Hot Stock Minute

Apple bond sale; Mega-mergers fueling market moves; L.A. Clippers owner controversy

Apple will reportedly have a bond sale that could be the second-largest in history. In light of Pfizer making another bid for AstraZeneca, what is to made of all the merger news lately? And what consequences, if any, should there be for Los Angeles Clippers owner Donald Sterling if the allegations against him are proven to be true. Breakout host Jeff Macke spoke with Aaron Task about all of these topics.

Apple Bond Sale

Apple (AAPL) is preparing for a $17 billion bond sale that could be the second largest in history, according to the Financial Times. They'll use the sale of the debt to fund its share buyback, instead of using $150 billion the company has in cash. About 88%, or about $130 billion of that cash, is held over seas. Bringing it back to the U.S. would lead to it being taxed at a higher rate. Macke, who is an Apple shareholder said, “I love that they’re arguing over ways to best serve me.” However, he said all of that financial positioning would be trumped by being innovative. “Fix your stores; maybe make phones a tiny bit bigger,” he said.

Macke said Apple needs to get back in stride. “A debt offering, while nice for equity holders, isn’t going to get it done."

Is M&A Affecting The Broader Market?

Drug giant Pfizer (PFE) is making a second attempt to buy Britain's second-largest pharmaceutical company AstraZeneca (AZN) for $99 billion in cash and stock. That's a 15% premium to Friday's close. AstraZeneca is urging shareholders to reject the deal saying the deal undervalues the company. News of the bid comes among other news of recent deals in Big Pharma, like the deal between GlaxoSmithKline (GSK), Novartis (NVS) and Eli Lilly (LLY). There was also news this month of Valeant Pharmaceuticals (VRX) and hedge fund manager Bill Ackman making an offer for Allergan (AGN), the maker of Botox.

Macke said recent M&A deals are confined to the healthcare sector and aren’t affecting the overall market. He said M&As need to reach out to different types of industries. “We need that to spread to be a big booming catalyst,” he said. “Biotech doesn’t need that much more help, and neither does pharma.”

Clippers Owner Controversy

It's been a few days since a recording was released that is alleged to be Los Angeles Clippers owner Donald Sterling saying he was embarrassed that his girlfriend was in photos with African-Americans. The NBA is investigating the incident and team members have already held a silent protest. If the tape is authentic and the allegations are true, should the NBA fire or fine him, or should other “market forces” like the players or the public determine Sterling’s fate by not playing for the Clippers and not watching its games?

Macke said Sterling's comments were hideous and indefensible, but he also criticized the way Sterling managed the Clippers. "He was indefensible coming into this," Macke said. "The way he’s run the Clippers was indefensible." Macke said the team's poor performance under Sterling will be a deciding factor in the owner being forced to retire.

That brings us to today’s poll question. What consequences should there be for racist remarks allegedly made by L.A. Clippers owner Donald Sterling? Vote in our poll and leave a comment below.

View Comments (5)