Tesla slips as it announces a $2 billion stock offering just 15 days after Elon Musk said it wouldn't rai.. - Business Insider

Shares of Tesla fell as much as 7% in early trading Thursday after the automaker announced that it plans to offer $2 billion of common stock.

Tesla intends to use the net proceeds from the new offering to „further strengthen its balance sheet, as well as for general corporate purposes,“ the company said in a press release. In the offering, CEO Elon Musk will purchase up to $10 million of common stock and Larry Ellison, a Tesla board member and long-time investor, will buy as much as $1 million.

The common stock offering comes just 15 days after Musk said on Tesla’s fourth-quarter earnings call that the company would not raise further capital.

„We’re spending money, I think, efficiently and we’re not artificially limiting our progress. And then despite all that, we are still generating positive cash,“ Musk said.

He continued: „So in light of that, it doesn’t make sense to raise money because we expect to generate cash despite this growth level.“

Releasing new common stock can have a negative effect on share price and potentially damage the sentiment of original investors. When a company offers more stock to raise capital, as Tesla has, it means that future earnings per share could take a hit. This is because any earnings brought in by the company have to be spread among a greater number of shares.

In addition, having more common stock dilutes the ownership of investors who held stakes in the company prior to the offering, which might not sit well with Tesla’s original investors.

To convince investors that the additional offering is worth it, Tesla has to have a solid plan for the extra capital and explain how it will generate future earnings for the company and shareholders.

Tesla has been on a torrid rally that’s sent shares up as much as 250% from October 2019, when the company announced a surprise return to profitability in the third quarter, through the stock’s all-time high close on February 4.

Tesla stock has gained roughly 83% year-to-date through Wednesday’s close.

Foto: sourceMarkets Insider

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2020-02-13 14:19:16Z
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McClatchy, nation's second-largest newspaper company, files for bankruptcy | TheHill - The Hill

McClatchy Co., the second-largest newspaper company in the U.S., announced on Thursday that it has filed for Chapter 11 bankruptcy protection.

The 163-year-old company, which owns prominent local newspapers including the Miami Herald, the Kansas City Star and Sacramento Bee and 24 other publications in 14 states, said its Chapter 11 plan eliminates 60 percent of its debt while helping the company pivot to "a digital future."

"The Chapter 11 filing will allow McClatchy to restructure its debts and, it hopes, shed much of its pension obligations. Under a plan outlined in its filing to a federal bankruptcy court, about 60 percent of its debt would be eliminated as the news organization tries to reposition for a digital future," the bankruptcy announcement reads.

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McClatchy had begun suspending some pension payments to former executives in January, opting to apply to the Pension Benefit Guaranty Corporation to assume control of its pension plan.

If a bankruptcy court accepts the Chapter 11 plan, the company would likely be led by hedge fund Chatham Asset Management LLC. McClatchy, a publicly traded company, would become a private company as a result.

“McClatchy’s plan provides a resolution to legacy debt and pension obligations while maximizing outcomes for customers and other stakeholders,” said Craig Forman, president and CEO. “When local media suffers in the face of industry challenges, communities suffer, polarization grows, civic connections fray and borrowing costs rise for local governments. We are moving forward with speed and focus to benefit all our stakeholders and our communities.”

Last year, New York Times Executive Editor Dean Baquet made the ominous prediction that "most local newspapers are going to die in the next five years."

"The greatest crisis in American journalism is the death of local news," Baquet said at the International News Media Association World Congress in New York City. "I don't know what the answer is.

"Their economic model is gone. I think most local newspapers in America are going to die in the next five years, except for the ones that have been bought by a local billionaire," Baquet continued.

"I think that everybody who cares about news — myself included, and all of you — should take this on as an issue," he added. "Because we’re going to wake up one day and there are going to be entire states with no journalism or with little tiny pockets of journalism."

The local newspaper industry has been plagued by layoffs in the digital era , with several struggling publications sold to hedge fund-led entities in recent years.

