>>> American Railcar Industries beats by $0.14, reports revs in-line

American Railcar Industries beats by $0.14, reports revs in-line
(Icahn is holding a 55% stake in this company)
Reports Q4 (Dec) earnings of $1.14 per share, $0.14 better than the Capital IQ Consensus Estimate of $1.00; revenues fell 5.1% year/year to $197.2 mln vs the $196.86 mln consensus. The decrease in consolidated revenues was due to a decrease in direct sale railcar shipments in the fourth quarter of 2013 compared to the fourth quarter of 2012, as a result of building more railcars for our lease fleet. This was partially offset by increased revenues for the railcar services and railcar leasing segments.

Segments
Total manufacturing - segment revenues for the fourth quarter of 2013 were $252.5 million, an increase of 7% over the $236.5 million for the same period in 2012.
  • The primary reason for the increase was a higher mix of tank railcars sold, which generally sell at higher prices due to more material and labor content, and at higher margins than covered hopper railcars.
Total leasing - segment revenues for the fourth quarter of 2013 were $9.5 million, an increase of 86% over the $5.1 million for the same period in 2012.
  • The primary reason for the increase in revenue was an increase in the number of railcars on lease and an increase in the average lease rate. ARI had approximately 4,450 railcars in the Company's lease fleet at the end of 2013, compared to approximately 2,590 railcars at the end of 2012.
Backlog
  • ARI's backlog as of December 31, 2013 was approximately 8,560 railcars, with an estimated market value of $1,040.1 million.
  • This backlog includes approximately 2,330 railcars for lease with an estimated market value of $326.7 million.

>>> Sequoia’s A Big Winner In Facebook’s WhatsApp Acquisition, With Its Stake Wo


Sequoia’s A Big Winner In Facebook’s WhatsApp Acquisition, With Its Stake Worth About $3 Billion

Facebook today announced its $19 billion acquisition of WhatsApp. Obviously WhatsApp has a lot to cheer about, having grown to 450 million active users over the course of the last five years. But from a pure venture perspective, the purchase represents another huge win for Sequoia Capital and partner Jim Goetz.
(UPDATE: After talking with more sources, we’re able to provide more context around WhatsApp’s funding history and Sequoia’s involvement.)
While the only funding that WhatsApp had publicized was the $8 million Series A led by Sequoia, the company had raised two subsequent rounds of financing, including an unreported $50 million Series C round. Sequoia led both of those subsequent rounds, investing about $60 million in WhatsApp over the years, which added up to a total ownership stake in the high teens, I’ve been told.
The deal is the largest acquisition of a venture-backed company in history, which also clearly puts it in the early lead for the biggest single venture return this year.
In a blog post today, Goetz said it’s been a privilege to work with the WhatsApp founders. “It’s been a remarkable journey, and we could not be happier for these talented underdogs whose unshakeable beliefs and maverick natures epitomize the spirit of Silicon Valley.”
Of course, WhatsApp isn’t the first company Sequoia had invested in before being acquired by Facebook — it led a $50 million round of financing in Instagram just days before the photo-sharing app was acquired. But it’s by far the biggest.
Assuming Sequoia owns almost 20 percent of WhatsApp, its stake is now worth about $3 billion in cash and stock. The deal by itself could provide more than a 2x return on the $1.3 billion fund the initial WhatsApp investment came from, and represents a 50x return on its investment in the company.
In an interview a few hours after the deal was announced, Goetz highlighted the international appeal of the app. While it’s not as well known in Silicon Valley circles, the app has huge engagement with users around the world.
“If you were in Spain of Brazil, most of the population there is interacting with WhatsApp multiple times a day,” Goetz said. Saying that he expected the app to become a household name in the U.S., Goetz pointed out that it has nearly half a billion users, and “is likely to touch a billion or more in the not-too-distant future.”
With that user growth also comes engagement, which Goetz believes is the highest amount in the ecosystem. And the fact that WhatsApp makes money — and has for years. “When we invested in the Series A, they had already paid income taxes, which is rare for a company at that stage,” he said.
It’s a huge deal for Sequoia, and in a strange way the WhatsApp acquisition might even be considered the firm’s revenge on Facebook for a prank Facebook CEO Mark Zuckerberg famously pulled on the partnership. Once upon a time, he pitched Wirehogwhile in his pajamas, reportedly out of spite for Sequoia partner Michael Moritz’s treatment of Sean Parker at Plaxo.
Big surprise, Sequoia never invested in Facebook.
But it seems to have made a ton of money off the social networking giant after all.

