Supreme Court ruling moves retail stocks

Physical retailers rise, online retailers drop after Supreme Court tax ruling

Supreme Court ruling moves retail stocks, Stockwinners
Supreme Court ruling moves retail stocks, Stockwinners

Shares of brick-and-mortar retailers are rising, while shares of e-commerce firms are slipping, after the Supreme Court ruled that online retailers can be required to collect sales taxes in states where they have no physical presence.

SUPREME COURT RULING

On Thursday, the Supreme Court sided with the state of South Dakota in a fight it brought against Wayfair (W) to require a business that has no physical presence in the state to collect its sales tax.

Supreme Court ruling moves retail stocks, Stockwinners
Supreme Court ruling moves retail stocks, Stockwinners

The Supreme Court ruled in a 5-to-4 vote that a 1992 judgement in Quill Corporation v. North Dakota regarding the physical presence rule was “unsound and incorrect,” according to a judgement posted to the high court’s website.

Justice Anthony Kennedy, in writing for the majority opinion, said the Quill decision had distorted the economy and resulted in states losing annual tax revenues between $8B-$33B.

“Quill puts both local businesses and many interstate businesses with physical presence at a competitive disadvantage relative to remote sellers,” he wrote.

“Remote sellers can avoid the regulatory burdens of tax collection and can offer de facto lower prices caused by the widespread failure of consumers to pay the tax on their own.”

WHAT’S NOTABLE:

Following the ruling, industry trade organization National Retail Federation issued a statement saying,

“Retailers have been waiting for this day for more than two decades. The retail industry is changing, and the Supreme Court has acted correctly in recognizing that it’s time for outdated sales tax policies to change as well.

This ruling clears the way for a fair and level playing field where all retailers compete under the same sales tax rules whether they sell merchandise online, in-store or both.”

ANALYST COMMENTARY

KeyBanc analyst Edward Yruma called the ruling a negative for Wayfair, arguing that it may reduce some of the price differential that has helped it gain share from traditional peers.

The ruling is also a negative, but to a lesser degree, for eBay (EBAY) and Etsy (ETSY), said Yruma, who views the impact on those two as more related to compliance and implementation.

He adds that the news could be a modest positive for retailers of high-ticket and branded products, such as Best Buy (BBY), Home Depot (HD), Lowe’s (LOW), La-Z-Boy (LZB), Kirkland’s (KIRK), RH (RH) and Williams-Sonoma (WSM).

PRICE ACTION

At Thursday midday, Target (TGT) rose 1.8%, Walmart (WMT) was up 0.7%, Costco (COST) rose roughly 1.1% while Amazon (AMZN) was down 0.4%, Etsy dropped about 2.5%, eBay fell 1.4% and Wayfair (W) was down 1.2%.

In addition, Avalara (AVLR), a software company focused on automated tax compliance that recently held its initial public offering, gained 17.1%.


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Oracle lower after losing business to Amazon, Microsoft

Oracle slides as JPMorgan cuts rating on business lost to Amazon, Microsoft

Oracle slides as JPMorgan cuts rating on business lost to Amazon, Microsoft , Stockwinners
Oracle slides as JPMorgan cuts rating on business lost to Amazon, Microsoft ,

Shares of Oracle (ORCL) are sliding after JPMorgan analyst Mark Murphy downgraded the stock to Neutral, citing negative results from a survey of Chief Information Officers about their spending.

The analyst noted that the survey showed spending contraction ahead as Oracle’s databases are being unplugged in favor of Microsoft (MSFT) and Amazon (AMZN) databases.

SURVEY SAYS

In a research note this morning, JPMorgan’s Murphy downgraded Oracle to Neutral from Overweight as specific metrics in the firm’s large-scale CIO survey have arced over into negative territory.

The analyst told investors that while Oracle’s shares have risen from the $30s into the high $40s in the last 2 years, the company’s fundamental performance has remained inconsistent. Citing his survey of 154 CIOs, Murphy noted that Oracle received the largest number of indications for planned spending contraction this year, materially more than the second-worst company, which was IBM (IBM) with 25 indications of spending contraction.

