Friday, July 21, 2017

China's former 'King of IPOs' has been found guilty of corruption

China's former 'King of IPOs' has been found guilty of corruption

LONDON – Yao Gang, the former vice chairman and second-in-command at China's securities regulator, the China Securities Regulatory Commission (CSRC), has been found guilty of corruption. 
A two-year investigation by China's anti-corruption watchdog, the Central Commission for Discipline Inspection, found Gang had "violated party discipline," and was guilty of "abusing his power to seek benefits and accepted huge amounts of money."
Gang has been removed from office and expelled from the Communist Party.
He became Deputy Director and Director of the Futures Supervision Department of the CSRC in 1993, and was made Vice Chairman in 2008.
His role included approving applications for initial public offerings (IPO) — in which shares of a company are sold to the public for the first time — which earned him the nickname "King of IPOs" for how quickly he processed applications.
He then moved to overseeing fixed income and futures markets.
But a crash in the Chinese stock market in 2015, which saw it lose $5 trillion in value, prompted an investigation. The crash was found to have been due in part to financial speculation and short sellers, and Gang's former secretary was found guilty of insider trading.
An investigation into Xiang Junbo, previously one of China's top banking regulators, was also begun earlier this year.

Thursday, July 20, 2017

Qualcomm's profit slumps amid legal battle with Apple

Qualcomm's profit slumps amid legal battle with Apple

ip6 Touch ID fingerprint sensor iPhone 5CGetty/Lintao Zhang
Qualcomm reported a 40 percent slump in quarterly profit as its escalating patent battle with Apple took a toll on its business.
Shares of the company were down 2.3 percent at $55.40 after the bell on Wednesday.
The chipmaker said its results took a hit as Apple's contract manufacturers did not pay royalties due on sales of Apple products.
There has been long-running tension between the company and the iPhone maker over Qualcomm's practice of taking a cut of the total price of the phone in exchange for modem chips, which connect phones to wireless networks.
Apple first sued the chipmaker in January, accusing it of overcharging for chips and refusing to pay some $1 billion in promised rebates.
Since then both companies have filed a series of lawsuits against each other.
Qualcomm's patent-licensing practices have also come under scrutiny from governments across the world and other customers.
The company said third-quarter results included a reduction in operating cash flow due to a $940 million payment to BlackBerry and a $927 million payment related to the Korea Free Trade Commission (KFTC) fine, in addition to the payments withheld by Apple to its contract manufacturers.
Qualcomm forecast current-quarter adjusted profit of 75 cents to 85 cents per share and revenue of $5.4 billion to 6.2 billion.
Analysts were expecting an adjusted profit of 90 cents per share and revenue of $5.48 billion, according to Thomson Reuters I/B/E/S.
Net income attributable to the company fell to $866 million, or 58 cents per share, in the third quarter ended June 25 from $1.44 billion, or 97 cents per share, a year earlier.
Revenue fell 11.1 percent to $5.4 billion.
Excluding items, the company earned 83 cents per share. Analysts had expected a profit of 81 cents per share.
(Reporting by Rishika Sadam in Bengaluru; Editing by Anil D'Silva)

Read the original article on Reuters. Copyright 2017. Follow Reuters on Twitter.
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The hedge fund that turned Whole Foods into a takeover target for Amazon is walking away with $300 million

The hedge fund that turned Whole Foods into a takeover target for Amazon is walking away with $300 million

