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China Index Tumbles 5.3%; Tenet Buying Vanguard Health; Hostess Comeback

Dan Berman
Hot Stock Minute
China Index Tumbles 5.3%; Tenet Buying Vanguard Health; Hostess Comeback

A liquidity crunch has pulled Chinese markets underwater and now it may swallow us too. Today the Shanghai composite posted its biggest percentage losses in nearly four years. The drop was 5.3% putting the index at its lowest level since December. It came as China's Central Bank issued a statement saying there's ample cash in the banking system, so it may not step in to the rescue. Yahoo! Finance Editor-in-Chief Aaron Task has more in the video above.

Tenet Healthcare (THC) is buying Vanguard Health Systems (VHS). The deal will help Tenet expand its services and broaden its reach. The price agreed upon is $1.8 billion dollars or $21 a share, which is a 70% premium on Vanguard's closing price on Friday. Shares of Vanguard Health closed on Friday just pennies from where they began 2013, but they're up 65% this morning.

There's a big hook-up in Europe. Vodafone (VOD) has reached an agreement to buy Kabul Deutschland. The British-based Vodafone says it will pay more than $10-billion for Germany's largest cable operator. The move positions Vodafone to expand from its core business of cell service into so-called "triple plays." The deal was in the works for at least four months. Shares of Vodafone are down about 1% this morning. They've been up about 6% year-to-date.

Ding Dong! It turns out Hostess is not dead. The maker of iconic snack cakes is emerging from bankruptcy again. In fact it's already baked-up plans to be back in stores on July 15th. This will be the second time Hostess comes out of bankruptcy in the last three years. The company is now owned by Apollo Global Management and C-Dean Metropoulos who bought the company for about $400 million.


First up as we kick off the new week is Facebook (FB). Last week the stock bucked the broader market climbing nearly 4%. It rose more than 2.5% on Friday. That was the day after Facebook rolled-out of a video function for Instagram its $1 billion acquisition. The stock was also upgraded to buy from neutral at UBS. By the way, The Wall Street Journal is reporting that Facebook is now working on a newspaper service for mobile devices. Even with last week's gains, the stock is down 13% so far this year.

Next up is Ebix (EBIX), which was one of the most heavily traded and biggest losing stocks at the end of last week. Shares of the Atlanta-based software maker plunged 13.5% on Friday after posting even larger losses on Thursday. That's when Goldman Sachs terminated a plan to buy the company citing a government investigation into claims of internal misconduct. The two-day drop puts Ebix down 42% year-to-date. By the way, the company says there has been no wrongdoing.

Now we look at Gogo (GOGO), which went public on Friday. The stock dropped nearly 6% over the course of the day. Gogo sells wireless internet equipment for airplanes. The company says it will use the cash from the offering for a global expansion. Shares were originally released at $17 each. They never rose above that initial price.

Finally there's Sonic (SONC), which reports earnings after the closing. Consensus is for earnings per share to rise 2-cents from a year ago, up to 26-cents despite a decrease in revenue. Sonic is the nation's largest drive-in chain, and it's getting bigger. On Thursday it announced plans to franchise 15-new locations in Southern California. The stock hit is highest level since 2008 on Wednesday and is up 50% over the past year.