Gapping down
In reaction to disappointing earnings/guidance:
- `RAD -7.9%, FUL -6.5%, CAG -6%, PDCO -5.5%, FIZZ -5.3%, MKC -3.7%, WOR -2.8%, ACN -1.8%, NG -1.6%
M&A news:
- WAGE -1.9% (to be acquired by HealthEquity (HQY) for $51.35/share in cash)
Other news:
- ACRS -35.1% (reports Phase 2 clinical trial of ATI-502 topical in patients with alopecia areata did not meet endpoints)
- ZYXI -16.1% (files for ~16.66 mln share common stock offering by selling shareholders)
- MOTS -12.6% (announces public offering of stock)
- IMGN -7.2% (completes operational review, will prioritize continued development of mirvetuximab and a select portfolio of three earlier-stage product candidates targeting solid tumors and hematological malignancies)
- OSTK -5.6% (pulling back along with bitcoin in extended trade)
- BA -2.8% (confirms FAA update; United (UAL) has extended Boeing (BA) 737 Max cancellations until September 3)
- GMDA -2.7% (prices underwritten public offering of 7 mln ordinary shares at a public offering price of $5.00 per share)
- RMR -2.7% (RMR Group client companies price offering of 7,942,245 common shares at $40.00 per common share)
Analyst comments:
- JWN -3.1% (downgraded to Sell from Neutral at Goldman)
- ROST -2.3% (downgraded to Sell from Neutral at Goldman)
- BC -1.1% (downgraded to Neutral from Buy at Northcoast)
- TRV -1.1% (downgraded to Sell from Hold at Deutsche Bank)
Gapping up
In reaction to strong earnings/guidance:
- MLHR +11.8% (also increases quarterly cash dividend to $0.21 per share from $0.1975 per share), APOG +6.6%, KBH +6.4%, WBA +1.6%, GMS +0.9%
M&A news:
- WTI +1.3% (announces acquisition of producing properties in the Gulf of Mexico)
Other news:
- VRCA +21.3% (achieves "positive" topline results in phase 2 clinical study of VP-102 in patients with common warts; to host call tomorrow)
- OFG +17.1% (OFG Bancorp to acquire Scotiabank's (BNS) Puerto Rico operation for $550 million in cash and Scotiabank's US Virgin Island branch for $10 million deposit premium)
- NVAX +7.6% (to utilize accelerated approval pathway for licensure for NanoFlu)
- MGI +7% (reports successful refinancing; entered into a new first lien credit agreement and a new second lien credit agreement)
- QD +3.1% (upsized offering of $300 mln in aggregate principal amount of convertible senior notes due 2026)
- AMC +1.1% (reports Stubs A-List has surpassed 860K members)
- QEP +1.1% (after surging higher in late trade on potential PE deal; follow-up to reports of advanced acquisition talks with Elliott Management)
- TEUM +1% (after negative Viceroy report pushed shares ~20% lower on the day)
- AZN +0.8% (positive overall survival results from Phase III CASPIAN trial with Imfinzi in 1st-line extensive-stage small cell lung cancer)
- ARWR +0.7% (granted FDA Fast Track designation for ARO-AAT for the treatment of rare genetic liver disease associated with alpha-1 antitrypsin deficiency)
Analyst comments:
- AAOI +14.9% (upgraded to Neutral from Sell at Rosenblatt)
- KBH +6.4% (upgraded to Overweight from Sector Weight at KeyBanc Capital Markets)
- CROX +3.7% (upgraded to Buy from Neutral at CL King)
- ABEO +2.7% (initiated with a Buy at Mizuho)
- CTL +2.7% (upgraded to Outperform from Market Perform at Wells Fargo)
- GTLS +1.4% (initiated with a Overweight at Morgan Stanley)
- NVDA +1.4% (initiated with an Outperform at Wedbush)
- SHO +1.2% (upgraded to Outperform from Market Perform at Wells Fargo)
- AMD +0.9% (initiated with an Outperform at Wedbush)
Ex-UBS employee convicted on final insider trading charges
Fabiana Abdel-Malek and Walid Choucair to be sentenced later on Thursday
A former UBS compliance officer and her day-trader friend who were both convicted of insider trading this week have been found guilty of a final set of counts.
