday, the campus became a ghost town.

Nightline anchor Bill Weir talked with Justin Mitchell, a Facebook engineer, and Donna Gutman, who worked in Facebook’s user operations, in New York City’s Times Square shortly after trading began. Both said they had been with the company for more than four years but had recently quit, taking stock options with them.

On Thursday night, Facebook priced its initial public offering  at $38 a share, selling $16 billion worth in equity and valuing the company at $104 billion. It’s the largest tech IPO of all time.

All Facebook employees are stock holders, Mitchell told Weir. So why isn’t he out buying a Ferrari?

“It’s not the company culture to go out and celebrate this type of stuff,” Mitchell said. “The culture of the company is very much of not showing off money, not being ostentatious but instead, really just making good products, and that comes from the top.”

One of the big questions is, now that Facebook has gone public, will it have to tailor user experience to meet shareholders’ expectations. But Mitchell said he thought Facebook’s IPO filing would have little effect on how it does business.

“My hunch is that it’s not going to change the company culture that much,” he said. “Once we filed for the IPO people put up signs that said, ‘Stay focused, Keep shipping.’ I think it’s that type of mentality that you’ll see continue on in the future.”

Thursday night, Facebook celebrated its newfound wealth with a wild bash at company headquarters that only Facebook could throw -- a “Hackathon,” an all-night, a code-writing “rager,” where Facebook employees worked on their own special projects until the morning light. They do one every couple of months, according to the company’s blog. Those projects are what Facebook deems important, Gutman said.

“I think that the company needs to keep doing what its doing and the work people did last night shows that’s what people are focused on,” Gutman said.

Copyright 2012 ABC News Radio

Friday
Apr062012

Does Coca-Cola Owe Family $130M in Stock?

James G. Welgos/Archive Photos/Getty Images(NEW YORK) -- Relatives of a man who died battling with the Coca-Cola Co. over a stock certificate that would award him a $130 million stake in the beverage maker plans to finish his fight and “see it through,” their attorney told ABC News Friday.

In 2008, Tony Marohn of Indio, Calif., a manual laborer and self-proclaimed treasure hunter, purchased a box of papers at an estate sale.

“It was definitely $5 or less,” Chris Morosoff, who represents Marohn’s estate, said of the box. “This is what he did. … One find was a big deal to him.”

Morosoff said that inside the box Marohn found a Palmer Union Oil Co. stock certificate signed by someone named John Wagner. The line assigning the certificate to someone was blank, so Marohn added his signature.

“It was like a blank check,” Morosoff said. “When Tony bought the box, he bought this stock certificate. Whoever holds it, whoever puts their name on it, owns it.”

After some research, Marohn discovered that Coca-Cola was the oil company’s successor, so he contacted the company in 2009.

Morosoff, however, said the company turned down Marohn’s request for stock only after realizing just how much he was seeking -- 1.8 million shares of common stock for his 1,625 oil shares.

When Marohn died of a heart problem in 2010, his family took the reins.

“Somebody had to step into his shoes,” Morosoff said Friday. “This consumed a huge portion of his time.”

The case was put on hold in February, but Morosoff said that a conference with a judge in Delaware, where Coca-Cola is incorporated, was planned for Monday.

Morosoff said the family -- especially Marohn’s daughter, Jamie Marohn, the estate’s executor, and her mother -- believed the stock was valid and planned to continue with the litigation.

“It’s not so much about the money,” he said. “For my client, for Jamie and her mom, it’s about her dad. This was a big deal for her dad before he passed away.  She’s going to finish the fight for her dad.”

Copyright 2012 ABC News Radio

Monday
Mar192012

Apple Announces Dividend, Buyback

Kevork Djansezian/Getty Images(CUPERTINO, Calif.) -- In a major turn away from the years when Steve Jobs was in charge, Apple Inc. is finally loosening up its purse strings, announcing both a $10 billion stock buyback plan and a dividend for shareholders.