Further, while ranking the top 8 or 9 mega-vendors in terms of who will be most critical and indispensable to CIOs’ IT environment in the future, Oracle only received 6.5% of votes, down from 11% in previous surveys, the analyst highlighted.

At the same time, Murphy pointed out that Amazon AWS improved from 9.5% of votes last year to 14.9% of votes this year, creating the appearance of a “sucking sound” out of Oracle and into AWS.

The company also ranked number 8 in terms of association with Digital Transformation projects, disappointing relative to its scale and lagging behind the likes of SAP (SAP), IBM, and Cisco (CSCO), he added, noting that despite Oracle’s efforts to build a Cloud presence, it rated no better than SAP in terms of association with Cloud Computing plans, and is nowhere close to the leaders Microsoft, Amazon, and Google (GOOGL; GOOG) in this respect. Oracle was mentioned by only 2% of the CIOs as the platform that will be “most integral” to their cloud computing plans, Murphy said.

Overall, the analyst questions where Oracle’s business and stock are heading in the next couple of years if the largest-scale CIO survey shows Oracle now has negative spending intentions, is lagging in Digital Transformation projects, is trailing in Cloud Computing plans, its databases are being unplugged in favor of Microsoft and Amazon databases, its applications are being unplugged in favor of Salesforce (CRM) and Workday (WDAY) applications, and customers are weary of its unpopular commercial tactics.

Murphy also lowered his price target on Oracle’s shares to $53 from $55.

WHAT’S NOTABLE

In a research note of his own, Nomura Instinet analyst Christopher Eberle lowered his price target for Oracle to $60 from $64 ahead of the company’s fourth quarter results on June 19.

The analyst trimmed his estimates to account for currency and expectations for more modest revenue acceleration in fiscal 2019. He remains optimistic, however, on Oracle’s transition and model growth reacceleration as the year progresses. Eberle reiterated a Buy rating on the shares.

PRICE ACTION

In Wednesday’s trading, shares of Oracle dropped almost 5% to $46.14.


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Rockwell Automation to make $1B investment in PTC

Rockwell Automation to make $1B equity investment in PTC

Rockwell Automation to make $1B equity investment in PTC, Stockwinners
Rockwell Automation to make $1B equity investment in PTC

PTC (PTC) and Rockwell Automation (ROK) announced that they have entered into a definitive agreement for a strategic partnership that is expected to accelerate growth for both companies and enable them to be the partner of choice for customers around the world who want to transform their physical operations with digital technology.

As part of the partnership, Rockwell Automation will make a $1B equity investment in PTC, and Rockwell Automation’s Chairman and CEO, Blake Moret, will join PTC’s board of directors effective with the closing of the equity transaction.

Under the terms of the agreement relating to the equity investment, Rockwell Automation will make a $1 billion equity investment in PTC by acquiring 10,582,010 newly issued shares at a price of $94.50, representing an approximate 8.4% ownership interest in PTC based on PTC’s current outstanding shares pro forma for the share issuance to Rockwell Automation.

The price per share represents an 8.6% premium to PTC’s closing stock price on June 8, 2018, the last trading day prior to today’s announcement.

Rockwell Automation intends to fund the investment through a combination of cash on hand and commercial paper borrowings.

Rockwell Automation will account for its ownership interest in PTC as an Available for Sale security, reported at fair value.

As separately announced today, Rockwell Automation is increasing its share repurchase target for fiscal year 2018 to $1.5 billion.

This represents a $300 million increase to its previous plans to repurchase $1.2 billion of its stock in fiscal year 2018.

The investment transaction is subject to customary closing conditions and regulatory approvals, and is expected to close within 60 days.

PTC Inc. develops and delivers software products and solutions worldwide.


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Mitel sold for $2 billion

Mitel to be acquired by Searchlight Capital Partners affiliates for $2B in cash

Mitel sold for $2 billion. Stockwinners
Mitel sold for $2 billion. Stockwinners

Mitel (MITL) announced that it has signed a definitive arrangement agreement to be acquired by an investor group led by affiliates of Searchlight Capital Partners in an all-cash transaction valued at approximately $2B, including Mitel’s net debt.

