Take it from FireEye Inc. chief executive Dave DeWalt, whose company just raised $1.1 billion for itself and its financial backers: “The markets want to see growth.”
That’s been good news for the Milpitas, Calif.-based cybersecurity software company, which reported a 94% increase in revenue last year. A 348% rally in FireEye’s share price from its September initial public offering through Thursday’s close has given the company plenty of ammunition for its ambitious growth plans.
The market environment “created the perfect platform for us to be aggressive, both to use our stock as currency for an acquisition as well as to use our stock as currency to raise capital,” said Mr. DeWalt—also known to investors as the former chief executive to McAfee Inc., which Intel Corp. bought for $7.68 billion in 2011.
Late Thursday, FireEye and venture-capital backers sold 14 million shares for $82 each, raising about $1.1 billion before the potential sale of additional shares by underwriters. FireEye plans to use proceeds from the offering for purposes such as hiring, potential acquisitions and technology upgrades.
The deal followed FireEye’s January acquisition of computer security firm Mandiant Corp. for nearly $1 billion, mostly in stock.
Thanks to this week’s capital raise, FireEye can “be more aggressive” with plans to start selling Mandiant’s technology outside of the U.S., Mr. DeWalt said.
Demand for shares in FireEye’s offering was just the latest indicator that investors are receptive to funding companies that are growing and actually need the money. Earlier this month, Tesla Motors Inc. raised a bigger-than-expected $2 billion in a convertible-bond sale aimed at funding its battery-pack “gigafactory.”
Fund managers in a monthly investor survey by Bank of America Merrill Lynch have routinely said they’d prefer to see companies use cash for capital spending, rather than improving balance sheets or returning cash to shareholders.
Shares of FireEye declined Friday, but it remains to see how well the offering will pan out for investors. The company, which has yet to turn an annual profit, trades at a rich valuation of about 69-times sales, according to FactSet. Bulls are betting that the FireEye’s rapid revenue growth will continue for years, in which case the shares may not turn out to be so pricey in the long term.
Morgan Stanley led the stock offering with Barclays PLC, J.P. Morgan Chase & Co. and Goldman Sachs Group Inc.
The telecom giant’s CEO, Randall Stephenson, said at an investor conference Thursday that Comcast’s $45.2 billion deal to buy Time Warner Cable has shifted his view of the year ahead. In particular, it has given him a greater sense of urgency to build out AT&T’s Internet-protocol, fiber network as well as its LTE wireless broadband network in the U.S.
It’s been tricky to sort out signaling from actual intent in the maneuvering between AT&T and its likeliest European target, Vodafone. But Mr. Stephenson said the merged Comcast/Time Warner Cable will cover 80% of the households in the U.S., which means a giant competitor in AT&T’s backyard.
“It’s an industry redefining deal from our standpoint,” the CEO said.
Shut out of further significant acquisitions in the U.S., AT&T has made clear its interest in Europe, where people familiar with the matter say it is eyeing Vodafone.
On Thursday, Mr. Stephenson said the “window may be closing” on acquiring wireless assets in Europe. He cited carriers’ investments there in upgrades to faster, 4G technology.
AT&T was interested in Europe because it figured it could get in early and capitalize on a shift to data usage and higher bills that has happened already in the U.S. But that process is already under way. Meanwhile AT&T, which told U.K. authorities last month it wasn’t planning a bid for Vodafone, can’t make an offer for several months unless invited by Vodafone’s board.
“What we had always believed was going to transpire is now transpiring,” Mr. Stephenson said.
Newsweek is standing behind its bitcoin story.
The magazine on Friday released a statement saying that it “stands strongly behind” the reporter who wrote the article that fingered a California man named Dorian Prentice Satoshi Nakamoto as the likely inventor of bitcoin.
Mr. Nakamoto has denied that he’s the anonymous person responsible for the creation of the digital currency, but Newsweek maintains the “facts as reported point toward Mr. Nakamoto’s role in the founding of Bitcoin.”