FILE PHOTO - Barry Rosenstein, founder and managing Partner of JANA Partners LLC., speaks during the Sohn Investment Conference in New York May 4, 2015. REUTERS/Brendan McDermidNot bad for a couple months' work. Pictured: Jana Partners founder Barry Rosenstein. Thomson Reuters
Jana Partners is getting paid handsomely for its effort to push Whole Foods into making some changes, a drive that led to the company's sale to Amazon.
The activist hedge fund, which bought a more than 8% stake in Whole Foods in early April, liquidated its stake in organic grocer following Amazon's $13.7 billion offer and will walk away with a $300 million profit, according to documents filed with the Securities and Exchange Commission Wednesday.
Jana, run by billionaire Barry Rosenstein, wasted no time putting the heat on Whole Foods CEO John Mackey and agitating for a management overhaul. Mackey and his team responded by hiring a top defense banker from Evercore, setting in motion the events that would lead only weeks later to a buyout offer from Amazon. 
Jana started unloading shares not long after Amazon and Whole Foods announced their $42-a-share deal on June 16. Whole Foods shares began to creep above the deal price after the announcement as investors wagered that a rival bid would emerge, but Jana's decision to exit is a clear indication the $5 billion fund didn't expect one.
After the weekend, on June 19, Jana began hedging its bets, selling 1 million shares at over $43 a per share, according to a filing with the SEC. The fund continued selling shares above the deal price throughout June, unloading 2.8 million in total for $120.8 million.
By July, it became clear that no rival bidder would emerge. An SEC filing on July 7 revealed that there had been seven companies vying for Whole Foods, including to grocery rivals, but that Amazon had insisted on avoiding a bidding war and demanded secrecy from Whole Foods while the deal was negotiated. 
Shares slipped back down toward the deal price, and Jana began liquidating the rest of its more than 26 million shares. 
Jana, which bought its stake for $794.5 million in April, sold its shares for $1.09 billion, netting $298.1 million — a 38% return.
Not bad for a couple months' work.

WFMSharesMarkets Insider

American Express profits slump on higher costs but beat estimates

American Express profits slump on higher costs but beat estimates

AXP American Express
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July 19 (Reuters) - American Express Co's profit fell less than expected in the second quarter, as higher spending by card members made up for increased costs from offering rewards.
AmEx said card member spending was up 8 percent in the second quarter ended June 30, when adjusted for currency changes and the impact of losing a longtime partnership with warehouse club retailer Costco Wholesale Corp.
Discount revenue, which makes up the bulk of AmEx's total revenue and represents fees paid by merchants to the company, was flat at $4.82 billion.
However, net income attributable to shareholders fell to $1.31 billion, or $1.47 per share from $1.98 billion, or $2.10 per share, partly reflecting the loss of the Costco partnership as well as a $1 billion gain in the year-ago quarter on the sale of the related loan portfolio.
Analysts on average had expected a profit of $1.43 per share, according to Thomson Reuters I/B/E/S.
But the drop in net income was also the result of a 21 percent jump in total expenses.
New York-based AmEx has increased spending on rewards to prevent its generally affluent clientele from switching to JPMorgan Chase & Co and Citigroup Inc, which have rolled out lucrative rewards to woo customers as they seek to boost their credit card businesses.
For JPMorgan and Citi, post-financial crisis regulations have made the credit card business more profitable than businesses such as mortgages and capital markets trading.
Both companies reported upbeat results in their card businesses in their earnings last week.
AmEx said it spent $1.93 billion on card member rewards in the second quarter, up 9 percent from a year earlier.
Total revenue, net of interest expense, rose 1 percent to $8.3 billion in the quarter.
(Reporting by Pallavi Dewan and Nikhil Subba in Bengaluru; Editing by Sai Sachin Ravikumar)
Read the original article on Reuters. Copyright 2017. Follow Reuters on Twitter.

GOLDMAN SACHS: Bitcoin is going to test $3,000 and could get as high as $3,700

GOLDMAN SACHS: Bitcoin is going to test $3,000 and could get as high as $3,700

BitcoinAttendants pose with a bitcoin sign during the opening of Hong Kong's first bitcoin retail store. Reuters/Bobby Yip
Bitcoin has held strong support and has its sights set on a test of the $3,000 level, according to Goldman Sachs.
In a note sent out to clients on Monday, Sheba Jafari, the head of technical strategy at the bank, updated her recent chart work on the cryptocurrency.
The $1,856 to $1,790 area "has the potential to act as strong support," Jafari wrote. "All in all, the balance of signals appear to be shifting to a more positive tone."
Jafari's latest note comes two weeks after she predicted the cryptocurrency was setting up for a big drop.

At the time of her call, bitcoin was trading near $2,550 a coin. She said that bitcoin was "still in a corrective 4th wave" that "shouldn't go much further than 1,857." It fell a bit further, putting in a low somewhere between $1,758 or $1,852 (depending on which data you use).