Under the terms of the agreement, to be completed pursuant to a plan of arrangement, upon completion Mitel shareholders will receive $11.15 per common share in cash.

This exceeds Mitel’s 52-week and last three-year-high price and represents a premium of approximately 24% to the 90-calendar-day volume-weighted average price of Mitel common shares through April 23, 2018.

Upon completion of the transaction, Mitel will become a privately held company, which is expected to provide the company with additional flexibility to accelerate its move-to-the-cloud strategy.

The Mitel Board of Directors has unanimously determined that the transaction is in the best interests of Mitel and fair to Mitel shareholders, and will recommend that Mitel shareholders approve the arrangement. The arrangement is not subject to a financing condition.

The transaction is expected to close during the second half of 2018, subject to customary closing conditions, including receipt of shareholder, regulatory and court approvals.

The arrangement agreement includes a 45-day “go-shop” period, which permits Mitel’s Board of Directors and advisors to actively solicit, evaluate and potentially enter into negotiations with parties that make alternative acquisition proposals through June 7, 2018.

There can be no assurance that this process will result in a superior offer.

Mitel does not intend to disclose developments with respect to the solicitation process unless and until the Board of Directors makes a determination requiring further disclosure. Jefferies LLC is serving as financial advisor to Mitel.

Paul, Weiss, Rifkind, Wharton & Garrison LLP and Osler, Hoskin & Harcourt LLP are serving as legal advisors to Mitel. National Bank Financial Inc. is serving as independent financial advisor to the Mitel Board of Directors and provided a fairness opinion to the Mitel Board of Directors on a fixed fee basis.


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Barron’s is bullish on GM and Delta

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:

Stockwinners offers Barron's review of Stockwinners offers stocks to buy, stocks to watch, upgrades, downgrades, earnings, Stocks to Buy On Margin
Stockwinners offers Barron’s review of stocks to buy

BULLISH   MENTIONS:

Delta, GM look cheap, with growth potential – While a solid start to earnings season helped push share prices higher earlier this week, some remain deeply discounted, Jack Hough writes in this week’s edition of Barron’s. Despite Delta Air Lines’ (DAL) pessimistic valuation, consolidation has left only a handful of key players and the company faces less competition in key markets than some of its peers, the report adds. Additionally, Goodyear Tire (GT), General Motors (GM) and Lincoln National (LNC) also made the valuation cutoff, Hough says.

General Mills shares fall to ‘bargain territory.’  – General Mills (GIS) has fallen 27% so far this year and while the drop seems deserved because earnings growth has stalled, a closer look suggests sales trends are improving, thanks in part to new-product launches, Jack Hough writes in this week’s edition of Barron’s.

Cruise operators can offer ‘nice’ yields, solid dividend growth – Cruise operators, like Carnival (CCL), Royal Caribbean (RCL) and Norwegian Cruise Line (NCLH), can offer nice yields and solid dividend growth, but economic downturns can pressure payouts, Lawrence Strauss writes in this week’s edition of Barron’s. Another option for investors looking for yield among cruise operators is Walt Disney (DIS), the report added. The entertainment company has a wide variety of holdings, and while its cruise business did not account for a large portion of its $55B of sales last year, it is not insignificant either.

Tech giants may make own custom chips to get edge on one another. – There has been a tension between the world’s largest tech companies- Alphabet (GOOG; GOOGL), Amazon (AMZN), Facebook (FB), Apple (AAPL), Microsoft (MSFT), Baidu (BIDU), and Alibaba (BABA)-and the chip companies they rely on, especially Intel (INTC) and Nvidia (NVDA), Tiernan Ray writes in this week’s edition of Barron’s. While the giants buy massive quantities of Intel’s microprocessors, and Nvidia’s graphics chips, or GPUs, to power their data centers, they are also in an arms race to have the best artificial-intelligence-based machine-learning functions, the report noted, adding that there was always the possibility they may decide to buy fewer off-the-shelf parts and make their own custom chips to get an edge on one another.