Reporting for the controversial piece “was conducted under the same high editorial and ethical standards that have guided Newsweek for more than 80 years,” the statement said.
The article prompted a horde of reporters to assemble in front of Mr. Nakamoto’s house yesterday. At one point, Mr Nakamoto emerged from his house, jumped into a car with one of them, was followed by the rest as he headed into Los Angeles, and sat down for a two-hour interview with the Associated Press in which he denied being the man behind bitcoin.
Then a message appeared on an Internet message board where bitcoin’s founder had apparently appeared before. It simply said “I am not Dorian Nakamoto.”
You can read the entire statement here.
Warren Buffett didn’t grow Berkshire Hathaway Inc.’s net worth faster than gains in the S&P 500 index over the last five years, but the gigantic conglomerate recently crossed another milestone: passing the $300 billion mark in market capitalization for the first time.
Shares of Berkshire have risen nearly 3% since the company reported record full-year earnings last weekend — $19.5 billion of net profit on $182 billion of revenue. Several “strong buy” ratings followed from analysts, who generally expect another big year for Berkshire in 2014 as housing and the economy continue to strengthen.
Berkshire’s Class A shares were trading around $183,000 a share as of Friday morning, giving the Omaha, Neb.-based company a market value of $301.4 billion. The share price increase came on top of a very good year for all stocks; in 2013, the S&P 500 rose about 32%, including dividends. Berkshire shares, too, rose around 30% last year.
Berkshire is already among the top 10 largest U.S. companies by market capitalization, and in recent years, has made the top-five list often. At $300 billion, its position among America’s most-valuable companies doesn’t change much. On Friday afternoon, Apple topped the list with $475 billion; followed by Google with $409 billion, Exxon Mobil close on its heels with $405 billion; Microsoft at fourth place, and ahead of Berkshire, at $316 billion.
Despite the sharp rise in Berkshire shares, Mr. Buffett signaled clearly in his latest annual letter he thinks the stock is still cheap. The billionaire investor has said Berkshire will buy back stock if their price falls below 1.2 times book value per share, a measure of net worth. At the end of 2013, per-share book value stood at $134, 973, which means the stock is currently trading at 1.35 times book. Given how enthusiastic the market is about Berkshire, that number seems unlikely to budge downward anytime soon.
India’s Sensex index hitting a record high Friday calls to mind that old Benjamin Graham saw that the stock market is a voting machine in the short run. Indian officials announced dates this week for upcoming national elections, and investors seem to think voters will usher in the business-friendly Bharatiya Janata Party, as opinion polls also suggest.
But India’s stock market isn’t great at predicting elections. In 2004, most thought the then-BJP government would stay in power. So the Sensex plunged 11% in the month after voters threw them out and gave the Congress Party such a small majority that it had to share power with India’s Communist Party. In 2009, surprised investors bid up the Sensex 25% in the month after Congress surprisingly won a big-enough majority to dump the Communists.
Investors are this time rooting for the BJP, and may push stocks even higher if the BJP actually wins in May. Yet over time, they’ll care more for the new government’s ability to boost economic growth. As Mr. Graham said, the stock market is a weighing machine in the long run.
Most countries are casting a suspicious eye toward bitcoin and viewing cryptocurrencies as a potential threat. But one nation is taking a different approach: it’s adopted a virtual currency as its legal tender.
The Lakota Nation, a semi-autonomous North American Indian reservation in South Dakota, has named its bitcoin offshoot “Mazacoin.” Officially launched in February, its market cap of $3.3 million places it 20th among alternative currencies (there are more than 200 “alt-coins,” although most have marginal significance).
It’s a big development in the world of virtual currencies, because until now, the storyline for bitcoin alternatives has been about a small group of technophiles playing with a shiny new toy. But to the Lakota — who count among their ancestors the legendary leaders Crazy Horse and Red Cloud — the idea of a national currency represents something for which they’ve been striving for a long time: independence.