Jafari, however, always expected the gains would resume after the correction.

And that they have.
Bitcoin has gained more than 20% from its July 17 low, and currently trades near $2,285. As to how far bitcoin can go from here, Jafari expects another run at record highs. "The minimum target for an eventual Vth wave from current levels is 2,988; an extended 5th could reach ~ $3,691."
Bitcoin is up 140% in 2017. It put in a record high of about $3,000 on June 12. 
BitcoinGoldman Sachs


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Wednesday, July 19, 2017

Google and Facebook still use the 3-word question that saved a $225 billion company in the 1970s

Google and Facebook still use the 3-word question that saved a $225 billion company in the 1970s

Procter and Gamble headquartersAnyone can ask them.AP
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Min Basadur was working as a creative manager at Procter & Gamble in the mid-1970s when he got a call from a team in product development.
"We need some help," Basadur remembers the team leader telling him. "We feel like a bunch of failures."
For six months, the team had been struggling to come up with a product that could beat Irish Spring, a new and popular soap bar from Colgate. As Colgate's market share increased, Procter & Gamble knew it was only a matter of time before its market share dwindled.
One day later, the team would have a creative breakthrough, thanks largely to Basadur and his use of three words: How might we?
Here was the issue: Irish Spring featured green and white stripes; a television advertisementshowed a man showering with the soap bar in a meadow and feeling refreshed. The Procter & Gamble team couldn't seem to come up with a soap bar that beat Irish Spring in a blind test of consumers.
Basadur arranged to hold a daylong session with the team. He started with the problem it had been working on for six months: creating a better green-striped soap bar.
The key question, as the team saw it, was how to make a better green-striped bar. Then Basadur asked another question: "Why might we want to make a better green-striped bar?" The answer was that they'd lost market share.
"Why else might we want to create a green-striped bar?" Basadur asked the team. He encouraged his colleagues to think from the consumer's perspective.
One person came up with an answer: "We'd like to make people feel more refreshed."
"That was the aha moment," Basadur told Business Insider. "We had redefined the problem — and that was the secret to the process."
Now the problem was: "How might we make a more refreshing bar?"
That afternoon the team came up with about 200 possible answers to the question, and it settled on the idea of creating a bar that reminded people of the beach or the seacoast.
Soon Procter & Gamble debuted its soap bar, "Coast," featuring swirly blue stripes. It beat Irish Spring in the blind test.
You can still find Coast and Irish Spring on the market today — along with many similar products from competitors. Procter & Gamble currently has a market value of $225 billion. (You can read the full "Irish Spring story" on Basadur's website.)
This process — specifically the "how might we" question format — has since spread to companies including Ideo, Facebook, and Google, according to Harvard Business Review. Basadur, who is now a business consultant, has been teaching the process at organizations for 40 years.
As Ideo's global head of talent, Duane Bray, told Quartz: "HMW [how might we] questions are freeing amidst uncertainty because they allow clients to mentally reset, and reframe a problem as an opportunity."
Basadur told Business Insider why his process worked: "What most people did and still do to this day is they jump from what we call a fuzzy situation immediately into solutions. They miss that internal step, which was: Get some facts about it and create challenges starting with the phrase 'How might we?'"
In other words, most of us try to fix a problem as fast as possible without stopping to think about what the problem really is.
Most important, Basadur said, when you take a step back before jumping into solutions, you're "deferring judgment."
When someone says, "I've got an idea," Basadur said, we often respond with, "That's a good idea, but …" We'd do better, he said, to respond with, "I like that idea and I'd like to build on your idea and make it even better."
Defining the problem is the third step in an eight-step process that Basadur uses in his work with organizations. The process runs all the way from problem formulation to solution implementation.
Defining the problem is somewhat similar to the second step in a process called "design thinking," developed by Stanford engineers, when you ask yourself, "Which question are you going to answer?" The idea behind both is to pause and think critically before leaping into potential fixes.
Interestingly, Basadur said it wasn't his deep knowledge of the personal-care industry that enabled him to help develop Coast.
"I didn't know anything about soap bars," he said. "But I just knew how to count" — specifically, how to count the eight steps in his process. "By leading them through that methodology, out popped the answer."
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