NY Post : One of New York’s biggest shipping tycoons is back in troubled waters.

One of New York’s biggest shipping tycoons is back in troubled waters.
Peter Georgiopoulos, whose Genco Shipping & Trading operates a fleet of 53 tankers, missed a $3 million payment to its lenders this week, a victim of a steep drop in rental prices for tankers.
Genco shares, which traded as high at $25 as recently as 2010, closed Wednesday at $1.37, down 24 percent.
Georgiopoulos, 52, whose long silver mane and supermodel wife Kara Young are not unknown to New York’s paparazzi, has to shell out about $11,000 a day to operate one of Genco’s tankers, but rental rates have dropped to about $10,000 a day, the company, a bulk shipper, said recently, putting Genco in a bind.
The tattered tycoon is discussing a debt-for-equity swap with Genco lender Centerbridge Partners, The Post has learned.
The private-equity firm would take control of the company in a pre-packaged bankruptcy but leave him in place to run the operation, sources said.
For Georgiopoulos, a West Village resident who in 2008 claimed he was worth $2 billion, it’s his second shipwreck in two years.
In 2012, Oaktree Capital Management reached a deal with Georgiopoulos to repossess General Maritime Corp. through a pre-packaged bankruptcy.
He was also left in charge of that company.
“I think he’s been knocked off his pedestal,” a shipping source investor said. “He’s not a shipping giant anymore.”
While amassing and losing a fortune in shipping, Georgiopoulos, who cut his teeth on Wall Street as a Drexel Burnham investment banker, is a trader at heart, sources said.
For example, in December, he worked out a plan with Blackstone to finance a deal in which General Maritime, one of the world’s largest oil shippers, would buy tankers from industry giant Maersk.
Poised to win the auction, he looked around for better financing instead of closing the deal, a source close to the situation said.
When Blackstone execs found out they “told him to stuff it,” the source said.
General Maritime was simply beat in the auction and its relationship with Blackstone is fine, a Georgiopoulos spokesman said.
The sinking of his second shipping company — he still owns a third shipper, Aegean Marine Petroleum, an oil-services company — could surely put a crimp in his lifestyle.
In addition to his double-wide West Village brownstone, Georgiopoulos owns a sprawling 78-acre Dutchess County estate where, on occasion, he invites friends to go pheasant hunting, sources said.
He has donated plenty to various city charities. In fact, Catholic Charities of New York plans to honor him Feb. 27 as its man of the year.
Where he once boasted that he was a billionaire, Georgiopoulos’ 10 percent stake in Aegean Marine is worth just $45 million and the value of his Genco stake is down to $6 million.
Georgiopoulos declined to comment.

(BFW) Danone Forecast Better Than Some Feared, Shrs May Rise: Exane


Danone Forecast Better Than Some Feared, Shrs May Rise: Exane
2014-02-20 07:30:46.935 GMT


By Heather Burke
     Feb. 20 (Bloomberg) -- Danone 4Q/2013 results had no big
surprises, 2014 forecast was maybe better than some investors
feared, Exane says; sees “modest” rise in shrs today.
  * Some in mkt may have trouble being confident in +/- 20bps
    margin forecast
  * Bloomberg Industries analysis here
  * Earlier story here

For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporter on this story:
Heather Burke in London at +44-20-7673-2044 or
hburke2@bloomberg.net

To contact the editor responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net

>>>> What to look at today - 20/02/2014

US Market closed lower...equities slumped to lows in a move that coincided with a headline from the International Monetary Fund reminding investors that global growth remains uneven and fragile with persistent downside risks....only 2 sectors were up (Telecom & Energy)...volume were still light @ 688mil shares...VIX @ 15,50 +11,75%...FB to buy for $16b ($4b cash + $12b of stock) --> FB-4%, BBRY +9% after hours...on potential higher value for BBM Messenger...TSLA +12% after numbers...After an unexpected contraction in China HSBC manufacturing PMI last month,
conditions deteriorated further in February. February flash PMI slumped to a 7- month low of 48.3, new orders component fell below 50 for the first time in seven months, and the Employment sub-index hit the lowest reading since Feb 2009...To complicate matters further, PBoC once again flashed its tilt toward a tightening bias with another large liquidity drain....Japan trade conditions remain dire, with January figures showing the biggest deficit on record...Nikkei -2.15%...Shanghai -0.26%