“I’ve been studying tribal sovereignty since I was 16,” said Payu Harris, the Lakota who developed and pushed for Mazacoin. “To be a truly independent state you have to have your own issued currency.” Mr. Harris spoke to MoneyBeat from the Bitcoin Center in lower Manhattan. He rang the center’s “opening bell” on the Monday night open-pit trading session.
“When I came across bitcoin, I realized, this is our currency. This is what we need.” He quickly sketched out the idea, and got support from developers in the digital-currency community. “Mazaska” is the Lakota word for money, and after tossing around several ideas, they settled on Mazacoin. He brought the idea to the tribe’s leadership, which quickly acceded to the idea.
“This is for real,” he said in his slight Midwest accent. Mazacoin is the tribe’s official currency, although Mr. Harris acknowledged it won’t supplant dollar, or even bartering, overnight. There’s going to be an outreach and education effort, and it’s going to take time to convince merchants to accept it. But Mr. Harris, a 38-year old father who used to operate a video-rental store on the reservation, thinks in time it will have a positive effect on the Lakota. As a merchant, he said, he often engaged in barter with customers, who would offer trades when they had no money. He hopes that by adopting a digital currency, the Lakota can move into the digital age, and help shed decades of poverty.
The effort abounds with ironies. For digital currency enthusiasts, for whom the idea of a currency without borders is an article of faith, the idea of a digital national currency is anathema. But the bitcoin community has been very supportive, Mr. Harris said. “It’s almost like we’re one tribe of cryptoheads,” he said.
And while the Lakota may call mazacoin their national currency, it remains to be seen whether it will be recognized elsewhere. The move is definitely being watched, though. Mr. Harris has talked with officials from a range of U.S. agencies, including the Treasury Department and Bureau of Indian Affairs, as well as a number of other tribes, and people from as far away as Ireland, Serbia, and Russia.
It’s also ironic that this Indian nation would be surging into the newest digital frontier. Unemployment on the Pine Ridge reservation runs north of 75%, per capita income is around $6,000; it’s the poorest county in the U.S. Yet there was Mr. Harris on Monday, in the heart of the world’s financial center (the Bitcoin Center is a block away from the NYSE), talking about the most cutting-edge, experimental financial technology around.
“I have a ridiculously huge smile on my face when I think about that,” he said. “You can’t miss the irony of that.”
To Mr. Harris, though, Mazacoin is about much more than technology. The Lakota spent most of the 19th Century fighting the U.S. Its most significant victory came in 1866 when Red Cloud wiped out an Army battalion at Fort Kearny, forcing the U.S. to cede the territory to the Lakota. But by 1890 and the massacre at Wounded Knee, the Lakota were nearly wiped out.
The tribe lives on in an archipelago of reservations, nominally independent but still under the aegis of the U.S. Rebuilding the nation and the people has been an ongoing effort. In 2007, they issued a Declaration of Indigenous Rights and drew up a map. Russell Means, a well-known activist and actor who died in 2012, renounced his U.S. citizenship in 2008.
“Mazacoin is another link in the chain of sovereignty as we go into the 21st century,” Mr. Harris said.
Tom Albanese is a rarity: Having stepped down from his job running one of the world’s biggest miners, Rio Tinto PLC, he is back in the public markets. Mr. Albanese was this week appointed as the new chief executive at Indian company Vedanta Resources PLC.
That makes Mr. Albanese the first among a group of former mining bosses who left their jobs in the last year or two to have re-emerged at the helm of a listed company. BHP Billiton Ltd, Anglo American PLC, Xstrata PLC, and of course Rio Tinto PLC–all are under new leadership after suffering heavy write downs made on assets bought during the commodity boom years. Mr. Albanese himself left Rio last January, after the world’s second biggest miner by market value took a $14 billion hit on acquisitions made on his watch.
So where are Mr. Albanese’s peers now? From private equity to simply chilling out, they’ve each gone down different paths.
Marius Kloppers, 51, ran BHP Billiton, the world’s biggest miner by market capitalization until May 2013. Failed bids for Rio Tinto and write downs on BHP’s shale gas assets tarnished his successful tenure. Mr. Kloppers, a South African, is now settled in Melbourne where he is enjoying time with his wife and three children, according to people familiar with the matter.
