5money moves ‘Dr. Doom’ is making now
Marc Faber readies for hyperinflation, dollar’s demise and civil unrest
By Jonathan Burton, MarketWatch
- 8月 20 週六 201116:24
Marc Faber：美債&現金＝垃圾，FED=邪惡組織
5money moves ‘Dr. Doom’ is making now
Marc Faber readies for hyperinflation, dollar’s demise and civil unrest
By Jonathan Burton, MarketWatch
- 8月 20 週六 201116:16
牛市熊市三步曲
牛市熊市三步曲
在投資的領域中，牛市(Bull Market)代表市場走勢持續向上、相反熊市(Bear Market)代表市場走勢持續向下的意思，在經濟的起跌循環活動過程中，牛市和熊市會交替出現，而牛市和熊市更普遍分為三個階段，即是牛市三期和熊市三期的理論。
- 8月 19 週五 201112:01
2011/08/19 News collection
紐約匯市─債券避險買盤 支撐美元走高
【美股盤後】標普重摔逾4%
【歐股盤後】跌逾4% 利空多
能源盤後─擔憂經濟減緩 原油大幅收低美元；【能源盤後】慘跌 經濟不妙
貴金屬盤後─投資人奔逃 黃金衝上1822美元；【金屬盤後】金價續登天 銅跌
克魯曼：義大利和西班牙或走出危機 但脫離歐元區的風險升高
以史為鑒 美股標普500指數將再創新低 因暴跌需要時間來治療
- 8月 19 週五 201110:24
“It’s almost like a worldwide buyers strike”
U.S. Stocks Tumble on Global Economy, European Funding Concerns
By Rita Nazareth -
Aug 19, 2011 4:47 AM GMT+0800
U.S. stocks tumbled, sending the Dow Jones Industrial Average down more than 400 points for the fourth time this month, on concern the global economy is slowing and speculation that European banks lack enough capital.
Caterpillar Inc. (CAT) and FedEx Corp. (FDX) fell at least 4.9 percent, pacing losses in stocks most-tied to the economy, as a Philadelphia-area manufacturing index sank to the lowest since 2009, jobless claims and consumer prices rose, and existing home sales slid. Bank of America Corp. (BAC) and Citigroup Inc. (C) fell more than 6 percent, following a plunge in European lenders. Hewlett- Packard Co. sank 6 percent after cutting its earnings forecast.
The Standard & Poor’s 500 Index slumped 4.5 percent to 1,140.65 at 4 p.m. in New York. All 10 groups in the S&P 500 dropped at least 1.2 percent, and only 10 stocks in the benchmark gauge advanced. The Dow fell 419.63 points, or 3.7 percent, to 10,990.58. Treasuries rallied, pushing 10-year yields to a record low. About 11.6 billion shares changed hands on U.S. exchanges as of 4:27 p.m., 44 percent more than the three-month average, according to data compiled by Bloomberg.
“It’s almost like a worldwide buyers strike,” Michael Mullaney, who helps manage $9.5 billion at Fiduciary Trust in Boston, said in a telephone interview. “There’s a general malaise on global economic activity. People continue to downgrade their expectations on growth. There’s concern about funding problems. That’s making us very nervous and we want to take risk out of portfolios at least for the immediate future.”
S&P 500’s Decline
Today’s stock rout erased more than $600 billion of U.S. market value. The S&P 500 has tumbled 16 percent from its April 29 high, matching the retreat between April 23 and July 2, 2010, previously the biggest contraction of the bull market that began in March 2009. The decline from April 29 through Aug. 8 left the S&P 500 within 29 points of entering a bear market. European shares and the Russell 2000 Index entered a bear market last week, falling at least 20 percent from their previous highs.
“The massive exodus from risk markets reflects heightened concerns with a possible recession and the accelerated loss of trust in policymakers,” Mohamed El-Erian, chief executive officer and co-chief investment officer at Pacific Investment Management Co., the world’s biggest manager of bond funds, wrote in an e-mail. “Importantly, such worries will now be compounded by concerns about technical damage to key markets. The risk is of a rapidly deteriorating negative feedback loop of weakening fundamentals, inadequate policies and bad technicals.”
‘Dangerously Close’
Global stocks tumbled today after Morgan Stanley cut its forecast for global growth this year, citing an “insufficient” policy response to Europe’s sovereign debt crisis, weakened confidence and the prospect of fiscal tightening. The bank estimates expansion of 3.9 percent, down from a previous forecast of 4.2 percent, according to a report dated today.
The U.S. and Europe are “dangerously close to recession,” Morgan Stanley analysts including Chetan Ahya said in the note. “Recent policy errors, especially Europe’s slow and insufficient response to the sovereign crisis and the drama around lifting the U.S. debt ceiling, have weighed down on financial markets and eroded business and consumer confidence.”