Eur$ 1.3750 S&P Fut -0.22% European fut. -0.87%

- Swiss January Exports Rise 2.5% M/m; Imports Fall 2.3% M/m

Keep an eye on :
- AC FP : Accor Ebit Beats Ests., Says Benefiting From Global Recovery
- ADP FP : Aeroports de Paris 2013 Net EU305m vs Est. EU309m
- AF FP : Air France FY Ebitda Beats Est.; Reiterates 2014 Profit Target
- AGN NA : Aegon 4Q Underlying Profit Rises to EU491m; Dividend Plan Misses
- BAMNB NA : BAM Group 2013 Sales, Pretax Profit Fall
- BAYN GY : Merck Unit Eyed by Cos. Including Bayer, Novartis: {http://bsun.md/1kYzcMC}
- BBVA SM : BBVA Sells 6.8% of Tubos Reunidos to N+1, Cinco Says
- BN FP : Fresenius May Bid on Danone Nutrition in $5.5b Deal: Reuters
- BN FP : Danone 2013 Underlying EPS Misses Ests, 4Q LFL Sales Growth Beat
- BOL FP : Bollore Ready to Finance Electric Car Charging Network: Parisien
- CAP FP : Cap Gemini 2013 Rev. In Line, Net Beats; Beats BDVD Forecast
- CNP FP : CNP Assurances 2013 Net Income Misses; Dividend Plan In Line
- DB1 GY : Deutsche Boerse 4Q Ebit Eu189.5m vs Eu185.2m Y/y
- DEXB BB : Dexia Posts 2013 Loss of EU1.08b, Sees CAD Ratio of 16.1%
- DIA SM : Dia 2013 Adj. Ebitda In Line, Net Misses, Keeps EPS Target
- DLG GY : Dialog Semiconductor 4Q Gross Margin Beats Estimates
- EML NA : Apollo May Become Main Endemol Shareholder After Debt Deal: FD
- G IM : Generali Legally Challenges Settlement Agreement of Former CEO
- GSZ FP : GDF Suez, Veolia Said to Bid for Mubadala Abu Dhabi Utility Unit
- HEN3 GY : Henkel 4Q Organic Sales Growth Misses Estimates
- ING FP : Ingenico 2013 Net Matches Est., Ebitda Beats Est.
- LLOY LN : Lloyds Set to Domicile TSB in England Amid Share Sale: Telegraph
- MAIL LI : Mail.ru Sees 2014 Revenue Growth 22%-24%
- NOVN VX : Merck Unit Eyed by Cos. Including Bayer, Novartis: {http://bsun.md/1kYzcMC}
- UG FP : EU Approves France Raising Peugeot Stake, Les Echos Reports {http://bit.ly/1d1nwk4}
- PFC LN : Petrofac Wins ~$1.2b Contract From BP for Oman Gas Project
- PTC PL : Portugal Telecom 2014 Capex in Portugal Below EU400m, CFO Says
- RAND NA : Randstad 4Q Sales Slightly Below Ests, Co. Sees Gradual Recovery
- RF FP : Eurazeo Said to Appoint Rothschild to Explore IPO for Europcar
- SAF FP : Safran Sees 2014 Adj. Rev. Growth in Mid-Single Digits
- SEV FP : Suez Env. Sees 2014 Ebitda Organic Growth Equal to or >2%
- SGO FP : Saint-Gobain 2013 Net EU595m vs Est. 867m, De Chalendar Says 2014 Looking Better Than 2013
- SUN SW : Sulzer 2013 Ebit Beats Estimates; Sales, Orders Fall
- SREN VX : Swiss Re 4Q Net Income Beats Estimates, Plans Special Dividend
- TEC FP : Technip 4Q Net EU135.5m in Line With Ests.; Backlog EU16.6b, CEO Sees Moderating Capex Growth of Oil Companies
- TEC FP : Marubeni Ties Up With Technip on Offshore Wind Farms: Nikkei
- TCH FP : Technicolor Sees Adj. Ebitda EU550m-EU575m, Positive Net in 2014
- TTK GY : Takkt 2013 Ebitda Misses Ests., Sees Return to Growth in 2014
- HO FP : Thales 2013 Net Beats Est.; Sees Stable 2014 Rev.
- TUI GY : TUI AG 15.7% Stake Being Sold by Monteray, Goldman Says, shares said offered @ E13,25