Anglo American’s former boss Cynthia Carroll left the company last April after a tricky few years. The company suffered massive cost overruns at a key Brazilian iron ore project just as political pressures around its South African platinum operations mounted. One of the few women to have run a FTSE 100 company, Ms. Carroll, 57, a New Jersey-born geologist, has kept a low profile since leaving Anglo. She is a non-executive director at oil major BP PLC and Japan’s Hitachi Ltd.
Mick Davis’s departure from Xstrata, the company he built from scratch from the early 2000s, was particularly dramatic. Initially slated to run the newly-merged Glencore Xstrata, he was displaced when Glencore boss Ivan Glasenberg bumped up the offer price and took the top job as well. Mr. Davis, 56, is now trying to repeat the Xstrata trick of scooping up assets by taking advantage of low prices and a dearth of buyers, with X2 Resources. The venture has secured $1 billion from trading house Noble Group Ltd. and private-equity firm TPG to create a mid-tier, diversified mining and metals group.
Aaron Regent, 48, ran the world’s largest gold company by production Barrick Gold Corp until he unexpectedly left in June 2012 due to the company’s share price underperformance. He’s now created his own Toronto-based mining venture that has been linked to several bids for copper assets including the $5.9 billion Peruvian Las Bambas copper project.
Roger Agnelli, a 54-year old Brazilian, was the first big mining boss to leave his job, exiting Vale SA in May 2011 after running afoul of the Brazilian government. He has since set up a mining joint venture with Brazilian investment bank Banco BTG Pactual SA called B&A Mineracao which has investments in phosphate, potassium and copper projects.
-Rhiannon Hoyle in Sydney contributed to this story.
The key to an activist’s campaign against Cliffs Natural Resources Inc. may lie deep in the mining company’s bylaws.
Casablanca Capital LP is urging Cleveland-based Cliffs to split its U.S. and international operations. On Thursday, it rejected a settlement offer from Cliffs and instead nominated six directors to the company’s 11-person board.
If Casablanca succeeds, it may owe its win to a voting system at Cliffs that has all but gone extinct at other big companies.
Cliffs has what’s known as cumulative voting, which lets shareholders channel all their votes to a single candidate, rather than spreading them across an entire slate. For example, a holder of 500 shares at a company with 10 directors would have 5,000 votes, which could be cast for just one or two nominees.
Nearly half of states once required cumulative voting in corporate elections, hoping to protect minority shareholders from domineering insiders, according to Institutional Shareholder Services Inc. Today, few do. Just 18 of the S&P 500 companies have cumulative voting, down from 72 in 1996, according to ISS.
In proxy fights, the math of cumulative voting favors dissidents like Casablanca. At a company with an 11-member board, like Cliffs, an activist would need just about 9% of shares to be guaranteed at least one seat, if it funneled all its votes to a single candidate. The bigger the board, the bigger the multiplier effect, and the smaller the stake needed to assure one seat.
Lower turnout drops the bar further. Assuming only about 80% of shares are actually voted–Cliff’s historical average since 2010–Casablanca only needs about 6.7% to get one seat. With a 5.2% stake, Casablanca is nearly there already.
To play with the numbers some more, see this Cumulative Voting Calculator from Law Jock PLLC.
Cliffs seems to have sensed its own weakness. At its annual meeting last May, it asked shareholders to repeal cumulative voting and to allow the board to make future changes to the company’s bylaws without shareholder approval. Both proposals failed.
Thirty-five companies have tried a total of 39 times to eliminate cumulative voting since 2005, according to data compiled by the Conference Board and FactSet. Twenty-seven proposals passed.
Casablanca went public in January with its stake in Cliffs, urging the iron-ore miner to split in two. The company is resisting the proposal and instead has cut costs and brought in a new CEO. Cliffs shares were the worst-performing in the S&P 500 last year, falling about 46% against a 19% rise in the broader index.