 MPL valuations look cheap – Master limited partnerships’ valuations appear cheap, and U.S. energy production is thriving, lifting cash flows for pipeline firms, Darren Fonda writes in this week’s edition of Barron’s. MLP, such as Enterprise Products Partners (EPD), Magellan Midstream Partners (MMP), MPLX (MPLX), Plains All American Pipeline (PAA), could reward investors with higher yields as cash flows rise, Fonda adds.

OTHER MENTIONS

Trump’s tweets politicize U.S. markets, Barron’s says – With President Donald Trump, both politics and business appear personal as he continues his tweets aimed at individual companies, Vito Racanelli writes in this week’s edition of Barron’s. Before and after the election, he consistently aimed arrows at Amazon.com (AMZN) and at the proposed acquisition of Time Warner (TWX) by AT&T (T), the report noted. The President is not alone in singling out companies, Racanelli points out, adding that Democratic candidate Hillary Clinton also took issue with Mylan’s (MYL) price increases for its EpiPen. Maybe it is a sign of the times, but the rise of powerful social-media platforms is the key enabling factor, the report said.


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Twitter is urged to combat fake news

Twitter investors urge it to report on steps it’s taking to combat fake news

Twitter is urged to combat fake news; Stockwinners
Twitter is urged to combat fake news;
A group of Twitter (TWTR) shareholders is urging the company for an update on how it is fighting fake news, abuse, and to specify the regulatory risk it faces.

 

Twitter’s board responded that the company is “taking action.”

 

The New York State Retirement Fund and Arjuna Capital have filed a shareholder proposal that would encourage Twitter to put together a detailed report about how well it’s doing enforcing its social network’s terms of service, the company disclosed in a regulatory document on Wednesday.
The shareholders are also urging the company to include in the report the possible financial and other risks it faces from fake news and similar controversies.
“Shareholders are concerned that Twitter’s failure to address these issues proactively has created regulatory, legal, and reputational risk,” the investors said in their proposal.
“We believe Twitter has an obligation to demonstrate how it manages content to prevent violations of its terms of service. Yet, disclosures have been inadequate.”
Twitter also noted its statement of opposition, saying “Our board of directors has considered this proposal and, for the reasons described below, believes that adopting this proposal is not in the best interests of Twitter and our stockholders and unanimously recommends that you vote ‘AGAINST’ this proposal.
Our board of directors and management have devoted, and continue to devote, significant effort to ensure that we are aware of and able to properly address public policy issues of importance to our business.
Because we believe that the issues raised in the proposal are or have already been addressed as part of our ongoing business operations through our existing robust systems, structures, processes and controls, with significant oversight from our board of directors and management at the highest levels, we do not believe that establishing a separate public policy committee of the board of directors is necessary.”

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Elliott Management discloses 10.3% stake in Commvault

Elliott says intends to nominate four candidates to Commvault board

Elliott says intends to nominate four candidates to Commvault board. Stockwinners
Elliott  to nominate four candidates to Commvault board. Stockwinners

Elliott Management Corporation, which manages funds that collectively own 10.3% of common stock and economic equivalents of Commvault Systems (CVLT), released a letter announcing its intention to nominate four candidates to the Commvault Board.

In addition, the letter outlined a path forward for Commvault to create significant shareholder value through fundamental improvements in the company’s execution, operations, capital allocation and governance.

Elliott stated in the letter that it is looking forward to constructive engagement with the company and optimistic about developing a mutually supported path forward. Elliott’s board nominees include Martha Bejar, Wendy Lane, John McCormack and Chuck Morgan.

PRICE  ACTION

CVLT stock was last up over 9.6% to $62.70. At that price next resistance is at $64.60, the 52-week high.


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Polycom sold for $2 billion

Plantronics to acquire Polycom for $2B in cash, stock deal

 Plantronics to acquire Polycom for $2B. Stockwinners.com
Plantronics to acquire Polycom for $2B.

Plantronics (PLT)  and Polycom announced that they have entered into a definitive agreement under which Plantronics will acquire Polycom in a cash and stock transaction valued at $2B enterprise value.