U.S. equities slumped after a report showed that the Federal Reserve Bank of Philadelphia’s general economic index plunged to minus 30.7 this month, the lowest since March 2009, from 3.2 in July. The August gauge exceeded the most pessimistic projection in a Bloomberg News survey in which the median estimate was 2. Readings less than zero signal contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware.
Jobless Claims
Government data also showed that more Americans than forecast filed applications for unemployment benefits last week, while the cost of living climbed in July by the most in four months. Separately, the National Association of Realtors said that sales of U.S. previously owned homes unexpectedly dropped in July, reflecting an increase in contract cancellations due to strict lending rules and low appraisals.
The Morgan Stanley Cyclical Index of companies most-tied to economic growth slumped 6.8 percent as all of its 30 stocks retreated. The Dow Jones Transportation Average of 20 stocks, also considered a proxy for the economy, tumbled 6.1 percent. A gauge of homebuilders in S&P indexes declined 6.7 percent.
Caterpillar, the world’s largest construction and mining- equipment maker, slumped 4.9 percent to $83.33. FedEx, operator of the world’s biggest cargo airline, sank 5.9 percent to $74.46. PulteGroup Inc., the largest U.S. homebuilder by revenue, decreased 11 percent to $4.16.
Banks Tumble
American banks tumbled, following losses in European financial shares, as Sweden’s financial regulator said his country’s lenders must do more to prepare for a worsening in Europe’s debt crisis. The KBW Bank Index (BKX) of 24 stocks retreated 5.6 percent. Bank of America, the largest U.S. lender by assets, sank 6 percent to $7.01. Citigroup dropped 6.3 percent to $27.98.
Banks also slumped after the Wall Street Journal reported that American regulators are intensifying scrutiny of the U.S. arms of Europe’s largest banks amid concern about the region’s debt crisis, citing people familiar with the matter.
Hewlett-Packard dropped 6 percent to $29.51 after jumping as much as 8.3 percent earlier. The world’s largest computer maker forecast fiscal fourth-quarter and full-year earnings that missed analysts’ estimates as lackluster consumer spending failed to offset corporate purchases of printers, computers and servers. Hewlett-Packard confirmed it’s considering a spinoff for its PC business and that it has agreed to buy software maker Autonomy Corp. for $10.3 billion.
Commodity Producers
Gauges of energy and raw-material producers slid at least 5.6 percent. Oil, wheat and copper led declines in commodity markets on concern that slower economic growth will weaken demand for raw materials. Gold surged to a record as investors fled stocks for the perceived safety of the metal.
Alcoa Inc. (AA), the largest U.S. aluminum producer, decreased 6.1 percent to $11.51. Exxon Mobil Corp. (XOM) fell 4.3 percent to $70.94.
Treasuries surged, pushing yields to record lows, as investors seek a refuge in the world’s safest securities on concern global growth is slowing and speculation inflation will remain subdued.
“The bond market is indicating certainty of a recession,” Chad Morganlander, a Florham Park, New Jersey-based money manager at Stifel Nicolaus & Co., which oversees more than $115 billion in client assets, said in a telephone interview. “Uncertainty regarding recession risk puts S&P 500’s earnings estimates in peril of drastic cuts, repricing stock market valuations and expectations lower.”
S&P 500 Earnings
Since the third quarter of last year, companies in the S&P 500 have earned $774.3 billion, according to data compiled by Bloomberg, pushing per-share profit to $91.44 as of yesterday from $74.97 on July 2, 2010.
Analysts have underestimated U.S. earnings for eight straight quarters, with S&P 500 companies beating forecasts by an average of 5.1 percent in the three months ended in June. At the start of the last recession, their projections for overall profit proved 8.2 percentage points too high in the third quarter of 2007, and 33.5 points too high in the fourth. That was the biggest miss ever, according to data compiled by Bloomberg.
Most U.S. stocks declined yesterday, wiping out an earlier advance, amid speculation that the Fed may not consider another economic stimulus program to avert a recession.
‘Inappropriate Policy’
Bernanke’s pledge last week to keep interest rates near zero percent until mid-2013 was “inappropriate policy at an inappropriate time,” Charles Plosser, president of the Fed Bank of Philadelphia, said yesterday in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. Dallas President Richard Fisher said the central bank shouldn’t enact policy to protect stock investors. Both officials dissented from the Fed’s Aug. 9 statement.
“It’s ugly out there,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, said in a telephone interview. His firm oversees $550 billion. “It’s a combination of concern of a potential recession and the lack of policy tools to fight it. Until people see a bottom, they are not going to buy stocks. There will be pressure on the equity market until we see a solid policy response.”