>>> Brokers Upgrades & Downgrades - 20/02/2014

>>> Up
*ALSTOM RAISED TO NEUTRAL VS SELL AT GOLDMAN
*HELLENIC PETROLEUM RAISED TO HOLD VS SELL AT SOCGEN
*METSO RAISED TO NEUTRAL VS SELL AT GOLDMAN
*NOKIAN RENKAAT RAISED TO BUY VS NEUTRAL AT UBS
*PADDY POWER RAISED TO BUY VS NEUTRAL AT GOLDMAN
*STANDARD LIFE RAISED TO NEUTRAL VS REDUCE AT NOMURA
*WILLIAM HILL RAISED TO BUY VS NEUTRAL AT GOLDMAN

>>> Downgrade
*ABB CUT TO SELL VS NEUTRAL AT GOLDMAN
*ALFA LAVAL CUT TO SELL VS NEUTRAL AT GOLDMAN
*ADIDAS CUT TO NEUTRAL VS OVERWEIGHT AT HSBC
*DS SMITH CUT TO CONVICTION SELL VS NEUTRAL AT GOLDMAN
*GEA CUT TO NEUTRAL VS BUY AT GOLDMAN
*GOLD FIELDS CUT TO SELL VS NEUTRAL AT GOLDMAN
*INTER RAO CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*VALLOUREC CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*VOLKSWAGEN CUT TO HOLD FROM BUY AT BANKHAUS LAMPE

>>> PT Change
*VODAFONE PT RAISED TO 290P VS 260P AT CITI, RATES BUY

>>> Initiation
*AURUBIS RATED NEW NEUTRAL AT GOLDMAN, PT EU45
*EVN AG RATED NEW NEUTRAL AT GOLDMAN

>>> Call
>> Stock
*GO-AHEAD REMOVED FROM GOLDMAN CONVICTION BUY LIST, STAYS BUY
*LEGRAND ADDED TO GOLDMAN CONVICTION BUY LIST, WAS BUY
*PRYSMIAN EXITS GOLDMAN CONVICTION BUY LIST, STAYS BUY
*RSA PT REMOVED AT MORGAN STANLEY, CITES MATERIAL UNCERTAINTIES
*SUEZ ENVIRONNEMENT ADDED, TERNA EXITS UBS MOST PREFERRED LIST

>>> IMF: Reiterates 2014 global GDP around +3.75%, adjusts 2015 GDP to +4.0% fro

IMF: Reiterates 2014 global GDP around +3.75%, adjusts 2015 GDP to +4.0% from +3.9% prior - briefing ahead of G20
- Capital outflows, higher interest rates, and sharp currency depreciation in emerging economies remain a key concern and a persistent tightening of financial conditions could undercut investment and growth in some countries.
- There is scope for better cooperation on unwinding unconventional monetary policy, such as wider central bank discussion of exit plans.
- With economic prospects improving, it will be critical to avoid a premature withdrawal of monetary policy accommodation, including in the US.
- ECB should ease policy to aid the economy, BoJ should ease further if progress toward 2% inflation target stalls or reverses.

>>> Asian Update

Asian Market Update: China Flash manufacturing PMI contraction deepens; Japan trade deficit soars to new heights