Cliffs said Friday that Casablanca had rejected a settlement offer that would have let the hedge fund name two new independent directors to the board immediately and a third mutually agreed-upon director later.
“We are disappointed that Casablanca seems intent on waging a public campaign rather than continuing its private engagement with Cliffs’ board and management team,” the company said in a statement.
Bank of America Corp. launched a new checking account Thursday geared toward its least profitable customers. The new account has a lot in common with the prepaid cards that are becoming popular with many of its competitors.
Prepaid cards, which have become increasingly popular alternatives to credit and debit cards, allow consumers to add a set amount of money onto the card to make purchases or cash withdrawals. Like BofA’s new account, most don’t allow overdrafts. But banks or other financial institutions offering the cards usually charge a monthly flat fee.
Two of BofA’s biggest competitors – J.P. Morgan Chase & Co. and Wells Fargo & Co. – offer prepaid cards to consumers. The cards don’t offer services typically associated with a checking account, like checkbooks.
Bank of America’s new account, called “Safe Balance,” doesn’t offer checks either, but does allow consumers to have access to other banking services.
Proponents of prepaid cards say they offer convenience and help consumers in budgeting, since they can control the amount put on the card.
Like a prepaid card, which comes with an array of set fees, consumers can’t waive the $4.95 fee for Bank of America’s new account, which started Thursday in some states and rolls out nationally later this year. The account doesn’t offer overdraft, so consumers won’t have to pay that $35 fee for withdrawing too much money from their account.
The product is meant for a limited number of customers who frequently incur overdraft fees because they keep a low balance in their account.
Banks have been struggling to serve a segment of consumers who keep balances too low for the banks to break even. In the past, banks charged such consumers a variety of punitive fees for keeping low balances or overdrawing on their accounts.
But new regulations instituted after the financial crisis severely limited banks’ ability to charge those fees.
As a result, the industry has been grappling with ways to push those consumers into low-cost, basic products that are cheap for the bank to offer but don’t incur hefty or hidden fees.
Prepaid cards have become one alternative for some banks and it appears to be catching on. U.S. cardholders in 2013 loaded a record $71.6 billion onto prepaid general-purpose reloadable cards, up from $28.6 billion in 2009, according to Mercator Advisory Group, a research and consulting firm in Maynard, Mass. This year, the total is expected to reach $79.4 billion.
BofA, Chase, Citi and Wells Fargo also offer numerous checking accounts that come with varying degrees of service. The accounts charge monthly maintenance fees but provide ways for consumers to have them waived.
–AnnaMaria Andriotis contributed to this article.
With the February jobs report coming in better than expected, investors are expressing more confidence about the health of the economy in the face of winter weather that was harsher than usual in many parts of the country. That, investors say, reinforces already bullish sentiment.
But there’s little sense of a scramble to shovel new cash into stocks – reflected in the muted response in the market this morning. After all, valuations are already on the pricier side of the fence and the economy isn’t posting enough growth that a meaningful acceleration in earnings seems in the cards.
Here’s a selection of what investors had to say after the jobs data:
“This report is giving a little solace to those who were concerned that extreme weather was masking weakness in the economy,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management, which oversees about $242 billion.
After strong gains, stocks are likely due for a short-term pause, he said.
But “any pullback from here is going to be short and shallow,” Mr. Jacobsen said. “People are still trying to reallocate into riskier assets.” –Chris Dieterich
“The data is much better than anticipated, especially in light of what we saw with the ADP and some of the other numbers for February,” said Sean McCarthy, regional chief investment officer at Wells Fargo Private Bank, which oversees $170 billion.
“This number was good enough that we can say, ‘alright, we’re past the weather-related stuff,’” Mr. McCarthy added, referring to investors’ and economists’ recent tendency to dismiss recent weakness in economic reports as a weather-related blip, rather than indicative of an underlying slowdown. “There’s no excuse, going forward.”