Setting the Stage
U.S. stocks may slip to new lows in the next few weeks, setting the stage for a rally of more than 20 percent in the S&P 500, Tom DeMark, the creator of indicators meant to identify turning points in markets, said in an Aug. 16 interview. The S&P 500, which closed at 1,193.89 yesterday, will probably drop below the 11-month low of 1,119.46 set on Aug. 8 before surging above 1,363.61, its peak on April 29, according to DeMark.
U.S. and European options gauges surged. The VIX, as the Chicago Board Options Exchange Volatility Index is known, jumped 35 percent to 42.67. The VStoxx Index (V2X), which measures the cost of protecting against declines in the Euro Stoxx 50 Index, snapped a five-day losing streak. It climbed 35 percent, the most since May 2010, to 47.17. Volatility gauges in Hong Kong, South Korea, Japan and India also rose.
The selloff in U.S. stocks may be close to ending with valuations so low they could withstand a 15 percent decline in profits, said Barton Biggs, the hedge fund manager who said this month he was selling shares. The tumble in stocks shows that investors expect a slowing economy to spur analysts to lower earnings estimates, he said.
Earnings at S&P 500 companies are forecast to climb 17 percent to $99.08 a share in 2011 and 14 percent to $112.90 in 2012, estimates compiled by Bloomberg show. The index is trading at 12.4 times profits in the last 12 months, 24 percent below its five-decade average.
“It’s very possible, in the grand scheme of things, that what we’re seeing is the classic retest of the lows of 10 days ago,” Biggs said on Bloomberg Television today. “We may be in the process of making an important bottom.”
By Rita Nazareth -
Aug 19, 2011 4:47 AM GMT+0800
U.S. stocks tumbled, sending the Dow Jones Industrial Average down more than 400 points for the fourth time this month, on concern the global economy is slowing and speculation that European banks lack enough capital.
Caterpillar Inc. (CAT) and FedEx Corp. (FDX) fell at least 4.9 percent, pacing losses in stocks most-tied to the economy, as a Philadelphia-area manufacturing index sank to the lowest since 2009, jobless claims and consumer prices rose, and existing home sales slid. Bank of America Corp. (BAC) and Citigroup Inc. (C) fell more than 6 percent, following a plunge in European lenders. Hewlett- Packard Co. sank 6 percent after cutting its earnings forecast.
The Standard & Poor’s 500 Index slumped 4.5 percent to 1,140.65 at 4 p.m. in New York. All 10 groups in the S&P 500 dropped at least 1.2 percent, and only 10 stocks in the benchmark gauge advanced. The Dow fell 419.63 points, or 3.7 percent, to 10,990.58. Treasuries rallied, pushing 10-year yields to a record low. About 11.6 billion shares changed hands on U.S. exchanges as of 4:27 p.m., 44 percent more than the three-month average, according to data compiled by Bloomberg.
“It’s almost like a worldwide buyers strike,” Michael Mullaney, who helps manage $9.5 billion at Fiduciary Trust in Boston, said in a telephone interview. “There’s a general malaise on global economic activity. People continue to downgrade their expectations on growth. There’s concern about funding problems. That’s making us very nervous and we want to take risk out of portfolios at least for the immediate future.”
S&P 500’s Decline
Today’s stock rout erased more than $600 billion of U.S. market value. The S&P 500 has tumbled 16 percent from its April 29 high, matching the retreat between April 23 and July 2, 2010, previously the biggest contraction of the bull market that began in March 2009. The decline from April 29 through Aug. 8 left the S&P 500 within 29 points of entering a bear market. European shares and the Russell 2000 Index entered a bear market last week, falling at least 20 percent from their previous highs.
“The massive exodus from risk markets reflects heightened concerns with a possible recession and the accelerated loss of trust in policymakers,” Mohamed El-Erian, chief executive officer and co-chief investment officer at Pacific Investment Management Co., the world’s biggest manager of bond funds, wrote in an e-mail. “Importantly, such worries will now be compounded by concerns about technical damage to key markets. The risk is of a rapidly deteriorating negative feedback loop of weakening fundamentals, inadequate policies and bad technicals.”
‘Dangerously Close’
Global stocks tumbled today after Morgan Stanley cut its forecast for global growth this year, citing an “insufficient” policy response to Europe’s sovereign debt crisis, weakened confidence and the prospect of fiscal tightening. The bank estimates expansion of 3.9 percent, down from a previous forecast of 4.2 percent, according to a report dated today.
The U.S. and Europe are “dangerously close to recession,” Morgan Stanley analysts including Chetan Ahya said in the note. “Recent policy errors, especially Europe’s slow and insufficient response to the sovereign crisis and the drama around lifting the U.S. debt ceiling, have weighed down on financial markets and eroded business and consumer confidence.”