A jury at London’s Southwark Crown Court on Thursday delivered guilty verdicts on two outstanding counts against Fabiana Abdel-Malek and Walid Choucair, bringing the eight-week trial — and more than four years of investigation and prosecution by the Financial Conduct Authority — to a conclusion.
The pair will be sentenced later on Thursday. Insider trading carries a maximum seven-year sentence.
The case is the FCA’s only big insider trading trial to reach a jury in three years. In that time, suspicious trades ahead of public takeovers, which can be a red flag of insider trading, have risen to their highest level in the UK since the financial crisis. That has led to worries that a lack of high-profile enforcement against insider trading is partly to blame.
The regulator alleged that Abdel-Malek passed confidential tips on deals UBS was working on to Choucair, who would trade using contracts-for-difference, netting himself £1.4m profit between 2013 and 2014. While the prosecution did not claim Abdel-Malek received any money for passing on inside information, it said Choucair in return gave her access to his gilded lifestyle by taking her to Tramp, the club in London’s West End.
The jury already found Abdel-Malek guilty of passing information to Choucair on deals involving Targa, BRE, Kabel Deutschland and Elizabeth Arden. On Thursday, it found that Abdel-Malek passed confidential tips on North Star Realty to Choucair, who went on to make successful trades.
Their convictions follow an earlier first trial, which resulted in a hung jury in December 2018.
Bitcoin falls sharply after ‘Facebank’ surge
Cryptocurrency slips nearly $2,000 in a matter of minutes
Daniel Shane and Siddarth Shrikanth in Hong Kong and Philip Georgiadis in London 4 MINUTES AGO Print this page161
Bitcoin fell nearly $2,000 in a matter of minutes in a sharp crash, a reminder of the cryptocurrency’s volatility even as it has soared this month to its highest level since last year’s boom-and-bust cycle.
In late New York trading hours on Wednesday, bitcoin fell from $13,850 to under $11,900 in under an hour, according to Refinitiv data. That took some of the sheen off a rally that has seen bitcoin jump from just over $5,000 at the beginning of May, evoking memories of the cryptocurrency’s last boom-and-bust cycle. By Thursday morning in London bitcoin was tumbling again and trading at around $11,500.
Some attributed the slump to a brief shutdown of Coinbase, a San Francisco-based platform which is among the most popular of cryptocurrency exchanges. But Alistair Milne, chief investment officer of the Altana Digital Currency Fund, said that the rapid correction was “inevitable — you simply don’t go up this quickly and sustain it forever, followed by consolidation”.
He added: “This is not 2017’s boom and bust, we haven’t seen new retail investors coming in as we did [then].”
Other digital currencies including Ethereum and Litecoin were also trading lower, according to cryptocurrency information provider CoinDesk, having been swept higher by the euphoria surrounding bitcoin.
Analysts said the bout of enthusiasm for virtual currencies had been stoked by a confluence of factors.
Among the most significant is Facebook’s move into the world of crypto, launching its own currency called Libra in an attack by big tech on the payments industry. Analysts are optimistic that Libra could help cryptocurrencies generally gain more mainstream acceptance, as means of payment and as a store of wealth.
“Adoption is obviously key for this space so the Facebook news is . . . being viewed positively,” said Craig Erlam, senior market analyst at Oanda. Mr Erlam added that bitcoin had struggled for legitimacy among traders since the last crypto bubble burst at the end of 2017, prompting the bitcoin price to plunge about 80 per cent from its peak of more than $19,000.
But analysts cautioned that traders were ignoring crucial differences between Libra and more established digital currencies such as bitcoin. “Libra is backed by a reserve of real assets — such as bank deposits and treasury bills. That gives it intrinsic value,” said Margaret Yang, an analyst at CMC Markets.
She noted that, in theory, that should ensure some stability in its price. Many other major cryptocurrencies, most notably bitcoin, were “backed by nothing”.