The transaction has been unanimously approved by the boards of directors of both companies, is subject to regulatory approvals and other customary closing conditions, and is expected to close by the end of the third calendar quarter of 2018. With the acquisition of Polycom, Plantronics will become the partner of choice for the communications and collaboration ecosystem.

Polycom, a privately held company, brings a global leadership position in voice and video collaboration, accelerating Plantronics vision of delivering new communications and collaboration experiences.

With the addition of Polycom, Plantronics will have the broadest portfolio of complementary products and services across the global communications and collaboration ecosystem, and the ability to create exceptional user experiences.

The combination positions Plantronics to capture additional opportunities across the $39.9B Unified Communications and Collaboration industry driven by innovation in video and the ubiquity of audio, building growth opportunities through data analytics and insight services.

Polycom significantly expands Plantronics services offering, providing a meaningful presence in management and analytics services.

The transaction is expected to be immediately accretive to Non-GAAP EPS. Plantronics targets achieving annual run-rate cost synergies of $75M within 12 months of transaction close.

Under terms of the definitive agreement, Plantronics will acquire Polycom for $2B enterprise value consisting of an estimated $690M of net debt and an estimated $948M in cash and 6.352M Plantronics shares, valued at $362M based on the 20 trading day average closing price of Plantronics stock prior to signing, resulting in Polycom shareholders owning approximately 16.0% of the combined company.

Estimated amounts are subject to customary post-closing adjustments per the definitive agreement. Frank Baker, Founder and Managing Partner, Siris Capital, and Daniel Moloney, Executive Partner, Siris Capital, will join Plantronics Board of Directors.

Plantronics intends to fund the cash portion of the consideration with cash on hand and approximately $1.375B in new, fully-committed debt financing. Wells Fargo Bank and affiliates have committed to provide the debt financing for the transaction, subject to customary conditions. P

lantronics expects to pay down a significant portion of the debt within the next several years with cash on the balance sheet and through cash generation.


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Netflix introduces PIN protection, Shares jump

Netflix introduces PIN protection, enhancements for ‘informed’ viewing

Disney loss having minimal impact on Netflix subscribers. See Stockwinners.com Market Radar to read more
Netflix introduces PIN protection, enhancements for ‘informed’ viewing

Mike Hastings, a director of enhanced content at Netflix (NFLX), said in a blog post: “At Netflix, we offer a wide variety of series and films catering to an equally broad variety of tastes and sensibilities.

With that in mind, we are improving some long-standing Netflix features that provide members with the information and tools they need to make wise decisions about what’s right for themselves and for their families.

We’re rolling out these improvements across the many devices used by Netflix members, and across our global markets, in the coming months. The first change involves introducing a PIN parental control for individual movies and series to give parents and guardians more specific control over what children can watch on the service.

We understand that every family is different and that parents have differing perspectives on what they feel is appropriate to watch at different ages.

While we already provide PIN protection for all content at a particular maturity level for Netflix accounts, PIN protection for a specific series or film provides families with an additional tool to make decisions they are comfortable with.

In addition, we will also begin displaying more prominently the maturity level rating for a series or film once a member hits play on a title. While these maturity ratings are available in other parts of the experience, we want to ensure members are fully aware of the maturity level as they begin watching.

We are also continuing to explore ways to make this information more descriptive and easier for our members to understand with just a quick glance. One of the great benefits of internet TV is that it allows for amazing variety and provides viewers with complete control over their experience.

At Netflix, we are proud to create and deliver to our members a large catalog of compelling stories crossing many genres from all over the world, while also giving them great control over how and when to enjoy them.

These latest steps are part of our continuous efforts to keep members better informed, and more in control, of what they and their families choose to watch and enjoy on Netflix.”

NFLX is up $11.0 to $312.89.


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Barron’s in bullish on Dropbox IPO

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:

Stockwinners offers Barron's review of Stockwinners offers stocks to buy, stocks to watch, upgrades, downgrades, earnings, Stocks to Buy On Margin
Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH   MENTIONS: 

Advertising companies cheaper than usual – After a tumble last year, shares of advertising companies such as Interpublic Group (IPG), Omnicom Group (OMC), Publicis Group (PUBGY), and WPP (WPP) are cheaper than usual relative to earnings, and business appears to be picking up, Jack Hough writes in this week’s edition of Barron’s. That is an opportunity for value investors, the report adds.