U.S. equities slumped after a report showed that the Federal Reserve Bank of Philadelphia’s general economic index plunged to minus 30.7 this month, the lowest since March 2009, from 3.2 in July. The August gauge exceeded the most pessimistic projection in a Bloomberg News survey in which the median estimate was 2. Readings less than zero signal contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware.
Jobless Claims
Government data also showed that more Americans than forecast filed applications for unemployment benefits last week, while the cost of living climbed in July by the most in four months. Separately, the National Association of Realtors said that sales of U.S. previously owned homes unexpectedly dropped in July, reflecting an increase in contract cancellations due to strict lending rules and low appraisals.
The Morgan Stanley Cyclical Index of companies most-tied to economic growth slumped 6.8 percent as all of its 30 stocks retreated. The Dow Jones Transportation Average of 20 stocks, also considered a proxy for the economy, tumbled 6.1 percent. A gauge of homebuilders in S&P indexes declined 6.7 percent.
Caterpillar, the world’s largest construction and mining- equipment maker, slumped 4.9 percent to $83.33. FedEx, operator of the world’s biggest cargo airline, sank 5.9 percent to $74.46. PulteGroup Inc., the largest U.S. homebuilder by revenue, decreased 11 percent to $4.16.
Banks Tumble
American banks tumbled, following losses in European financial shares, as Sweden’s financial regulator said his country’s lenders must do more to prepare for a worsening in Europe’s debt crisis. The KBW Bank Index (BKX) of 24 stocks retreated 5.6 percent. Bank of America, the largest U.S. lender by assets, sank 6 percent to $7.01. Citigroup dropped 6.3 percent to $27.98.
Banks also slumped after the Wall Street Journal reported that American regulators are intensifying scrutiny of the U.S. arms of Europe’s largest banks amid concern about the region’s debt crisis, citing people familiar with the matter.
Hewlett-Packard dropped 6 percent to $29.51 after jumping as much as 8.3 percent earlier. The world’s largest computer maker forecast fiscal fourth-quarter and full-year earnings that missed analysts’ estimates as lackluster consumer spending failed to offset corporate purchases of printers, computers and servers. Hewlett-Packard confirmed it’s considering a spinoff for its PC business and that it has agreed to buy software maker Autonomy Corp. for $10.3 billion.
Commodity Producers
Gauges of energy and raw-material producers slid at least 5.6 percent. Oil, wheat and copper led declines in commodity markets on concern that slower economic growth will weaken demand for raw materials. Gold surged to a record as investors fled stocks for the perceived safety of the metal.
Alcoa Inc. (AA), the largest U.S. aluminum producer, decreased 6.1 percent to $11.51. Exxon Mobil Corp. (XOM) fell 4.3 percent to $70.94.
Treasuries surged, pushing yields to record lows, as investors seek a refuge in the world’s safest securities on concern global growth is slowing and speculation inflation will remain subdued.
“The bond market is indicating certainty of a recession,” Chad Morganlander, a Florham Park, New Jersey-based money manager at Stifel Nicolaus & Co., which oversees more than $115 billion in client assets, said in a telephone interview. “Uncertainty regarding recession risk puts S&P 500’s earnings estimates in peril of drastic cuts, repricing stock market valuations and expectations lower.”
S&P 500 Earnings
Since the third quarter of last year, companies in the S&P 500 have earned $774.3 billion, according to data compiled by Bloomberg, pushing per-share profit to $91.44 as of yesterday from $74.97 on July 2, 2010.
Analysts have underestimated U.S. earnings for eight straight quarters, with S&P 500 companies beating forecasts by an average of 5.1 percent in the three months ended in June. At the start of the last recession, their projections for overall profit proved 8.2 percentage points too high in the third quarter of 2007, and 33.5 points too high in the fourth. That was the biggest miss ever, according to data compiled by Bloomberg.
Most U.S. stocks declined yesterday, wiping out an earlier advance, amid speculation that the Fed may not consider another economic stimulus program to avert a recession.
‘Inappropriate Policy’
Bernanke’s pledge last week to keep interest rates near zero percent until mid-2013 was “inappropriate policy at an inappropriate time,” Charles Plosser, president of the Fed Bank of Philadelphia, said yesterday in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. Dallas President Richard Fisher said the central bank shouldn’t enact policy to protect stock investors. Both officials dissented from the Fed’s Aug. 9 statement.
“It’s ugly out there,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, said in a telephone interview. His firm oversees $550 billion. “It’s a combination of concern of a potential recession and the lack of policy tools to fight it. Until people see a bottom, they are not going to buy stocks. There will be pressure on the equity market until we see a solid policy response.”