***Economic Data*** - (CN) CHINA FEB HSBC/MARKIT FLASH MANUFACTURING PMI: 48.3 V 49.5E (7-month low; 2nd consecutive contraction) - (JP) JAPAN JAN MERCHANDISE TRADE BALANCE: -¥2.79T (record high deficit) V -¥2.49TE; ADJUSTED TRADE BALANCE: -¥1.82T V -¥1.51TE - (JP) JAPAN JAN SUPERMARKET SALES Y/Y: -0.2% V -0.8% PRIOR - (JP) Japan investors bought ¥501.5B (first net buys in 5 weeks) in foreign bonds last week vs sold net ¥617.2B in prior week; Foreign Investors sold net ¥279.0B in Japan stocks v sold net ¥76.4B in prior week - (AU) AUSTRALIA JAN RBA FX TRANSACTIONS MARKET (A$): 362M V 884M PRIOR - (NZ) NEW ZEALAND Q4 PPI INPUT Q/Q: -0.7% (first decline in a year) V 2.2% PRIOR; PPI OUTPUT: -0.4% (first decline in a year) V 2.4% PRIOR - (NZ) NEW ZEALAND FEB ANZ CONSUMER CONFIDENCE INDEX: 133.0 V 135.8 PRIOR; M/M: -2.1 V +4.9% PRIOR - (NZ) NEW ZEALAND JAN ANZ JOB ADVERTISEMENTS M/M: +2.8% (first rise in 3 months) V -0.7% PRIOR - (SG) SINGAPORE Q4 FINAL GDP Q/Q: 6.1% V 0.8%E; Y/Y: 5.5% V 5.3%E; Maintains 2014 GDP forecast 2.0-4.0% - (US) API PETROLEUM INVENTORIES: CRUDE: -470K (1st draw in 5 weeks) v +2Me; GASOLINE: +1.39M v -0.5Me; DISTILLATE: -675K v -2Me

***Highlights/Observations/Insights*** - Tesla shares are zooming ahead with a 12% rise in extended session to fresh all-time highs above $215 after blowing away the estimates and guiding accelerated production and margin expansion while also promising strong growth in the China markets. - Australia earnings highlighted by improving results from Leighton Holdings, while key energy/materials companies - Alumina and Origin - slump on slower growth. - Japan trade conditions remain dire, with January figures showing the biggest deficit on record. Soft yen continues to do more damage than good on trade, as energy-driven growth in the value of imports outpaces the improvement in exports, serving as a reminder of just how critical the restart of nuclear reactors in Japan might be. Chief Cabinet Sec Suga attributed the slump in trade data to rising imports, while nuclear regulators were reported to be looking to conduct a safety review on a handful of reactors, paving the way to a "final review" in the coming months. Exports to China, US, and Europe, all showed double-digit growth rates, suggesting external demand is hardly to blame. - After an unexpected contraction in China HSBC manufacturing PMI last month, conditions deteriorated further in February. February flash PMI slumped to a 7-month low of 48.3, new orders component fell below 50 for the first time in seven months, and the Employment sub-index hit the lowest reading since Feb 2009. Backlog and inventories also pierced below the 50-mark into contraction zone. Analysts noted that seasonality might be once again in play, with only about a week of reliable data for this flash report after the Lunar New Year break, however critics of China reporting were further unnerved by the discrepancy of soft manufacturing trend and strong trade/lending figures in January. To complicate matters further, PBoC once again flashed its tilt toward a tightening bias with another large liquidity drain.

***Fixed Income/Commodities/Currencies*** - (JP) BOJ offers to buy ¥250B in 1-3yr JGB, ¥250B in 3-5yr JGB and ¥200B in JGB with maturity over 10-yr - (CN) PBoC to drain CNY60B in 14-day repos (2nd consecutive drain); Drains net CNY108B this week v drained CNY450B prior - USD/CNY: (CN) PBoC sets yuan mid point at 6.1146 v 6.1103 prior setting (Weakest Yuan setting since Dec 25th) - GLD: SPDR Gold Trust ETF daily holdings fall 5.7 tonnes to 795.6 tonnes (lowest level since Feb 3rd)

- Risk-off sentiment on the heels of the disappointing China manufacturing PMI predictably translated into soft AUD / strong JPY trade. AUD/USD fell about 50pips toward $0.8950, USD/JPY was down about 30pips below ¥102, and AUD/JPY cross saw a combined loss of nearly 100pips, falling from ¥92 to ¥91.05 session low post flash-PMI print.