Quantum computing soon to be reality – Microsoft (MSFT) predicts that in five years there will be practical quantum computers, Tiernan Ray writes in this week’s edition of Barron’s. But there may be implications worth pondering, the report notes. As quantum computing grows nearer, it could ripple through technology and the race for innovative chips, software and cloud computing could be affected, Ray contends, adding that the companies that shoulder risk and reward include Intel (INTC), Nvidia (NVDA), Micron Technology (MU), Microsoft, Alphabet (GOOG; GOOGL) and Amazon (AMZN).

Dropbox IPO bodes well – In a follow-up article after Dropbox (DBX) filed a prospectus with the Securities and Exchange Commission for an initial public offering that could raise as much as $500M, Barron’s notes that the company has a private-market value of about $10B, making it one of the most valuable unicorns. A successful deal could invigorate the tech IPO market after Snap’s (SNAP) disappointing offering last year, the report adds.

May be time to consider Time Warner – Time Warner (TWX) shares look increasingly attractive as the company’s profit outlook should limit the downside if its merger deal with AT&T (T) is blocked on antitrust reasons, Andrew Bary writes in this week’s edition of Barron’s.

Many downsides when Amazon’s HQ2 comes to town – As Amazon decides on the location for its second corporate headquarters in North America, many have cautioned the 20 finalists to “be careful what you wish for,” Jon Swartz writes in this week’s edition of Barron’s. There are several downsides and prospective bidders should look no further than Silicon Valley, with workers still struggling to find affordable housing while enduring hellacious traffic and escalating costs in the area, the report noted.


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Workhorse to build UPS electric delivery trucks

UPS partners with Workhorse to build electric delivery trucks 

Workhorse to build UPS electric delivery trucks. Stockwinners.com
Workhorse to build UPS electric delivery trucks

UPS (UPS) announced it plans to deploy 50 plug-in electric delivery trucks that will be comparable in acquisition cost to conventional-fueled trucks without any subsidies – an industry first that is breaking a key barrier to large scale fleet adoption.

The company is collaborating with Workhorse Group (WKHS) to design the vehicles from the ground up, with zero tailpipe emissions. Workhorse claims these vehicles provide nearly 400% fuel efficiency improvement as well as optimum energy efficiency, vehicle performance and a better driver experience.

Each truck will have a range of approximately 100 miles between charges, ideal for delivery routes in and around cities.

The class 5, zero emission delivery trucks will rely on a cab forward design, which optimizes the driver compartment and cargo area, increasing efficiency and reducing vehicle weight.

The new trucks will join the company’s Rolling Lab, a growing fleet of more than 9,000 alternative fuel and advanced technology vehicles. UPS will test the vehicles primarily on urban routes across the country, including Atlanta, Dallas and Los Angeles.

With zero emissions and lower noise, the electric delivery trucks will help UPS make its fleet cleaner and quieter, a significant benefit in urban areas.

Following real-world test deployments, UPS and Workhorse will fine-tune the design in time to deploy a larger fleet in 2019 and beyond. Since most of the maintenance costs of a vehicle are associated with the engine and related components, UPS expects the operating cost of the new plug-in electric vehicle to be less than a similarly equipped diesel or gasoline vehicle.

UPS’s goal is to make the new electric vehicles a standard selection, where appropriate, in its fleet of the future. UPS has approximately 35,000 diesel or gasoline trucks in its fleet that are comparable in size and are used in routes with duty cycles, or daily miles traveled similar to the new electric vehicles.

The initiative will help UPS attain its goal of one in four new vehicles purchased by 2020 being an alternative fuel or advanced technology vehicle.

The company also has pledged to obtain 25% of the electricity it consumes from renewable energy sources by 2025 and replace 40% of all ground fuel with sources other than conventional gasoline and diesel, an increase from 19.6% in 2016.