Mr. McCarthy’s team has a “neutral” stance on U.S. stocks, he said, but this week raised its yearend target for the S&P 500, due to fourth-quarter corporate earnings topping expectations. –Matt Jarzemsky
“The overall positive surprise starts to coalesce the idea that it really was a weather related slowing in the economy, and it wasn’t more serious than that,” said Paul Zemsky, head of multi-asset strategies and solutions at ING U.S. Investment Management, with $200 billion in assets under management.
“I believe the data backfills what we’ve done to date, and it gives us room to go higher,” Mr. Zemsky said. “It continues the theme that the U.S. is still the best story in the world, in terms of the equity market.” –Tomi Kilgore
“I didn’t know what to expect going into this report and I was prepared for another soft number,” said Nick Sargen, chief investment officer at Fort Washington Investment Advisors, which has about $45 billion in assets under management. “So this number is kind of a relief.” The good report after two weaker ones relieves some fears that the weakening was a trend, Sargen said. Overall, “it leaves room for the Fed to continue its tapering with another $10 billion reduction at its next meeting,” he said.
US stock futures have rallied sharply on the February jobs report, with Knight Capital’s Carl Gilmore saying, “It confirms the softness in data recently is probably mostly weather related and that the economy is continuing to improve at a steady rate.” All told, “We might be in a little bit of a goldilocks environment for a while.” Dow-industrial futures are now up 91 points and the S&P 500 jumps 11. –Kaitlyn Kiernan
“The market wasn’t really prepared for a strong number,” said John Brady, managing director at Chicago futures brokerage R.J. O’Brien & Associates. “The market was kind of looking past [this report] thinking they were going to get a weak number because of the weather.”
The report left some investors “scrambling a little bit,” Mr. Brady said. “They’re not as short as they wanted to be in bonds. I think there will be dip-buyers of equities, but up here, from a tactical standpoint, some people will want to be a seller.” –Matt Jarzemsky
“The path of least resistance is up,” said Bill Nichols, head of U.S. equities at Cantor Fitzgerald. “You’ve had abating fears in Ukraine, and now a better employment number.
“Volumes have been slightly increased [this week], but definitely not frothy,” Mr. Nichols said. “And you’re seeing people be slightly more aggressive with their buy orders, on the margin.”
But many clients are still “more inclined to sell into strength than believe the rally,” he added. –Matt Jarzemsky
Will Chinese monetary policy be the more likely cause of global market volatility over the coming months than the Federal Reserve’s?
The current upheavals in China’s corporate debt market might well offer a clue.
Shanghai Chaori Solar Energy Science & Technology defaulted on an interest payment on one of its bonds Friday. The move sent ripples through Chinese equities, Shanghai’s leading index dipped into the red overnight, underperforming regional market, and cast a cloud over European equities on their opening.
Not because anyone’s worried this default might cause systemic problems. It was worth a relatively modest 89.8 million yuan ($14.7 million).
But because it could be signalling yet another shift in Chinese economic policy. The default suggests firms and their investors won’t necessarily be bailed out by the Chinese government or central bank when they encounter problems. And that credit policy might be normalizing as China seeks to cut its reliance on investment for growth–a substantial amount of which is likely to have been spent on unproductive assets.
Which could yet cause wider ructions in world markets.
The standard interpretation of post-financial crisis markets is that U.S. monetary policy has been the major driver of price trends. Quantitative Easing was a spur to surging markets from 2009 and then behind the wobble last spring–especially in the emerging world–when the Fed started hinting it would slow its bond purchase program.
But it’s hard to disaggregate simultaneous Chinese policy effects during the same time. Following the financial crisis, China flooded its economy with cheap credit and government spending, feeding a global commodity boom.
As for more recent turbulence, around the same time that the Fed made broad hints about its latest QE program last spring, China was actively putting the brakes on domestic credit growth.
Yes, markets rallied late in the summer when the Fed failed to taper, contrary to market fears. But China had also relented on its credit tightening.
Is the markets’ rally of the past month or so and the rebound in commodity prices since late December down to investor confidence in Fed transparency and that it would stick to its steady policy of reducing asset purchases with a view to ending them by the autumn? Or is it related to the fact that Chinese credit in January more or less trebled December’s total and hit the highest monthly rate in four years?