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2020-02-13 13:42:29Z
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Tesla stock slammed as company announces plan to issue up to $2 billion in new shares - MarketWatch

Tesla Inc. shares TSLA, -0.92% slid 5.8% in premarket trades Thursday, after the electric-car maker said it is planning to offer about $2 billion of common stock in an underwritten deal. The company said Chief Executive Elon Musk will participate in the offering by purchasing up to $10 million in new shares. Board member Larry Ellison will also participate by buying up to $1 million in stock. Proceeds of the deal are slated to be used to bolster the company's balance sheet and for general corporate purposes. Goldman Sachs and Morgan Stanley are underwriting the deal and have a 30-day option to acquire another $300 million in stock. Shares have gained 149% in the last 12 months, while the S&P 500 SPX, +0.65% has gained 23%. Read all of MarketWatch's recent coverage of Tesla and CEO Elon Musk.

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2020-02-13 12:52:00Z
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PepsiCo reports solid quarterly earnings, issues mixed outlook - Yahoo Finance

PepsiCo (PEP) gave investors a good number of things to digest on its earnings day Thursday. Another solid quarter of demand for many of its food and beverages around the world, but a mixed outlook that may be below some aggressive targets held by the Wall Street community.

• Total revenue: $20.6 billion vs. estimates for $20.25 billion

• Operating income: $2.7 billion vs. estimates for $2.73 billion

• Diluted EPS: $1.45 vs. estimates for $1.44

• Organic sales growth: +4.3% vs. estimates for increase of 3.7%

• Core EPS guidance 2020: $5.88 vs. estimates for $5.95

• Other: Company announced a 7% dividend increase

The beverage and snacks giant notched organic volume gains across all segments except for Latin America. Core operating profits — which excludes the impact of currency fluctuations and is a measure watched closely by analysts — fell in four out of seven segments. The language in PepsiCo’s earnings release suggests profits were held back by “certain operating cost increases” that perhaps offset strong work by executives to cut costs. PepsiCo also invested more aggressively in advertising, specifically in the North America beverage business to combat Coke’s strength in Diet Coke.

PepsiCo shares rose slightly in pre-market trading.

FILE - In this July 9, 2015, file photo, Pepsi bottles are on display at a supermarket in Haverhill, Mass. PepsiCo reports financial results on Monday, April 18, 2016. (AP Photo/Elise Amendola, File)

All in, a decent quarter for PepsiCo. What remains to be seen is how investors will balance that with a mixed outlook. PepsiCo guided to 2020 organic sales growth of 4%, below a long-running annual target of 4% to 4.5%. Core EPS guidance of $5.88 was short of some sell-side estimates. PepsiCo management does have a history of guiding conservatively, however, another factor investors must weigh right now.

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Watch The First Trade each day here at 9:00 a.m. ET or on Verizon FIOS channel 604. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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2020-02-13 11:23:00Z
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Barclays CEO Jes Staley under investigation over links with Jeffrey Epstein - CNN

"The relationship between Mr Staley and Mr Epstein was the subject of an enquiry from the Financial Conduct Authority to which the Company responded," Barclays said. "The FCA ... subsequently commenced an investigation, which is ongoing, into Mr Staley's characterization to the company of his relationship with Mr Epstein and the subsequent description of that relationship in the company's response to the FCA."

The focus of the investigation is whether that relationship was properly disclosed to the bank and regulators.

The FCA and another UK regulator, the Bank of England's Prudential Regulation Authority, confirmed in a statement that they are investigating the Barclays CEO. They provided no further detail.

Shares in the bank were trading 3% lower in London on Thursday morning.

Staley has been running Barclays since late 2015. Prior to that he worked for more than 30 years at JPMorgan (JPM), where he served as head of its investment banking division. JPMorgan declined to comment.