Setting the Stage
U.S. stocks may slip to new lows in the next few weeks, setting the stage for a rally of more than 20 percent in the S&P 500, Tom DeMark, the creator of indicators meant to identify turning points in markets, said in an Aug. 16 interview. The S&P 500, which closed at 1,193.89 yesterday, will probably drop below the 11-month low of 1,119.46 set on Aug. 8 before surging above 1,363.61, its peak on April 29, according to DeMark.
U.S. and European options gauges surged. The VIX, as the Chicago Board Options Exchange Volatility Index is known, jumped 35 percent to 42.67. The VStoxx Index (V2X), which measures the cost of protecting against declines in the Euro Stoxx 50 Index, snapped a five-day losing streak. It climbed 35 percent, the most since May 2010, to 47.17. Volatility gauges in Hong Kong, South Korea, Japan and India also rose.
The selloff in U.S. stocks may be close to ending with valuations so low they could withstand a 15 percent decline in profits, said Barton Biggs, the hedge fund manager who said this month he was selling shares. The tumble in stocks shows that investors expect a slowing economy to spur analysts to lower earnings estimates, he said.
Earnings at S&P 500 companies are forecast to climb 17 percent to $99.08 a share in 2011 and 14 percent to $112.90 in 2012, estimates compiled by Bloomberg show. The index is trading at 12.4 times profits in the last 12 months, 24 percent below its five-decade average.
“It’s very possible, in the grand scheme of things, that what we’re seeing is the classic retest of the lows of 10 days ago,” Biggs said on Bloomberg Television today. “We may be in the process of making an important bottom.”
- 8月 18 週四 201123:55
Morgan Stanley Cuts Global Growth Forecast
- 8月 18 週四 201109:47
After the crash
US stockmarket crashes and GDP
After the crash
Aug 16th 2011, 14:59 by The Economist online
Does a big one-day drop in the stockmarket presage recession?
- 8月 18 週四 201109:11
Wells Fargo analysts: Gold bubble will burst (富國銀警告：黃金泡沫將破滅)
Wells Fargo analysts: Gold bubble will burst
Gold prices, now driving toward their 11th straight year of annual gains after climbing 26 percent thus far this year, are set to crash and burn, a financial services company is warning.
According to analysts with Wells Fargo & Company, the precious metal is prepped to suddenly lose value, Bloomberg reports. Having seen other commodities' bubbles burst, the firm wrote the report out of consideration for gold enthusiasts, the lead analyst told the news service.
Google to Buy Motorola Mobility for $12.5 Billion to Gain Wireless Patents
By Brian Womack and Zachary Tracer -
Aug 16, 2011 4:58 AM GMT+0800
Google Inc. (GOOG), the biggest maker of smartphone software, agreed to buy Motorola Mobility Holdings Inc. for $12.5 billion in its largest acquisition, gaining mobile patents and expanding in the hardware business.
Motorola shareholders will get $40 a share in cash, the companies said in a statement today. That’s 63 percent more than Motorola Mobility’s closing price on the New York Stock Exchange on Aug. 12. Both boards have approved the takeover.
Larry Page, the Google co-founder who took over as chief executive officer in April, is pushing the Web company into smartphones to take on Apple Inc. (AAPL)’s iPhone and gain more clout for its Android software in the wireless business. Motorola Mobility, under pressure from activist investor Carl Icahn to shift strategy, gives Google more than 17,000 patents it can leverage in negotiations with competitors such as Apple.
“This is the next step in building their position in the mobile world so they can distribute Google products and services through mobile phones and tablets,” said Clayton Moran, an analyst at Benchmark Co. in Boca Raton, Florida, who recommends Google shares. “They want a success with the Android platform, and this will enhance their position in the mobile marketplace, as well as defend their position through the patent portfolio.”
Apple, which makes its own wireless software and hardware, briefly became the most valuable company in the world last week, buoyed by demand for the iPhone and the iPad tablet computer.
Motorola Mobility, based in Libertyville, Illinois, rose $13.65, or 56 percent, to $38.12 at 4 p.m. on the New York Stock Exchange. Google, based in Mountain View, California, fell $6.54, or 1.2 percent, to $557.23 on the Nasdaq Stock Market.
‘Heck of a Premium’
Google is paying a premium of 73 percent compared with Motorola Mobility’s 20-day trading average price before today. The average premium of more than 360 deals in the wireless- equipment industry on that basis was 32 percent in the past five years, according to Bloomberg data.
“This is a heck of a premium,” said Lee Simpson, an analyst at Jefferies International in London. Motorola Mobility’s patents are “a good counterweight if Apple comes after Google.”