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Intel says 32 lawsuits have been filed against company

Intel says 32 lawsuits have been filed against company over security flaws

Intel says 32 lawsuits have been filed against company. Stockwinners.com
Intel says 32 lawsuits have been filed against company
In a regulatory filing, Intel (INTC) said that “On January 3, 2018, information on the security vulnerabilities was publicly reported, before software and firmware updates to address the vulnerabilities were made widely available.
Numerous lawsuits have been filed against Intel and, in certain cases, our executives and directors, in U.S. federal and state courts and in certain courts in other countries relating to the Spectre and Meltdown security vulnerabilities.
As of February 15, 2018, 30 customer class action lawsuits and two securities class action lawsuits have been filed.
The customer class action plaintiffs, who purport to represent various classes of end users of our products, generally claim to have been harmed by Intel’s actions and/or omissions in connection with the security vulnerabilities and assert a variety of common law and statutory claims seeking monetary damages and equitable relief.
The securities class action plaintiffs, who purport to represent classes of acquirers of Intel stock between July 27, 2017 and January 4, 2018, generally allege that Intel and certain officers violated securities laws by making statements about Intel’s products and internal controls that were revealed to be false or misleading by the disclosure of the security vulnerabilities.
Additional lawsuits and claims may be asserted on behalf of customers and shareholders seeking monetary damages or other related relief. We dispute the claims described above and intend to defend the lawsuits vigorously.
Given the procedural posture and the nature of these cases, including that the proceedings are in the early stages, that alleged damages have not been specified, that uncertainty exists as to the likelihood of a class or classes being certified or the ultimate size of any class or classes if certified, and that there are significant factual and legal issues to be resolved, we are unable to make a reasonable estimate of the potential loss or range of losses, if any, that might arise from these matters.
In addition to these lawsuits, in January 2018, Joseph Tola, Joanne Bicknese, and Michael Kellogg each filed a shareholder derivative action in the Superior Court of the State of California in San Mateo County against certain members of our Board of Directors and certain officers.
The complaints allege that the defendants breached their duties to Intel in connection with the disclosure of the security vulnerabilities and the failure to take action in relation to alleged insider trading.
The complaints seek to recover damages from the defendants on behalf of Intel.”


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Barron’s is bullish on banks, bearish on Twitter and Snap

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:

Stockwinners offers Barron's review of Stockwinners offers stocks to buy, stocks to watch, upgrades, downgrades, earnings, Stocks to Buy On Margin
Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH   MENTIONS: 

Bigger bank payouts amid looser regulation – Helped by higher capital levels and more leeway from regulators, large-cap banks should be increasing dividends over the next several years, Lawrence Strauss writes in this week’s edition of Barron’s. Those include Bank of America (BAC), BB&T (BBT), Citigroup (C), Citizens Financial (CFG), Fifth Third Bancorp (FITB), PNC Financial (PNC), Regions Financial (RF), SunTrust (STI), U.S. Bancorp (USB) and Wells Fargo (WFC), the report notes.

Delta, Apple among stocks merit a look – Shares of Delta (DAL), Apple (AAPL), Starbucks (SBUX), D.R. Horton (DHI), Verizon (VZ), American Electric Power (AEP) and NextEra Energy (NEE) have fallen but estimates for their earnings have risen, Jack Hough writes in this week’s edition of Barron’s. These names should be worth consideration by bargain hunters, he adds.

Wells Fargo looks inexpensive, regulatory risks remain– Shares of Wells Fargo (WFC) have badly trailed rivals as the bank grapples with the fallout from scandals, Ben Walsh write’s in this week’s edition of Barron’s. And while Wells Fargo looks inexpensive relative to some other big banks, regulatory risks remain and changing the bank’s aggressive culture will not be easy, the report adds.