***Speakers/Political/In the Papers*** - (CN) BofA/ML's Lu Ting: China HSBC/Markit flash PMI survey was conducted during the period of Feb 12-18th, where most of small-mid sized firms were just back to work from Lunar New Years holidays; Small-mid sized firms are majority sample of survey, which could lead flash PMI to a mis-representation of economic activity in China - (CN) PBoC: China 2013 eastern region social financing CNY9.04T v CNY7.65T in 2011 - annual regional financing report - (JP) Japan Chief Cabinet Sec Suga: Abenomics does not have a military purpose; Balance of trade affected by imports increase - (JP) BOJ member Morimoto: Japan growth to exceed potential despite sales tax hike; Sees strong probability of meeting 2% inflation target from H2 of 2014 - (JP) Japan nuclear regulators to provide safety review in weeks - Kyodo News - (JP) Japan Bankers Association Chairman: "Beginning to see good numbers" in terms of growing appetite for business loans - Nikkei - (KR) According to one survey, over 62% are satisfied with South Korea Pres Park's handling of the govt - Korean press - (KR) Bank of Korea (BOK): South Korea bankruptcies in Jan rose to 88 from 68 in Dec, which was a 6-month low - Korean press - (KR) South Korea Ministry of Finance: To monitor spike in yuan and other fx currency deposits for potential risks - (AU) Australia Treasurer Hockey: Reiterates G20 to discuss impact of US Fed taper - (SG) Singapore Central Bank (MAS) : Monetary policy at appropriate setting, remains unchanged; Unchanged view for 2014 inflation - (TH) Thailand Central Bank Gov Prasarn: Thailand has policy space, current rate accommodative; Not worried about Fed tapering impact - (US) Fed's Williams (dove, FOMC non-voter): Bar is high to halt winddown of bond purchases; Fed needs to revise forward guidance system - (UR) Follow up: Ukraine President Yanukovych: Govt, Opposition have agreed on truce - financial press

***Equities*** Market Snapshot (as of 04:30 GMT): - Nikkei225 -2.2%, S&P/ASX -0.1%, Kospi -0.6%, Shanghai Composite +0.7%, Hang Seng -1.1%, Mar S&P500 -0.4% at 1,818, Apr gold -0.6% at $1,312, Mar crude oil -0.2% at $103.07/brl

US markets: - TSLA: Reports Q4 $0.33 v $0.21e, Non-gaap Rev $761M v $679Me; CEO Musk: Confirms held talks with Apple in 2013; declines to provide details of conversation - conf call comments; +12.6% afterhours - SWY: Reports Q4 $0.53(adj) v $0.46e, R$11.31B v $11.5Be; Confirms company is holding discussions regarding possible sale; +3.6% afterhours - EQIX: Reports Q4 $0.91 v $0.78e, R$564.7M v $563Me; +2.3% afterhours - ALL: Increases quarterly dividend by 12% to $0.28/shr; Launches $2.5B common stock repurchase program (11% of market cap); +0.7% afterhours - GPS: Raises minimum hourly rate for US employees to $9.00/hr; effective immediately; flat afterhours - MAR: Reports Q4 $0.49 v $0.50e, R$3.22B v $3.29Be; -0.1% afterhours - CAR: Reports Q4 $0.15 v $0.12e, R$1.85B v $1.83Be; -1.0% afterhours - TX: Reports Q4 $0.64 v $0.61e, R$2.12B v $2.09Be; -2.0% afterhours - FB: To acquire WhatsApp mobile messaging service for about $16B - filing; -2.7% afterhours - MM: Reports Q4 $0.08 v -$0.04e, R$97M v $97.8Me; -10.7% afterhours - ONTX: Phase 3 ONTIME Trial of Rigosertib in Higher Risk Myelodysplastic Syndromes (MDS) did not meet the primary endpoint; -35.6% afterhours

Notable movers by sector: - Consumer Discretionary: Super Retail Group SUL.AU +3.6% (H1 results); Sydney Airport SYD.AU -0.1% (Jan traffic results); Shun Ho Technology Holdings 219.HK -6.0% (FY13 results); SEEK Ltd SEK.AU +2.1% (H1 results) - Financials: Western Securities 002673.CN +1.1% (prelim FY13 results); COL Capital Ltd 383.HK +32.0% (positive profit alert) - Materials: Alumina Ltd AWC.AU -1.0% (FY13 results) - Energy: Origin Energy ORG.AU -2.3% (H1 results); China Petrochemical Sinopec 600028.CN +10.0% (restructuring plans) - Industrials: Leighton Holdings +5.2% (FY13 results); Shanghai International Airport 600009.CN +1.6% (Jan traffic results); Toyota Motor 7203.JP -1.0% (no deal reached with steelmakers) - Technology: Tencent 700.HK -2.3%, NHN 035420.KR -7.9% (Facebook acquisition of WhatsApp) - Healthcare: Acrux Ltd ACR.AU +3.8% (H1 results) - Utilities: TEPCO 9501.JP -2.4% (detects leak)

WSJ : Now the Message Is a Facebook Medium

Now the Message Is a Facebook Medium WhatsApp Shows That for Facebook, Size Really Matters

Under the hood of Facebook's FB +1.13% whopping $19 billion deal to buy WhatsApp is a simple conjecture—that size really matters.