InterDigital Inc., an owner of about 1,300 mobile-phone patents that is considering a sale, fell $10.76, or 14 percent, to $64.96. Apple and Google were among companies considering possible bids for InterDigital, a person with knowledge of the situation said last month.
Breakup Agreement
Google agreed to pay Motorola Mobility $2.5 billion if the deal falls through, a person familiar with the matter said. Motorola Mobility would pay $375 million if it decided not to sell to Google, the person said. Jennifer Erickson, a spokeswoman for Motorola Mobility, declined to comment on the breakup fee, as did Aaron Zamost, a spokesman at Google.
Google has $39.1 billion in cash and equivalents, according to a regulatory filing last month.
The acquisition -- the largest wireless-equipment deal in at least a decade, according to data compiled by Bloomberg -- makes Google a competitor to the other handset makers that make Android devices. In addition to Motorola Mobility phones, the software runs handsets made by companies such as Samsung Electronics Co. and HTC Corp. (2498)
“Google making an acquisition of one distinct player is going to put Samsung and HTC back on their heels and thinking, ‘Do we need to go forward with this platform?’” Simpson said. “‘Are there other platforms we can use?’ It might start to put Microsoft into focus as an alternative platform,” he said, referring to Microsoft Corp. (MSFT)’s Windows Phone software.
Partner Support
T-Mobile USA Inc. introduced the first phone powered by Google’s Android software, made by HTC, in October 2008. Android, which Google offers for free, will remain available to other manufacturers, the company said. Winston Yung, chief financial officer of HTC, gave his support to the deal, saying it will strengthen “the whole Android ecosystem.”
Google said Samsung and Android-phone manufacturers Sony Ericsson Mobile Communications AB and LG Electronics Inc. (066570) also support the transaction.
Microsoft rose 41 cents, or 1.6 percent, to $25.51. Nokia Oyj (NOK1V), which plans to start making Windows phones, climbed 9.1 percent to 4.09 euros in Helsinki.
‘Protect Android’
Android was the best-selling smartphone operating system in the second quarter as sales rose more than fourfold to 43.3 percent of the market, led by Samsung and HTC, according to research firm Gartner Inc. Apple had an 18.2 percent share, the researcher said. While Motorola Mobility’s Droid phones have found a following in the U.S., globally the company ranks outside the top players in the smartphone market.
“The combination of the two companies is going to create tremendous shareholder value, drive great user experiences and accelerate innovation,” Page said today on a conference call. “Motorola also has a strong patent portfolio, which will help protect Android from anticompetitive threats from Microsoft, Apple and other companies.”
A group led by Apple and Microsoft won an auction of patents owned by Nortel Networks Corp. in June after bidding up the price to $4.5 billion, beating out Google. Apple and Microsoft have sued Android device makers over the use of intellectual property, disputes that are wending their way through the courts.
Patent Contest
In a blog posting Aug. 3, Google accused Apple, Microsoft and Oracle Corp. of using patents to wage a “hostile, organized campaign” against Android.
“There is an intellectual property arms race between Apple, Google and Microsoft,” said Kevin Smithen, a telecommunications analyst at Macquarie Securities Group in New York.
Google had a total of 754 patents assigned to it as of last week, according to the U.S. Patent and Trademark Office database, not including patents Google bought last month from International Business Machines Corp. Apple received 563 new patents just last year, the agency said.
In addition, the acquisition of Motorola Mobility, which also makes television set-top boxes, may help Google increase adoption of its Google TV service and the use of Android and its Chrome browser on devices that connect televisions to the Internet, Ken Sena, an analyst at Evercore Partners in New York, wrote in a report today. Sena rates Google shares “overweight.”
Mobile Pioneer
The deal marks the end of independence for a company that helped pioneer mobile phones and introduced its first consumer handset in the early 1980s.
Motorola announced a plan to spin off its mobile-phone business in March 2008 amid market share losses and pressure from billionaire Icahn. The company completed the split in January, after the global recession delayed the deal. Motorola Inc. became Motorola Solutions Inc., which makes radio equipment for emergency workers and scanning devices for retailers.
Last month, Icahn urged Motorola Mobility to explore alternatives for its patent portfolio after Nortel’s patent sale, the largest-ever patent auction.
“This is a great outcome for all shareholders of Motorola Mobility, especially in light of today’s markets,” Icahn said today in a statement. “We applaud management and the board for acting so responsibly.”
Since the January spinoff, Motorola Mobility shares had lost about a fifth of their value before today as the company struggled to return to profitability and keep pace with larger rivals such as Samsung and Apple.
Qatalyst Partners and Centerview Partners LLC advised Motorola, and Wachtell, Lipton, Rosen & Katz LLP provided legal help. Lazard Ltd. advised Google, while Cleary Gottlieb Steen & Hamilton LLP was the legal counsel.