In its statement, Barclays said Staley had developed a professional relationship earlier in his career with Epstein, who died in jail last year while awaiting trial on sex trafficking charges. The bank said Staley had told the board that he had had no contact with Epstein since becoming Barclays CEO in December 2015.

"Based on a review, conducted with the support of external counsel, of the information available to us and representations made by Mr Staley, the board ... believes that Mr Staley has been sufficiently transparent with the company as regards the nature and extent of his relationship with Mr Epstein. Accordingly, Mr Staley retains the full confidence of the board, and is being unanimously recommended for re-election at the Annual General Meeting."

A Wall Street veteran, Staley has remained committed to growing investment banking at Barclays, even as European peers scale back in this area in favor of wealth management.

But some shareholders have criticized his bid to compete with the likes of Goldman Sachs (GS), Morgan Stanley (MSPRA) and his former employer, which has delivered disappointing returns.

Staley is not the first high profile individual to face scrutiny over his relationship with Epstein.

Britain's Prince Andrew stepped back from public life, and his charities have been shunned by businesses, since details of his close association with the late financier emerged. One of Epstein's accusers, Virginia Roberts Giuffre, has alleged in court filings that she was forced into sexual encounters with the prince while underage. Prince Andrew has denied the allegations.

— Julia Horowitz contributed to this article.

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2020-02-13 09:40:00Z
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Credit Suisse posts a 69% jump in annual net profit despite spying scandal - CNBC

Tidjane Thiam, chief executive officer of Credit Suisse, speaks during an earnings news conference in Zurich, Switzerland, on April 24, 2019.

Stefan Wermuth | Bloomberg | Getty Images

Credit Suisse beat market expectations with its latest earnings on Thursday, posting a 69% increase in annual net income despite the spying scandal that emerged during 2019.

The Swiss lender reported a net income of 3.4 billion Swiss francs ($3.48 billion) for 2019. For the final quarter of the year, the Swiss bank posted a net income of 852 million Swiss francs.

Analysts had estimated a net income of 838.5 million Swiss francs for the fourth quarter and 3.2 billion Swiss francs for the year.

Here are some other highlights for the year:

• Net revenues reached 22.4 billion Swiss francs, vs 20.9 billion Swiss francs in 2018.
• Operating expenses rose 1% from 2018 to 17.4 billions Swiss francs.
• Return on tangible equity hit 9% in 2019, vs 5% in 2018.
• Its CET1 ratio stood at 12.7%, vs 12.6% at the end of 2018.

"We have started the year strongly across all of our divisions, and as a result, are cautiously optimistic about the prospects for the year ahead," the bank said in a statement.

Credit Suisse also said it wants to grow its revenues in wealth management in 2020, increase profitability further and keep "cost discipline."

The bank is proposing a cash dividend of 0.2776 Swiss francs per share for the financial year of 2019. Credit Suisse shares are up by 12% over the past year.

Thiam's farewell

The Swiss bank surprised investors last week when announcing that CEO Tidjane Thiam is leaving the top position, effective from Friday. His resignation came after a drawn-out spying scandal at the bank.

A former Credit Suisse executive, Iqbal Khan, was followed by private contractors in a bid to establish whether he was poaching colleagues and clients to join him at UBS.

An internal investigation by law firm Homburger said there was "zero evidence" that Thiam had been involved in the surveillance scheme. Nonetheless, this probe led to the exit of Pierre-Oliver, the bank's chief operating officer, and raised questions as to how Thiam was unaware of the surveillance on Khan. Swiss regulator FINMA is still investigating the incident.

Reports suggest there's a power struggle between the bank's chairman, Urs Rohner, and Thiam. Whereas shareholders seem to have supported the work of Thiam as CEO, Credit Suisse's board voted unanimously to keep Rohner.

Speaking to CNBC last week, Vontobel Senior Analyst Andreas Venditti said the announcement would likely help to "calm things down" but went "totally against" the "very explicit support statements" from shareholders.