Apple’s announcement Monday morning was a cautious one, and widely expected by investors. The quarterly dividend of $2.65 a share is equal to a yield of 1.8 percent based on the current stock value. The payout by the world’s most valuable company is less than the dividend awarded by Microsoft, Hewlett-Packard and several other big tech companies.

Because of soaring sales of iPads and iPhones even with this announcement, Apple’s $100 billion horde of cash is likely to keep on growing in the future.

“A quarterly dividend will provide current income for shareholders and we also believe it will broaden Apple’s investor base by attracting new investors who don’t currently own Apple stock,” Apple CEO Tim Cook said.

video platform video management video solutions video player

The divided opens up ownership of Apple shares to a wider range of mutual funds. Many value-oriented products are not allowed to buy stocks that don’t pay dividends.

For years, Steve Jobs resisted calls to pay dividends. He used to say that the money was better used to give Apple maneuvering room, for instance by giving it the ability to buy other companies.

Cook and CFO Peter Oppenheimer reassured analysts and reporters that they have more than enough cash to grow their business.

During a conference call Cook said he doesn’t see a “ceiling for opportunities” and that “innovation is the most important objective at Apple and we will not lose sight of that.”

He added that “these decisions will not close any doors for us.”

Oppenheimer pointed out that Apple has plenty of domestic cash to go ahead with the dividend and buyback plan. When asked how Apple will be using its large overseas cash holdings, he said Apple’s position is that U.S. tax law “provides a considerable economic disincentive to U.S. companies that might otherwise repatriate cash.” In other words, Apple does not want to pay the tax.

Apple stock rose 1 percent in trading Monday morning.

Copyright 2012 ABC News Radio

Friday
Feb032012

Woman Accused of Selling Fake Facebook Stock

Peter Foley/Bloomberg via Getty Images(OSHKOSH, Wis.) -- A woman in Wisconsin is accused of selling fake Facebook stock the same day the company went public.

Marianne Oleson, 46, of Oshkosh, Wis., is being charged with 33 felony counts of fraud, theft and forgery as well as a misdemeanor drug paraphernalia possession.

Randy Stafford, a contractor who worked on Oleson's Winnebago County house, filed a criminal complaint stating Oleson scammed him and four others into buying fake stock.

"She said, 'Hey, this is way bigger than Google and it's breaking all the barriers, records and investments, so I invested,'" Stafford told ABC News.

He wanted to invest to better his family and make life a little easier.

Stafford said he did contracting work on Oleson's house in exchange for what he believed would be 3,000 shares of stock, which would come out to around $100,000-worth. He said he did $18,000 of contracting work in addition to giving Oleson $10,000 in cash.

He initially heard about the business opportunity from a friend, who Stafford said is also a victim. Oleson told him that her uncle in the iron mine industry passed away, leaving her $3.5 million. She also told Stafford her daughter attended Harvard University with Mark Zuckerberg and is a doctor in California.

After Oleson showed Stafford paperwork, he passed it on to an investment firm that told him it was legitimate. All he had to do was wait for an official certificate.

Stafford started to become suspicious when Oleson would not conduct business over email, text message or phone calls, and would only speak freely in her home. She also changed the date when he would receive the certificate from six weeks to when Facebook would become public.

After the delay, he looked up public records under the name she had given him, Marianne Johnson. He did not find a Johnson, but found Oleson.

"Red flags were really flying up, and at that point that's when I went in on my own investigation," said Stafford.

Stafford talked to Gignesh Movalia, owner of Florida-based OM Investment Management, where Oleson said she got the paperwork. Movalia had heard the same story and sent Oleson paperwork, but there had never been any payment.

An attorney for Facebook in California told Stafford that Facebook could not confirm whether she owned stock or not, but it was doubtful because stock cannot be sold in the secondary market.

"I was still unbelieving," Stafford said. "I was trying everything to prove it was real."

However, after talking to the Facebook attorney, he contacted police. He said police told him they could not make an arrest because not everything connected.

"So that's when I went in to connect the dots with a wire," said Stafford. "She wouldn't do it by email, texting or phone; she seemed like a canary in her house."

