Top 10 News Items: Microsoft Agrees to Buy Skype for $8.5B; DoJ Investigation Weighs on Goldman Shares; Alibaba's Alipay Ownership Restructuring Hits Yahoo!
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Here is a recap of the top news items from this week on Wall Street:
1. Shares of Microsoft (Nasdaq: MSFT) sold off each day this week following news the company has agreed to acquire Skype for $8.5 billion from an investor group led by Silver Lake. Analysts and traders alike are already wondering if Microsoft overpaid for Skype. Rumors on Tuesday suggested Google (Nasdaq: GOOG) was also involved in the bidding for Skype, however stopped at $4 billion.
2. Goldman Sachs (NYSE: GS) shares fell nearly 7 percent this week as speculation related to a Department of Justice investigation weighed. Intensifying this concern, Rochdale's Dick Bove downgraded the stock to Sell on Thursday.
3. Shares of Yahoo! (Nasdaq: YHOO) fell more than 11 percent to close trading amid news from the company's 10-Q that ownership of Alibaba's (which Yahoo! owns a 42% stake in) Alipay unit will be restructured and handed over to Alipay CEO Jack Ma. Fears are that while Alipay is potentially worth $5 billion, restructuring could be significantly diluted.
4. Shares of Cisco fell 5% on Thursday following Q3 results on Wednesday night. The company reported Q3 EPS of $0.42, ex-items, $0.05 better than the analyst estimate of $0.37. Revenue for the quarter came in at $10.9 billion versus the consensus estimate of $10.86 billion. On its conference call, CEO John Chambers offered guidance: sees Q4 adj-EPS of 37-39c, vs. the consensus of 41c, on sales of $10.84-$11.05 billion, which compares to the Street estimate of $11.59 billion. Sees quarterly non-GAAP gross margin of 62%.
5. Although both gold and oil moved higher from last week's close, commodities had a volatile week. This volatility was heightened late Friday as the US dollar strengthened. Stocks finished slightly lower this week: the Dow fell 43 points, the Nasdaq was down 4 and the S&P 500 was down 3 points.
6. Shares of Hypercom (NYSE: HYC) and VeriFone (NYSE: PAY) tumbled 12 percent and 7 percent on Thursday, respectively, following reports the Department of Justice has filed to stop VeriFone from buying Hypercom.
7. AIG (NYSE: AIG) filed a prospectus for 300 million shares on Wednesday: the company will sell 100 million shares while the US Treasury will sell 200 million shares. The offering was at the low end of previous offering ranges.
8. Chinese companies which recently had IPOs on an American exchange traded weak as traders are now showing concern related to a bubble in the this IPO market. Shares of Renren (Nasdaq: RENN), after jumping sharply on the first day of trading, fell 23 percent. Jiayuan.com (Nasdaq: DATE) shares fell more than 4 percent on its first day of trading, but bounced the next two days.
9. On the earnings front: Activision Blizzard (Nasdaq: ATVI), Disney (NYSE: DIS), Cisco (Nasdaq: CSCO) and NVIDIA (Nasdaq: NVDA) reported.
10. Shares of Rambus (Nasdaq: RMBS) were halted six different times on Friday following reports that a prior ruling in the company's case versus Micron (NYSE: MU) was affirmed by an Appeals court. Apparently the court raised questions on whether Rambus deserved its recent penalty. The stock initially swung sharply higher on the reports, but quickly sold off as traders dug more into the story. Here is the full Micron v. Rambus opinion.
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1. Shares of Microsoft (Nasdaq: MSFT) sold off each day this week following news the company has agreed to acquire Skype for $8.5 billion from an investor group led by Silver Lake. Analysts and traders alike are already wondering if Microsoft overpaid for Skype. Rumors on Tuesday suggested Google (Nasdaq: GOOG) was also involved in the bidding for Skype, however stopped at $4 billion.
2. Goldman Sachs (NYSE: GS) shares fell nearly 7 percent this week as speculation related to a Department of Justice investigation weighed. Intensifying this concern, Rochdale's Dick Bove downgraded the stock to Sell on Thursday.
3. Shares of Yahoo! (Nasdaq: YHOO) fell more than 11 percent to close trading amid news from the company's 10-Q that ownership of Alibaba's (which Yahoo! owns a 42% stake in) Alipay unit will be restructured and handed over to Alipay CEO Jack Ma. Fears are that while Alipay is potentially worth $5 billion, restructuring could be significantly diluted.
4. Shares of Cisco fell 5% on Thursday following Q3 results on Wednesday night. The company reported Q3 EPS of $0.42, ex-items, $0.05 better than the analyst estimate of $0.37. Revenue for the quarter came in at $10.9 billion versus the consensus estimate of $10.86 billion. On its conference call, CEO John Chambers offered guidance: sees Q4 adj-EPS of 37-39c, vs. the consensus of 41c, on sales of $10.84-$11.05 billion, which compares to the Street estimate of $11.59 billion. Sees quarterly non-GAAP gross margin of 62%.
5. Although both gold and oil moved higher from last week's close, commodities had a volatile week. This volatility was heightened late Friday as the US dollar strengthened. Stocks finished slightly lower this week: the Dow fell 43 points, the Nasdaq was down 4 and the S&P 500 was down 3 points.
6. Shares of Hypercom (NYSE: HYC) and VeriFone (NYSE: PAY) tumbled 12 percent and 7 percent on Thursday, respectively, following reports the Department of Justice has filed to stop VeriFone from buying Hypercom.
7. AIG (NYSE: AIG) filed a prospectus for 300 million shares on Wednesday: the company will sell 100 million shares while the US Treasury will sell 200 million shares. The offering was at the low end of previous offering ranges.
8. Chinese companies which recently had IPOs on an American exchange traded weak as traders are now showing concern related to a bubble in the this IPO market. Shares of Renren (Nasdaq: RENN), after jumping sharply on the first day of trading, fell 23 percent. Jiayuan.com (Nasdaq: DATE) shares fell more than 4 percent on its first day of trading, but bounced the next two days.
9. On the earnings front: Activision Blizzard (Nasdaq: ATVI), Disney (NYSE: DIS), Cisco (Nasdaq: CSCO) and NVIDIA (Nasdaq: NVDA) reported.
10. Shares of Rambus (Nasdaq: RMBS) were halted six different times on Friday following reports that a prior ruling in the company's case versus Micron (NYSE: MU) was affirmed by an Appeals court. Apparently the court raised questions on whether Rambus deserved its recent penalty. The stock initially swung sharply higher on the reports, but quickly sold off as traders dug more into the story. Here is the full Micron v. Rambus opinion.
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