Market volatility putting bitcoin to the test – Bitcoin started to rebound last week, but its usefulness as a hedge against stock market volatility has lately been called into questions, Avi Salzman writes in this week’s edition of Barron’s. While Bulls argue that short-term price action does not change the longer trend, bitcoin price drop has been fueled by the same problems that it has had for year, namely unreliable exchanges and worries about manipulation and fraud, the report notes. If bitcoin is to survive as an alternate currency, the hype will have to fade and it will have to become useful, Salzman adds

BEARISH  MENTIONS

Twitter/Snap ‘hot for now,’ may not last – Results from Twitter (TWTR) and Snap (SNAP) beat expectations last week and both notched double-digit percentage gains, but this cannot last, with the thrill likely to fade in coming weeks, Tiernan Ray writes in this week’s edition of Barron’s. Twitter and Snap have years ahead of them to develop their product and innovate in ways that may give them a broader appeal, but for now they are boutiques in an advertising market of giants that includes not only Facebook (FB) but Alphabet (GOOG; GOOGL) and Amazon (AMZN), Ray adds.


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Callidus Software sold for $2.4 billion

SAP to acquire Callidus Software for $36 per share

SAP to acquire Callidus Software for $36 per share. Stockwinners.com
SAP to acquire Callidus Software for $36 per share

SAP SE (SAP) and Callidus Software (CALD) announced that SAP America, Inc. has entered into an agreement to acquire CallidusCloud.

The CallidusCloud board of directors has unanimously approved the transaction. The per share purchase price of $36.00 represents a 21% premium over the 30-day volume weighted average price per share and a 28% premium over CallidusCloud’s 90-day volume weighted average price per share.

The per share price represents an enterprise value of approximately $2.4B. SAP has elected to fund the transaction with existing cash balances and an acquisition term loan.

The transaction is expected to close in Q2, subject to approval from CallidusCloud stockholders, clearances by the relevant regulatory authorities, and other customary closing conditions.

The transaction is expected to be essentially neutral to SAP’s non-IFRS EPS for FY18 and accretive to SAP’s non-IFRS EPS for FY19.

Upon completion of the transaction, SAP expects to consolidate all CallidusCloud product assets within SAP Hybris solutions as part of SAP’s Cloud Business Group.

The existing management team will continue to lead CallidusCloud. The SAP Cloud Platform is to be used for the technical integration of CallidusCloud solutions.


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Android spyware Skygofree called very dangerous

Kapersky Lab says finds Android spying app called ‘Skygofree’

Android spying app called 'Skygofree' is widely distributed. Stockwinners.com
Android spying app called ‘Skygofree’ is widely distributed 

According to Kapersky Lab, “At the beginning of October 2017, we discovered new Android spyware with several features previously unseen in the wild.

In the course of further research, we found a number of related samples that point to a long-term development process. We believe the initial versions of this malware were created at least three years ago – at the end of 2014.

Since then, the implant’s functionality has been improving and remarkable new features implemented, such as the ability to record audio surroundings via the microphone when an infected device is in a specified location; the stealing of WhatsApp messages via Accessibility Services; and the ability to connect an infected device to Wi-Fi networks controlled by cybercriminals.

We observed many web landing pages that mimic the sites of mobile operators and which are used to spread the Android implants. These domains have been registered by the attackers since 2015.

According to our telemetry, that was the year the distribution campaign was at its most active.

The activities continue: the most recently observed domain was registered on October 31, 2017.

Based on our KSN statistics, there are several infected individuals, exclusively in Italy.

Moreover, as we dived deeper into the investigation, we discovered several spyware tools for Windows that form an implant for exfiltrating sensitive data on a targeted machine.

The version we found was built at the beginning of 2017, and at the moment we are not sure whether this implant has been used in the wild.

We named the malware Skygofree, because we found the word in one of the domains.”

According to researchers, the Skygofree Android implant is ” one of the most powerful spyware tools that we have ever seen for this platform.

As a result of the long-term development process, there are multiple, exceptional capabilities: usage of multiple exploits for gaining root privileges, a complex payload structure, never-before-seen surveillance features such as recording surrounding audio in specified locations.

Given the many artifacts we discovered in the malware code, as well as infrastructure analysis, we are pretty confident that the developer of the Skygofree implants is an Italian IT company that works on surveillance solutions, just like HackingTeam.”

GOOG closed at $1121.76.


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