Stafford said he went to the police to make sure Oleson would be off the street.

"It wasn't so much getting my money back, but getting her to stop," he said. "She would have scammed more people. I did the right thing to protect other people."

Stafford added that Oleson was good at what she was doing, that she did a lot of homework and could answer any question about the deal.

"If it's too good to be true, it probably is," he said.

The Winnebago County Sheriff's Office told ABC News it could not comment on the case because it is an ongoing investigation, but said they believe there are more victims.

Oleson's attorney did not return ABC News' request for comment.

Copyright 2012 ABC News Radio

 

Wednesday
Jul202011

Rupert Murdoch's Testimony 'Saved' News Corp Stock, Analyst Says

WILLIAM WEST/AFP/Getty Images(LONDON) -- A foam pie-slinging Parliament hearing, accusations of nepotism, speculation about a CEO shakeup and a phone hacking scandal won't sink News Corp. stock, if the market is any indication.

Rupert Murdoch's testimony to the U.K. parliament Tuesday "clearly saved the stock," wrote David Joyce, a media analyst at Miller Tabak & Co., in a statement to ABC News.

Murdoch told parliament the phone hacking probe was the "most humble day of my life."  But he also said that the scandal was not his fault -- he placed the blame on people within the company that he trusted, and the people they hired.

"We have broken our trust with our readers," Murdoch said during his morning testimony.

The patriarch of the Murdoch family ran an ad over the weekend apologizing for "serious wrongdoing."  The 80-year-old promised to take "concrete steps to resolve these issues and make amends for the damage they have caused."

Will that be enough?

"By Rupert not taking responsibility per se but offering harsh words for the activism and vigilance against any further... Also, his age showed, and a succession plan with Chase Carey possibly becoming CEO helped the stock," Joyce said.

According to media reports, there is speculation that COO Chasey Carey could take the reins from Murdoch as chief executive officer at the media company.

"People expect that this might give shareholders that are not Rupert Murdoch the ability to have some say in the company or the ability to change things or that the stock performance is going to have any say in the way Murdoch runs the company.  People are fooling themselves," said Malcolm Polley of Stewart Capital.  "Even if he gives up the CEO position, the reality is Rupert Murdoch is still going to control the destiny of News Corp."

In a turnaround, the company's stock price regained some of its value, closing at $15.94 Tuesday.

Copyright 2011 ABC News Radio

Wednesday
Apr132011

Empire State Building to Be Publicly Owned?

Jupiterimages/Thinkstotck(NEW YORK) -- People may soon be able to own a piece of New York's Empire State Building.

Citing people familiar with the plan, The New York Times reports that the family behind the 102-story art deco tower is considering starting a publicly traded real estate company that will include the skyscraper.  If approved, the proposal will allow people to purchase stock in the company, and, hence, become a part owner of the famous building.

The new company may also feature other buildings owned by the Malkin family, including some in New York City, Westchester County in New York and Connecticut, according to the Times.

Copyright 2011 ABC News Radio

Wednesday
Nov172010

General Motors Sets Public Offering of Common and Preferred Stock

Photo Courtesy -- Getty Images(DETROIT) -- General Motors announced Wednesday that they will begin a public offer of common and mandatory convertible junior preferred stock that will begin trading on November 18th.

The company will offer as much as $23.1 billion of the stocks to the public, depending on the amount taken by underwriters. 

"As we prepare to enter the equity markets, all of us at GM are excited about this historic milestone.  We are especially appreciative of those who stood by us through the toughest times, and we are dedicated to creating value for all of our stakeholders," said GM Vice Chairman and Chief Financial Officer Chris Liddell.

The issue included 478 million shares of common stock, which has been valued at $33 per share, for a total of $15.77 billion. The public offering also included 87 million shares of mandatory convertible junior preferred stock for a total of $4.35 billion.
 
The closing of both offerings is scheduled to take place on November 23rd, 2010. 

Copyright 2010 ABC News Radio







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