Demand for cryptocurrencies is also being fanned by a recent dovish shift by the world’s biggest central banks, say analysts. The US Federal Reserve and the European Central Bank have strongly hinted that they will tilt towards monetary easing in the coming months amid signs the global economy is cooling. Meanwhile, the value of negative-yielding bonds has reached a record high of $13tn globally, increasing the relative appeal of yield-less assets such as gold, whose price has soared to more than $1,400 per troy ounce this week.
Unlike fiat currencies, the supply of new bitcoins is not controlled by any central bank and the number of tokens in circulation is fixed, giving it scarcity value during times of monetary expansion. “Cryptocurrency [is] scarcer in nature than traditional currency, in particular during an era of loose monetary policy,” said Ms Yang.
Geopolitical and global political unrest may also be playing a role in pushing up demand. There has been an increase in tension between the US and Iran in recent days, while an estimated 2m protesters took to the streets in Hong Kong this month demanding the withdrawal of an extradition bill.
“Bitcoin is independent of governments and financial institutions, so the more you see an erosion of trust, the more the demand for bitcoin,” said Mati Greenspan, senior market analyst at eToro, a Tel Aviv-based brokerage. He noted that the local price of bitcoin had recently risen in hotspots of political turmoil, including Hong Kong and Tehran.
Ernest Stern, economist, 1933-2019
A rare talent at the Word Bank who never took stability for granted
Ernest Stern (always known as Ernie) was a dominant figure at the World Bank for two decades. He was that rare individual: a clever economist, who was also a superb manager. As an economist, he was penetrating and pragmatic. As a manager, he was decisive and demanding. As a human being, he was wise and witty. He was simply unforgettable.
Stern, who has died aged 85, described himself as: “a reasonably bright guy and a reasonably good manager, and a reasonably good thinker. I get to the heart of issues quickly. I’m a good analyst, not theoretically but practically. I think I can judge what is feasible.” This was modest, but correct.
He was brought into the World Bank by then chief economist Hollis Chenery in 1972, to help manage the bank’s economics complex. Robert McNamara, president of the bank from 1968 to 1981 soon noticed his effectiveness, appointing him vice-president of the South Asia office in 1975 and putting him in charge of the first World Development Report.
I was privileged to work under Stern on India and then in the team preparing the report. He became a life-long friend. Stern did not suffer those he viewed as fools gladly. Yet he could also be warm and supportive. Many admired him; some found him intimidating. As single-term presidents came and went, after McNamara, Stern represented stability.
In 1980, he became senior vice-president of operations, the most powerful staff position at the bank. He served under AW Clausen, former head of Bank of America, and then under Barber Conable. Conable imposed a chaotic reorganisation at the bank in 1987. In his contribution to its oral history, Stern comments wryly: “Mr Conable once was heard to say . . . that he had to reorganise the World Bank to get rid of Ernie Stern. A strange compliment.”
Stern was moved to the finance division in 1987, until Lew Preston, a former CEO of JPMorgan, became president in 1991. Then he was appointed one of three managing directors, reassuming his dominant role. He served as acting president after Preston’s death in 1995 and retired shortly after.
Stern was born in Frankfurt to observant Jewish parents. The family moved to the Netherlands a year after his birth, in order to escape the Nazis. In 1940, after the German occupation of the Netherlands, they were sent to Bergen Belsen via the Westerbork transit camp. They survived because his father, who was in the metal trade, had managed to obtain a Honduran passport.
Stern said of this experience: “It definitely helped to reinforce the view that very few things are permanent. I don’t take stability for granted.” In 1947, just 14 years old, he was sent to the US on his own to live with an uncle. In 1948 the rest of the family joined him.
He was educated at Queens College in New York and the Fletcher School of Law and Diplomacy, where he studied economics, obtaining his PhD in 1967. He served briefly in the US army and then joined the US Agency for International Development in 1959, serving in Turkey, India and Pakistan. In 1971, he served in the White House Council on International Economic Policy.
During Stern’s era, the World Bank was far and away the world’s most influential development agency. While the role of the private sector as a source of funding was growing, the bank and its affiliate the International Development Association remained the principal sources of long-term development finance, especially for poorer countries.