At least that is the best that could be gleaned from Facebook co-founder and CEO Mark Zuckerberg during a call to discuss the surprise deal announced after the market's close Wednesday. He was pressed several times by analysts to share his thoughts on how to make money with a service that currently charges less than $1 a year to users. In response, Mr. Zuckerberg kept coming back to his projection that WhatsApp's user base eventually will hit the one-billion mark. That would make it "incredibly powerful," he said.

FCC Tries Again to Stop Web Traffic Slowdowns Target CEO Struggles to Contain Giant Cybertheft How to Try Bitcoin Without Losing Your Shirt Four Tablets That Want to Replace Your Work Laptop Investors will have to take that on faith for now, as WhatsApp has about 450 million users globally. The company has succeeded in building a powerful mobile-messaging platform that spans the various platforms that include iPhone, Android, Windows and BlackBerry. That is a tempting business for Facebook, which also is working to make its offerings ubiquitous across all mobile devices.

And the company has made clear that it isn't looking to simply get every one of those services tied into its flagship social network. This is wise, given that not all wireless customers find the main Facebook service appealing or useful.

Picking up Instagram was a good way for Facebook to tap into a different user base, though even that deal's $1 billion price tag gave investors pause.

In one sense, the WhatsApp deal might not look as expensive as its eye-popping headline number suggests. The combined price of $19 billion represents about $42 per user compared with about $30 per user in the Instagram deal—based on the value of Facebook's shares at the time of that deal. And Facebook's current market cap values its own user base at around $140 per user. On the basis of the price paid per user as a percentage of a Facebook user, the WhatsApp deal is actually at a lower rate than Instagram.

However, Instagram and Facebook users are valued essentially as potential eyeballs for advertising. By contrast, Mr. Zuckerberg and WhatsApp chief Jan Koum on the deal call both ruled out advertising as a way to generate revenue from WhatsApp.

The company clearly sees its opportunity in the large base of customers who pay billions of dollars each month to wireless carriers for texting.

It could take years, though, to generate a return through this strategy. And both Facebook and WhatsApp executives said they weren't interested in monetizing the messaging service in the near term. That is certainly bold given Facebook is shelling out about a third of its cash on hand for the deal—along with enough stock to dilute current shareholders by nearly 8%.

The risk for Facebook is that the deal ends up being more like eBay's $2.6 billion acquisition of Skype in 2005, which was done at about $48 per Skype user. Growth wasn't the problem for the Internet telephony company. Rather, it never fit with eBay's e-commerce service and the company was forced to write down most of the price two years later before selling a majority stake to Silver Lake in 2009.

Mr. Zuckerberg says that he is playing the long game by doing this deal with WhatsApp. His investors have no choice but to play along—or get out.

WSJ : Peltz's Trian Fund Renews Push for PepsiCo Split

Peltz's Trian Fund Renews Push for PepsiCo Split

Dissatisfied With Company's Efforts, Shareholder Again Urges Breakup of Beverage and Snacks Units Nelson Peltz's Trian Fund Management LP is renewing its campaign to split up PepsiCo Inc. PEP -1.38%

The activist shareholder backed off in recent months as PepsiCo's management completed what the company called an "exhaustive" strategic review. The results, unveiled last week, didn't satisfy Mr. Peltz. While PepsiCo said it would boost dividends and stock buybacks by 35% this year, it stayed firm on largely conducting business as usual.

Turning up the heat, Trian sent a 37-page letter to PepsiCo's board of directors Wednesday outlining why it still thinks the snack and drink behemoth should spin off its struggling beverage business.

Trian, which says it owns roughly $1.2 billion in PepsiCo stock it amassed last year, also informed PepsiCo directors it will begin meeting with shareholders "immediately" and might conduct public shareholder forums as it tries to galvanize investor support for a breakup of the maker of Lay's potato chips and Pepsi-Cola.