Indeed, the Fed’s own economists have argued that global financial conditions in the years before the 2008 crisis–very low global interest rates and a boom in asset prices–weren’t caused by the Fed’s lower-for-longer policy, itself a response to the bursting of the 2001 tech and telecom bubble. But rather they’d been created by a surfeit in global savings. And much of those savings were Chinese, thanks in no small part to Chinese government policies that depressed domestic demand and boosted exports and investment.
And now China seems to be looking for a way to reverse course.
China’s corporate credit markets seem to be under pressure, while its banks seem, yet again, to have cut back lending. Plenty of observers worry about the massive piles of debt that have built up in the Chinese economy over the past decade and especially since the financial crisis. As long as the Chinese government backed those debts, observers felt that the problem would be resolved by squeezing Chinese households even further and keeping savings rates high until the country’s banking problems were resolved, much as happened during the 1990s.
But if the Chinese government allows defaults or even merely restricts rescues to the formal banking sector, the country’s very large shadow banking system is bound to suffer. This would feed through to commodity markets–Chinese firms have both hoarded commodities and used them as collateral for leverage. And it would undoubtedly cause upheavals in other global markets as Chinese capital were either to seek safety while official assets held abroad are sold off to cover domestic losses.
Undoubtedly, the Fed plays a big role in global financial markets. But in the coming months, China could end up playing an even bigger one in driving market volatility.
This is an opinion column by Alen Mattich, who has been a columnist for Dow Jones for more than a decade. Write to him at email@example.com or on Twitter @AlenMattich
This story just keeps getting weirder.
On Thursday, Newsweek reported that a California man named Dorian Prentice Satoshi Nakamoto may be the mysterious creator of bitcoin. A media circus ensued as Mr Nakamoto emerged from his house to a pack of reporters, jumped into a car with one of them, was followed by the rest as he headed into Los Angeles, and sat down for a two-hour interview with the Associated Press in which he denied being the founder of bitcoin.
Then a message appeared on an Internet message board. It simply said “I am not Dorian Nakamoto.”
What makes the message interesting is that it came on a page that was was first used in 2009 by the possibly pseudonymous Satoshi Nakamoto to initiate discussion about his bitcoin project. The name on the new message? Satoshi Nakamoto. It breaks a five-year silence from this user on that site.
Josef Davies-Coates, who started the P2P Foundation website in 2008, told MoneyBeat that the email source for yesterday’s message was the same email address listed in Nakamoto’s initial paper on bitcoin from October 2008. It’s a GMX email account, which is a service that allows a person to encrypt their email address.
Mr. Davies-Coates said he has never spoken directly to that Nakamoto, hadn’t heard anything from him after he dropped off the board, and has no idea who Nakamoto really is.
There is likely enough to like in Friday’s jobs report to keep the Federal Reserve on track to scale back its monthly bond buying by another $10 billion to $55 billion at its March 18-19 policy meeting.
Fed officials have made clear in the past few weeks that their bar to veering from this course is high. It’s a point that New York Fed President William Dudley emphasized in an interview with The Wall Street Journal Thursday. He said his “threshold is pretty high” to altering the plan. Moreover, Mr. Dudley, Fed Chairwoman Janet Yellen and other Fed officials believe economic data have been soft in recent months because of bad weather. Employment in the retail industry, for example, has now fallen for two straight months. Against that backdrop, a 175,000 increase in payrolls in February probably doesn’t look that bad. Mr. Dudley said he believed the economy is growing at an annual rate below 2% in the first quarter because of bad weather, but is likely to bounce back to a 3% pace in the spring.
A more challenging question for the Fed at its next meeting is whether to change its forward guidance on the likely future course of interest rates. The Fed has said it won’t even consider raising rates until the jobless rate gets to 6.5%. Mr. Dudley said Thursday he thought the Fed should revise the guidance with the jobless rate so close to 6.5%. It was 6.6% in January. With it rising to 6.7% in February, that takes a little pressure off officials to move right away. More on that later.