Stern was the main promoter of structural adjustment lending in the 1980s. It was, he decided, impossible to do good projects in bad environments. The bank had to focus on policies, too — the debt crises of the 1980s made this urgent. So lending shifted towards supporting policy reform, and power moved from project specialists to economists.
Inevitably, these changes created controversy. Stern insisted that adjustment lending was closely linked to poverty alleviation, because most developing countries imposed heavy implicit taxes on farmers, via distorted prices. He was proud, too, of the bank’s role in reorganising extension services for agriculture.
After leaving the World Bank, Stern was a managing director at JPMorgan (later JPMorgan Chase), focusing on relations with emerging countries. In 2002, he joined The Rohatyn Group, retiring in 2011. Nicolas Rohatyn, the group’s founder, describes him as “our éminence grise”. Stern was a member of the Group of 30, an international body of leading financiers and academics, and was associated with the Institute for International Finance and the Center for Global Development.
He died after a long illness, leaving behind his beloved wife, Zina.
Philip Geier Expanded Interpublic Group Into a Global Advertising Giant
Executive made over 200 acquisitions and cultivated enduring ties with leaders of Coca-Cola, Unilever and Nestlé
After earning an M.B.A. degree at Columbia Business School in 1958, Philip H. Geier Jr. felt ready to launch his own business. His early ideas included a toothbrush with toothpaste stowed in the handle, hotel soap with a logo that would remain visible even as the bar shrank, and suntan lotion containing insect repellent.
None of these notions got off the ground. So Mr. Geier tried advertising, a field where his flair quickly became apparent. As a junior ad executive at McCann-Erickson in the early 1960s, he began making powerful friends at Coca-Cola Co. and other giant advertisers that would last for decades.
When McCann sent him to London in 1968 to help run its European operations, he knew he would have to show an ability to bring in British clients. One of his first targets was Britain’s Milk Marketing Board. Mr. Geier buttered up the chairman of the milk board by inviting the chairman’s wife to curate an art exhibit, with cocktails, at McCann’s London office. Soon McCann was creating ads for the milk board.
It was the “Mad Men” era in London as well as Manhattan. In his 2009 memoir, “Survive to Thrive,” Mr. Geier recalled marathon drinking sessions with clients and his decision to hire “a glamorous young lady…wearing a figure-hugging T-shirt and bright red hot pants” to greet visitors to McCann’s London office. For himself, he favored brightly colored dress shirts with white collars.
Mr. Geier, who died June 19 at the age of 84, was known for catering to the global communication needs of giant advertisers including Coca-Cola, Nestlé SA and Unilever . That talent propelled him into the top ranks of Interpublic Group, the parent company for McCann and other ad agencies. He served as Interpublic’s chairman and CEO from 1980 to 2000.
During that period, he oversaw more than 200 acquisitions, including the Lintas and Lowe agencies. Interpublic’s head count grew to 50,000 world-wide from 8,000 and its market value to $12 billion from $500 million.
In 2006, three weeks before his 71st birthday, he had a heart attack on a tennis court in Midtown Manhattan. A cardiac surgeon, who happened to be nearby, saved him. Months later Mr. Geier received a heart transplant that allowed him to return to the tennis court and tend to his philanthropic interests, including Autism Speaks and Save the Children.
Philip Henry Geier Jr. was born Feb. 22, 1935, the first of six sons, and grew up in Hunting Valley, a suburb of Cleveland. His father ran a vacuum-cleaner company and later sold insurance. His mother, he wrote, was the family leader, “a great skier, tennis player, dancer and flirt.”
He chose Colgate University because a girlfriend was studying nearby. He earned an economics degree there in 1957. He also earned the nickname “Deals” at Colgate for setting up businesses, including sales of sandwiches to fraternity boys and a car service to New York. He dated Joan Bennett, who later married Ted Kennedy, and bartered bottles of Scotch whisky for tutoring in statistics.
When he became a trainee at McCann in Cleveland, he expected to stay in advertising only for a few years to explore career alternatives, but he soon was promoted to the New York office and found he was in his element working on accounts including Nabisco cookies and Philip Morris cigarettes.