Nelson Peltz AP

"If the plan is the status quo, that's an unacceptable plan," Mr. Peltz said in an interview.

PepsiCo said in a statement Wednesday night that management and the board "have spoken clearly" against a split and remain fully aligned. "Our focus is on delivering results for our shareholders, not new, costly distractions that will harm shareholder interests," it added in response to Trian's letter.

PepsiCo directors told Mr. Peltz in a meeting late last year that the board backed management's opposition to a split, according to people familiar with the matter.

Trian published a "white paper" last July urging PepsiCo—which has a stock market capitalization of $118 billion and booked $66 billion in revenue last year—to spin off its underperforming beverage business and acquire Mondelez International Inc. MDLZ +0.20% to create a global snacks powerhouse.

Mr. Peltz halted his merger push last month after failing to gain traction but secured a board seat at Mondelez, whose brands include Oreo cookies and Trident gum. Until now, he has also failed to win enough support to split up PepsiCo, whose brands also include Quaker oatmeal, Tropicana juice and Gatorade sports drinks.

But the influential investor is betting more PepsiCo shareholders will join him if the company's beverage business keeps losing market share to rivals like Coca-Cola Co. PepsiCo said last week its beverage volume rose 1% in the fourth quarter, compared with 3% for snacks. Operating profit at its troubled Americas beverage unit fell 10% as North American soda volumes dropped by a mid-single-digit percentage.

In its letter to PepsiCo directors Wednesday, a copy of which was reviewed by The Wall Street Journal, Trian said PepsiCo has underperformed peers in stock price, operating margins and earnings growth. It calculated that since Chief Executive Indra Nooyi took over in October 2006, PepsiCo shares have a total return including dividends of about 47%, less than half that of Coke and the broader index of consumer staple stocks.

"We believe the best way to ensure improved performance at PepsiCo is to separate global snacks and beverages, putting the future of each business in the hands of empowered and focused management," the letter states.

Mrs. Nooyi has repeatedly said PepsiCo's beverages—which generated 48% of company revenue last year—give the company critical leverage around the globe, lowering costs and increasing clout with retailers.

Separating snacks and drinks "loses significant synergies," Mrs. Nooyi told analysts in a conference call last week. She added "there wasn't a stone" unturned during management's "exhaustive" yearlong strategic review, which included consultants and bankers.

But Trian says the company's faster-growing and more profitable snacks business has been hamstrung by subsidizing beverages.

It also says PepsiCo has made several missteps in its beverage business to cede ground to Coke, which has been more nimble in introducing new products in recent years.

Mr. Peltz also says Mrs. Nooyi told him last fall that PepsiCo made a "mistake" in buying its two largest U.S. bottlers in 2010 but that she had made the move because the bottling system was in "disarray."

PepsiCo paid $7.8 billion for the two bottlers.

Trian says it isn't pushing for the ouster of Mrs. Nooyi, who is also PepsiCo's chairman. "This is not about Indra Nooyi. This is about the structure of the company," Ed Garden, Trian's chief investment officer, said Wednesday.

Breaking up companies has been a common theme for activist shareholders recently, who have targeted ever-larger companies for such pushes. This year activists are also seeking to split Dow Chemical Co. and eBay Inc., though the companies are resisting such suggestions.

Many companies are rebuffing the pushes to split and arguing that being bigger brings cost savings and helps customer relationships. Moody's Investors Service, a credit-ratings firm, has raised questions that several suggested splits could put separated companies at risk of having too much debt.

Trian has been among the activists most successful in splintering conglomerates and has been long associated with maneuverings of food and beverage companies in particular.

Trian regularly argues that separating management teams can force them to improve operations or lose to rivals.

Mr. Peltz agitated at Cadbury PLC and pushed it to separate Dr Pepper Snapple into a separate company in 2008, a split that came years after his own company had sold Snapple to Cadbury.

Then, Cadbury was bought by Kraft Inc. in 2010, only to have Trian and other shareholders pressure Kraft into splitting in half in 2011. The Kraft split created Mondelez.

In 2006, Trian waged a heated proxy fight, and won board seats, at ketchup giant H.J. Heinz Co., which last year sold to private-equity firm 3G Capital and Warren Buffett's Berkshire Hathaway Inc.

Trian is also pointing to Pepsi's past spinning off what's now Yum Brands Inc. as evidence breaking up can work.

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