Regulatory Scrutiny
The Google acquisition is likely to attract the attention of regulators, said Mark Mahaney, an analyst at Citigroup Global Markets, who rates Google a “hold.” The company, which owns the world’s most popular search engine, is already under review by the U.S. Federal Trade Commission over its business practices.
“Regulatory scrutiny will likely be material,” Mahaney said in a report today. It’s “very hard to see this deal closing by year-end,” he wrote.
Still, the scrutiny may be tempered by the fact that Google doesn’t currently make handsets, and that Apple and Microsoft have already gained approval for the purchase of Nortel’s patents, said Macquarie’s Smithen.
“We’re quite confident that this will be approved,” said David Drummond, Google’s chief legal officer, on a conference call.
To contact the reporter on this story: Brian Womack in San Francisco at Bwomack1@bloomberg.net; Zachary Tracer in New York at ztracer1@bloomberg.net
By Brian Womack and Zachary Tracer -
Aug 16, 2011 4:58 AM GMT+0800
Google Inc. (GOOG), the biggest maker of smartphone software, agreed to buy Motorola Mobility Holdings Inc. for $12.5 billion in its largest acquisition, gaining mobile patents and expanding in the hardware business.
Motorola shareholders will get $40 a share in cash, the companies said in a statement today. That’s 63 percent more than Motorola Mobility’s closing price on the New York Stock Exchange on Aug. 12. Both boards have approved the takeover.
Larry Page, the Google co-founder who took over as chief executive officer in April, is pushing the Web company into smartphones to take on Apple Inc. (AAPL)’s iPhone and gain more clout for its Android software in the wireless business. Motorola Mobility, under pressure from activist investor Carl Icahn to shift strategy, gives Google more than 17,000 patents it can leverage in negotiations with competitors such as Apple.
“This is the next step in building their position in the mobile world so they can distribute Google products and services through mobile phones and tablets,” said Clayton Moran, an analyst at Benchmark Co. in Boca Raton, Florida, who recommends Google shares. “They want a success with the Android platform, and this will enhance their position in the mobile marketplace, as well as defend their position through the patent portfolio.”
Apple, which makes its own wireless software and hardware, briefly became the most valuable company in the world last week, buoyed by demand for the iPhone and the iPad tablet computer.
Motorola Mobility, based in Libertyville, Illinois, rose $13.65, or 56 percent, to $38.12 at 4 p.m. on the New York Stock Exchange. Google, based in Mountain View, California, fell $6.54, or 1.2 percent, to $557.23 on the Nasdaq Stock Market.
‘Heck of a Premium’
Google is paying a premium of 73 percent compared with Motorola Mobility’s 20-day trading average price before today. The average premium of more than 360 deals in the wireless- equipment industry on that basis was 32 percent in the past five years, according to Bloomberg data.
“This is a heck of a premium,” said Lee Simpson, an analyst at Jefferies International in London. Motorola Mobility’s patents are “a good counterweight if Apple comes after Google.”
InterDigital Inc., an owner of about 1,300 mobile-phone patents that is considering a sale, fell $10.76, or 14 percent, to $64.96. Apple and Google were among companies considering possible bids for InterDigital, a person with knowledge of the situation said last month.
Breakup Agreement
Google agreed to pay Motorola Mobility $2.5 billion if the deal falls through, a person familiar with the matter said. Motorola Mobility would pay $375 million if it decided not to sell to Google, the person said. Jennifer Erickson, a spokeswoman for Motorola Mobility, declined to comment on the breakup fee, as did Aaron Zamost, a spokesman at Google.
Google has $39.1 billion in cash and equivalents, according to a regulatory filing last month.
The acquisition -- the largest wireless-equipment deal in at least a decade, according to data compiled by Bloomberg -- makes Google a competitor to the other handset makers that make Android devices. In addition to Motorola Mobility phones, the software runs handsets made by companies such as Samsung Electronics Co. and HTC Corp. (2498)
“Google making an acquisition of one distinct player is going to put Samsung and HTC back on their heels and thinking, ‘Do we need to go forward with this platform?’” Simpson said. “‘Are there other platforms we can use?’ It might start to put Microsoft into focus as an alternative platform,” he said, referring to Microsoft Corp. (MSFT)’s Windows Phone software.
Partner Support
T-Mobile USA Inc. introduced the first phone powered by Google’s Android software, made by HTC, in October 2008. Android, which Google offers for free, will remain available to other manufacturers, the company said. Winston Yung, chief financial officer of HTC, gave his support to the deal, saying it will strengthen “the whole Android ecosystem.”
Google said Samsung and Android-phone manufacturers Sony Ericsson Mobile Communications AB and LG Electronics Inc. (066570) also support the transaction.