Analogic’s fiscal second-quarter profit soared 97% as the electronics-component maker reported higher gross margins and booked an income tax gain. Results for the period missed Wall Street’s expectations, and Analogic tempered expectations for the current fiscal year, citing “headwinds” in the company’s markets. Shares dropped 9.9% to $87 in light premarket trading.
Big Lots said its fourth-quarter earnings fell 30% as same-store sales declined and margins tightened. The close-out retailer’s top line, however, exceeded Wall Street expectations. Shares rose 16% to $34 premarket.
Finisar Corp. swung to a fiscal third-quarter profit as the telecommunications-equipment provider reported sharply higher revenue and gross margins. Shares edged up 1.8% to $24.32 premarket.
Foot Locker said its fiscal fourth-quarter profit rose 16% as the retailer of athletic apparel maintained its string of same-store sales gains. Shares jumped 5.3% premarket to $45 on the stronger-than-anticipated results.
H&R Block Inc.'s fiscal third-quarter loss widened sharply as the tax-services provider couldn’t book $277 million in tax return revenue due to the delayed opening of the federal government’s e-file system. Shares dropped 2.5% to $30.20 premarket.
Progress Software Corp. trimmed its expectations for the fiscal first quarter, as the business-software provider said results were hurt by lower license sales. Shares dropped 12% to $22.27 premarket.
Skullcandy Inc.'s fourth-quarter earnings fell 69% as the headphones maker’s steps to improve pricing control had a negative impact on sales. Still, the results topped analysts’ estimates. Shares surged 25% to $9.27 premarket.
Cliffs Natural Resources Inc. dismissed Casablanca Capital LP’s move to nominate directors to the board of the iron-ore mining company, adding it had proposed a settlement to avert a proxy fight that was rejected.
Cooper Cos. said its revenue jumped more than 6% in its fiscal first quarter, though its profit still fell as result of higher costs and expenses.
Corning Inc. disclosed a plan to close part of a manufacturing facility in Japan and transfer that production to a site in South Korea, as the glass maker looks to move some work to a lower cost region.
Korn/Ferry International said its fiscal third-quarter earnings surged on stronger-than-expected fee revenue and higher operating margins.
Piedmont Natural Gas Co. said its fiscal first-quarter profit rose 14% as the natural-gas distributor reported a significant jump in revenue despite higher gas costs.
Power company Public Service Enterprise Group unveiled a $12 billion five-year capital spending plan Friday, an effort to boost earnings growth at its utility segment.
Quiksilver Inc. said its revenue dropped more than expected in its fiscal first quarter, with the declines spanning its geographic markets, partly owing to negative currency impacts.
Sony Corp. said Jack Tretton, chief executive and president of Sony Computer Entertainment Inc.’s America group, will step down from his positions at the end of the month under a mutual agreement with the company.
Staggered boards have long played a central role in the debate on the proper relationship between boards of directors and shareholders. Advocates of shareholder empowerment view staggered boards as a quintessential corporate governance failure. Under this view, insulating directors from market discipline diminishes director accountability and encourages self-serving behaviors by incumbents such as shirking, empire building, and private benefits extraction. On the contrary, defendants of staggered boards view staggered boards as an instrument to preserve board stability and strengthen long-term commitments to value creation. This debate notwithstanding, the existing empirical literature to date has strongly supported the claim that board classification seems undesirable, finding that, in the cross-section, staggered boards are associated with lower firm value and negative abnormal returns at economically and statistically significant levels.
On February 18, both Argentina and the Exchange Bondholders Group filed petitions for writs of certiorari with the Supreme Court, seeking review of the Second Circuit’s rulings in the pari passu litigation. We discuss below the certiorari procedure, followed by comments on substantive arguments raised by Argentina and the Exchange Bondholders.
Our many prior comments on Argentina’s pari passu litigation, as well as all of the material pleadings and decisions (including the two February 18 certiorari petitions), can be found on our Argentine Sovereign Debt webpage, at http://www.shearman.com/argentine-sovereign-debt.