FINANCE December 7, 2011 | 5:07 PM
The European Central Bank is lending money to banks at the highest rate since March, signaling tight funding at the market level. Lending has spiked to $11.59 billion, worrying traders who have not experienced such an increase since Irish banks needed central bank funding.
The price to borrow from the ECB is 2%, a figure much higher than the 0.74% paid for marketplace funding. When limited credit availability forces banks to use central banks, their costs add pressure on already vulnerable banks. One trader explained to the Financial Times that for every 40 large banks seeking funding, there is only one large corporate bank willing to lend.Read more »
FINANCE December 1, 2011 | 11:34 AM
American Airlines’ parent company, AMR Corp., has filed for Chapter 11 bankruptcy protection after a unanimous vote by its board members.
Worldwide, the airline industry has lost more than $20 billion in the past 10 years. American Airlines, founded in 1934, was once the world’s largest carrier, but is now the third largest in the US.Read more »
FINANCE November 30, 2011 | 9:31 AM
Facebook is preparing an initial public offering in the second quarter of 2012, according to the latest reports. The public offering is expected to raise $10 billion, with the company setting its sights on a $100 billion total for the deal, sources close to the matter told the Wall Street Journal.
Such a deal would eclipse other recent IPOs in the social media sector, such as those from LinkedIn, Pandora or Groupon, and would be twice the valuation of IT company Hewlett-Packard.Read more »
FINANCE November 29, 2011 | 9:35 AM
Microsoft has signed an agreement to acquire VideoSurf, a specialist in internet video search technology. The California-based company provides services that allow users to search through high quantities of movies and television shows and other forms of video content.
No financial details were revealed, though leading tech blog TechCrunch reported the deal was worth almost $100 million. Microsoft first plans to introduce the technology to its Xbox Live service to allow users to filter through the various types of video content on its gaming network.Read more »
FINANCE November 28, 2011 | 11:50 AM
Global investment firm KKR & Co. LP has agreed to purchase private exploration and production company Samson Investment Co. in a deal worth $7.2 billion. KKR will proceed with the buy in conjunction with Japanese trader Itochu Corp. and investment outfits Crestview Partners and Natural Gas Partners.
Oklahoma-based Samson has been in operation for four decades and holds over 10,000 wells, 40% of which are in the US. Wells held by Samson in the Gulf of Mexico and the Gulf Coast are excluded from the agreement. The company’s wells cover areas in shale formations holding liquid hydrocarbons including oil.Read more »
FINANCE November 22, 2011 | 12:18 PM
Virgin Money Holdings has purchased Northern Rock PLC for £747 million ($1.2 million), and statements confirmed that the British government will receive an additional £50 million within six months.
If the bank is listed on the stock exchange, it will also receive a further £230 million.Read more »
FINANCE November 21, 2011 | 12:23 PM
Consumer review website Angie’s List Inc. jumped 25% after selling almost 9 million shares, raising nearly $115 million in its stock market launch. The Initial Public Offering price estimates the company’s value at over $900 million.
Angie’s List had aimed to sell less than 6.5 million shares, leaving 2.5 million to be sold by shareholders. BV Capital planned to take its 12% stake in the company down to under 9.5%, while Battery Ventures planned to cut its interest in the company from 18% to 15%.Read more »
FINANCE November 18, 2011 | 10:47 AM
The world’s largest retailer, Wal-Mart saw its profits drop slightly in the third fiscal quarter, with net income of $3.3 billion, or 2.9% less than third quarter last year. However, net sales increased by $8.3 billion over 2010.
In the US, sales for Wal-Mart stores increased by 1.3% while Sam’s Club stores increased by 9%. Internationally, Wal-Mart sales increased over 20% with the highest rates of growth in Mexico and Argentina. International sales were also helped by acquisitions in Great Britain and South Africa, which totaled $2.1 billion.Read more »
FINANCE November 17, 2011 | 9:14 AM
Selling the majority of its shares in China Construction Bank (CCB) saw Bank of America turn a profit while signaling falling confidence in Chinese banks.
Bank of America earned close to $2 billion after-tax profit from its CCB stake sale. The deal follows the $8.3-billion sale of its stake in CCB in August. Goldman Sachs offloaded a $1 billion stake in the Industrial and Commercial Bank of China in November.Read more »
FINANCE November 14, 2011 | 10:18 AM
The Internal Revenue Service in the US is formally requesting information from Credit Suisse and other Swiss banks on American customers suspected of tax evasion. The IRS suspects over the course of the past few years that billions of dollars in tax money have not been paid because it was transferred to Swiss bank accounts.
In a written statement, Credit Suisse said: "In connection with the IRS Treaty Request, the SFTA [Swiss Federal Tax Administration] has issued an order directing Credit Suisse AG to submit responsive account information to the SFTA."Read more »
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