Microsoft rose 41 cents, or 1.6 percent, to $25.51. Nokia Oyj (NOK1V), which plans to start making Windows phones, climbed 9.1 percent to 4.09 euros in Helsinki.
‘Protect Android’
Android was the best-selling smartphone operating system in the second quarter as sales rose more than fourfold to 43.3 percent of the market, led by Samsung and HTC, according to research firm Gartner Inc. Apple had an 18.2 percent share, the researcher said. While Motorola Mobility’s Droid phones have found a following in the U.S., globally the company ranks outside the top players in the smartphone market.
“The combination of the two companies is going to create tremendous shareholder value, drive great user experiences and accelerate innovation,” Page said today on a conference call. “Motorola also has a strong patent portfolio, which will help protect Android from anticompetitive threats from Microsoft, Apple and other companies.”
A group led by Apple and Microsoft won an auction of patents owned by Nortel Networks Corp. in June after bidding up the price to $4.5 billion, beating out Google. Apple and Microsoft have sued Android device makers over the use of intellectual property, disputes that are wending their way through the courts.
Patent Contest
In a blog posting Aug. 3, Google accused Apple, Microsoft and Oracle Corp. of using patents to wage a “hostile, organized campaign” against Android.
“There is an intellectual property arms race between Apple, Google and Microsoft,” said Kevin Smithen, a telecommunications analyst at Macquarie Securities Group in New York.
Google had a total of 754 patents assigned to it as of last week, according to the U.S. Patent and Trademark Office database, not including patents Google bought last month from International Business Machines Corp. Apple received 563 new patents just last year, the agency said.
In addition, the acquisition of Motorola Mobility, which also makes television set-top boxes, may help Google increase adoption of its Google TV service and the use of Android and its Chrome browser on devices that connect televisions to the Internet, Ken Sena, an analyst at Evercore Partners in New York, wrote in a report today. Sena rates Google shares “overweight.”
Mobile Pioneer
The deal marks the end of independence for a company that helped pioneer mobile phones and introduced its first consumer handset in the early 1980s.
Motorola announced a plan to spin off its mobile-phone business in March 2008 amid market share losses and pressure from billionaire Icahn. The company completed the split in January, after the global recession delayed the deal. Motorola Inc. became Motorola Solutions Inc., which makes radio equipment for emergency workers and scanning devices for retailers.
Last month, Icahn urged Motorola Mobility to explore alternatives for its patent portfolio after Nortel’s patent sale, the largest-ever patent auction.
“This is a great outcome for all shareholders of Motorola Mobility, especially in light of today’s markets,” Icahn said today in a statement. “We applaud management and the board for acting so responsibly.”
Since the January spinoff, Motorola Mobility shares had lost about a fifth of their value before today as the company struggled to return to profitability and keep pace with larger rivals such as Samsung and Apple.
Qatalyst Partners and Centerview Partners LLC advised Motorola, and Wachtell, Lipton, Rosen & Katz LLP provided legal help. Lazard Ltd. advised Google, while Cleary Gottlieb Steen & Hamilton LLP was the legal counsel.
Regulatory Scrutiny
The Google acquisition is likely to attract the attention of regulators, said Mark Mahaney, an analyst at Citigroup Global Markets, who rates Google a “hold.” The company, which owns the world’s most popular search engine, is already under review by the U.S. Federal Trade Commission over its business practices.
“Regulatory scrutiny will likely be material,” Mahaney said in a report today. It’s “very hard to see this deal closing by year-end,” he wrote.
Still, the scrutiny may be tempered by the fact that Google doesn’t currently make handsets, and that Apple and Microsoft have already gained approval for the purchase of Nortel’s patents, said Macquarie’s Smithen.
“We’re quite confident that this will be approved,” said David Drummond, Google’s chief legal officer, on a conference call.
To contact the reporter on this story: Brian Womack in San Francisco at Bwomack1@bloomberg.net; Zachary Tracer in New York at ztracer1@bloomberg.net
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European, U.S. Index Futures Drop, Euro Slides
European, U.S. Index Futures Drop, Euro Slides
By Shiyin Chen -
Aug 16, 2011 2:40 PM GMT+0800
The euro slid from a three-week high versus the dollar and European equity-index futures fell before data forecast to show economic growth for the region slowed. Asian stocks rose as Google Inc. (GOOG)’s largest acquisition boosted technology companies.
By Shiyin Chen -
Aug 16, 2011 2:40 PM GMT+0800
The euro slid from a three-week high versus the dollar and European equity-index futures fell before data forecast to show economic growth for the region slowed. Asian stocks rose as Google Inc. (GOOG)’s largest acquisition boosted technology companies.
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