Arriving at the London office in 1968, he was shocked to find all the desks empty at 9:15 a.m. on a Monday. Managers “sauntered in around 10,” he wrote, and creative people turned up even later.
“Cocktails in the agency started at five, after which the creatives invariably headed to the nearest pub, and the account guys took clients out for dinners that usually stretched past 11 p.m.,” he recalled.
One potential client, a fitness buff, challenged him to a 12-mile race, offering to give him a three-mile head start. Mr. Geier had less than two weeks to train and was passed by his rival 30 yards from the finish line. Even so, the client was sufficiently impressed with Mr. Geier’s effort to award business to McCann.
In 1979, Interpublic announced Mr. Geier would become CEO the next year. Soon afterward, two colleagues defected to form the rival agency Backer & Spielvogel. The new firm promptly poached the Miller beer account, which had accounted for the bulk of profits in McCann’s New York office.
Noting McCann’s wounds, other big clients said they might bolt. Profit fell 9% during Mr. Geier’s first year as CEO but he managed to appease major clients and win new business.
In 1985, he worked with Coca-Cola Co. on its introduction of New Coke, a sweeter version of the soft drink. After it bombed, Coca-Cola pivoted three months later by reintroducing Coke Classic. Sales rapidly recovered. Mr. Geier said the lesson was clear: When customers are “mad at you, act fast to appease them.”
Influenced by his wife, the former Faith Power, Mr. Geier collected contemporary art. In the 1980s, he adorned Interpublic’s Manhattan offices with works including a Bruce Nauman neon sculpture and a mural by Sol LeWitt. Some Interpublic directors questioned the expense. He hired an appraiser, who reported that Interpublic was making a good return on the investment.
Faith Geier died in 2009. In 2013, he married Julie Ann Weindling. Along with her, his survivors include two daughters and four grandchildren.
FCA seeks to ‘give teeth’ to forex trading code with endorsement
UK regulator backs code of conduct in attempt to boost adoption
The UK’s financial regulator has endorsed a voluntary code outlining good conduct in currency trading for the first time, in a move intended to boost compliance among senior bankers and investors.
A code of conduct covering currencies trading was drawn up by central banks and market participants in 2017, but on Wednesday the Financial Conduct Authority explicitly linked it to its Senior Managers and Certification Regime, which holds senior bankers accountable for bad practice and which will be extended to asset managers in December.
The regulator has no official oversight of the $5.1tn-a-day currencies market and it will not supervise individuals or companies directly against the guidelines. But with the link to the SM&CR, the regulator is hoping to “give teeth” to the voluntary code.
The FX Global Code of Conduct was created by 16 central banks and the private sector following a mandate by the Bank for International Settlements to draw up new standards for good conduct in currencies market after allegations of misconduct and hefty fines on banks. The document was published in 2017 and since then the European Central Bank has insisted that its currency-trading counterparts sign up to the principles.
While the majority of major banks and dealers have signed up to adhere to the code, industry participants say take-up from investors has been slow.
Andrew Hauser, executive director for markets at the Bank of England, welcomed the FCA’s decision and said the move provides “another, wholly positive reason” to sign up to the code as it helps to build trust in financial markets and enhances corporate governance. “We still have further to go — particularly amongst the asset management community,” he said.
Early premarket gappersGapping up:
- MLHR +12.9%, VRCA +10.8%, MGI +10.1%, OFG +8.7%, KBH +6.2%, QD +2.8%, ABEO +2.7%, TEUM +2%, WBA +1.6%, APOG +1.5%, AMD +1.4%, WTI +1.3%, AMC +1.1%, QEP +1.1%, FIZZ +0.9%, GMS +0.9%, AZN +0.8%
Gapping down:
- ACRS -32.6%, MOTS -13.2%, RAD -10.5%, ZYXI -7.5%, FUL -6.5%, OSTK -4.4%, PDCO -4.3%, RMR -3.7%, MKC -3.1%, WOR -2.8%, BA -2.3%, GMDA -2.3%, NG -1.6%, WAGE -1.3%, ACN -1.3%, IMGN -1%