Thomas Gottstein, who's been leading the Swiss unit of Credit Suisse, will take over as CEO. Thiam said in a statement Thursday. "I am proud of what Credit Suisse has achieved during my tenure. We have turned Credit Suisse around, and our 2019 results show we can be sustainably profitable."

He later spoke on why he resigned at a press conference: "We discussed it with the board, if the board decides there should be a change in leadership, it's my duty to make it happen."

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2020-02-13 06:04:00Z
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A stock and a hard place: SoftBank's $150 billion Alibaba warchest in spotlight - Reuters

TOKYO (Reuters) - SoftBank (9984.T) CEO Masayoshi Son threw cold water on Wednesday on the idea of cutting his firm’s $150 billion stake in e-commerce giant Alibaba (BABA.N), after prominent activist investor Elliott Management called for big buybacks.

FILE PHOTO: Japan's SoftBank Group Corp Chief Executive Masayoshi Son attends a news conference in Tokyo, Japan, November 5, 2018. REUTERS/Kim Kyung-Hoon/File Photo

The emergence of New York-based Elliott as a SoftBank shareholder has renewed focus on the company’s 26% stake in China’s Alibaba, the Japanese firm’s biggest asset and Son’s most successful tech bet to date.

Elliott, one of the world’s best known activist investors, has amassed a holding of almost $3 billion in SoftBank. It is now pushing for changes, including $20 billion in stock buybacks, sources have said. But Son indicated that he is in no rush to sell down the Alibaba shares - raising questions about how SoftBank could fund any potential buybacks.

“I believe Alibaba has lots of room to grow. I’m in no hurry to sell shares,” he told a news conference on Wednesday.

SoftBank is already highly leveraged and struggling to attract outside money to a second tech fund. Son’s reluctance to sell down the holding in Alibaba leaves little scope for buybacks on the scale Elliott wants, analysts said.

“From a shareholder perspective you should sell it and invest in the things that are going to generate returns,” said Kirk Boodry, an analyst at Redex Holdings who writes on research platform Smartkarma.

If SoftBank thinks its returns cannot outperform Alibaba, “it seems weird to be in the venture capital business,” he said.

SoftBank did little to dispel investor concerns about its strategy on Wednesday, reporting that quarterly profit was virtually wiped out by a second straight quarter of losses at the $100 billion Vision Fund.

“These results validate our concerns that most other things that (SoftBank) does outside of Alibaba have led to distractions or value destruction,” Jefferies analyst Atul Goyal wrote in a note.

The stake in the e-commerce giant is worth around $150 billion - more than the market capitalization of SoftBank itself, which is $110 billion.

Son’s group has few other such assets it could use. Others include a two-thirds ownership in Japanese wireless unit SoftBank Corp (9434.T), although SoftBank Group is reliant on dividends from the telecom unit for cash flow.

The unit has pledged to pay out 85% of its net income as dividends.

SoftBank Group had 3.8 trillion yen ($35 billion) in cash and cash equivalents on its books at the end of December.

However, use of that is constrained by SoftBank’s own financial policy - in an effort to reassure investors - including a pledge to maintain enough cash to cover bond redemptions for at least two years.

SoftBank’s weighted average cost of debt is among the highest of all companies on Japan’s Nikkei 225 Stock Average .N255, according to Refinitiv data.

Son did sell down part of the Alibaba stake ahead of the 2016 acquisition of chip designer Arm, using a derivative transaction to capture upside from the subsequent rise in Alibaba’s share price - a move that was a surprise at the time and could well augur further surprises.

Slideshow (2 Images)

While Son said on Wednesday he was aligned with Elliott’s concerns, he made it clear any changes would be on his own terms.

“I’m SoftBank’s biggest shareholder so I care about the stock price and also want to raise corporate value,” he said.

“However the method should be left to us, the management.”

Reporting by Sam Nussey; Editing by David Dolan and Susan Fenton

Our Standards:The Thomson Reuters Trust Principles.

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2020-02-12 15:13:00Z
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