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Truth about BlackBerry Plan; What’s Behind Chrysler’s IPO; JPMorgan and Citi’s Struggles

Dan Berman
Hot Stock Minute
Truth about BlackBerry Plan; What’s Behind Chrysler’s IPO; JPMorgan and Citi’s Struggles

Blackberry (BBRY) is hanging in the balance. The fallen phone-maker is agreeing to go private, but the deal is far from sealed. Right now shares are down fractionally in early trading. This follows a 1% climb yesterday, and approaches the $9 per share offer being floated. So, what's the full story behind this new plan? And what are the chances it will actually happen? Yahoo Finance Senior Columnist Mike Santoli has more in the video above.

Breaking news: A report that Twitter has decided to list on the NYSE when it goes public. This is according to The Street.com. Twitter announced on September 12th via a tweet that it has submitted paperwork to the SEC for a public offering. So far there has been no official decision on where the stock will trade.

Chrysler is now on a path to go public, but could still put the brakes on the plan. The company has filed papers for an IPO, but only because there's a dispute between its current owners. Majority holder Fiat is looking to buy the 41% stake in Chrysler that's currently held by the UAW health care trust. However, the trust wants a heftier price than what Fiat is willing to pay. The risk here is that if Chrysler does go public, Fiat could choose to back-out of the company completely.

There's a rough road ahead for JPMorgan (JPM) with more potholes popping-up by the day. The New York Times says JPM is about to be sued by the Feds on suspicion of selling bad mortgage-backed securities ahead of the financial meltdown. Meanwhile, Bloomberg is reporting the company is among twelve more banks being sued for suspected manipulation of Libor rates. Just last week, the company agreed to pay nearly $1-billion in fines for the London Whale trading scandal. JPMorgan stock fell 2.5% yesterday but is still up 15% year-to-date.

From one bank to another, there's a shrinking Citi (C). Citigroup has laid off 1,000 workers in its mortgage unit citing a slowdown in the division. If you were watching us yesterday morning, you also know Citi is likely to report a drop in profits because its own investments haven't done too well. The stock was down more than 3% yesterday, but is up 48% over the past year.


We start with a pair of homebuilders reporting earnings: Lennar (LEN) and KB Home (KBH). First is Lennar which beat estimates, declaring earnings of 54-cents a share when analysts expected 45-cents. Sales were also higher than expectations at $1.6-billion versus $1.56-billion. As for KB, it's expected to post earnings of 21-cents a share, way up from 4-cents a year ago. Revenue has likely climbed to $569-million dollars, up 1/3 from a year ago. Homebuilders as a group have been able to increase earnings amid tight supplies of existing homes and rising demand. However, they're feeling a pinch from rising interest rates. KB Home has been up about 5% year-to-date while Lennar is down 13% in the same time.

Cruise operator Carnival (CCL) is also reporting earnings today. The company is expected to have profits of $1.30 a share, down from $1.53 a year ago on revenue that's roughly the same: $4.65-billion versus $4.68-billion. The company is trying to put recent disasters and mishaps at sea behind it. Data on bookings makes it appear as though the negative publicity from the events has been fleeting. Carnival also has a new CEO steering all operations. At this point, Carnival stock has basically been flat in 2013, down less than 1%.

Carmax (KMX) is benefiting from the boom in car sales. Within the past hour the company came out with an earnings beat: 62-cents a share, a nickel better than expected. Revenue also topped estimates at $3.25-billion. The company says it moved 21% more vehicles in the last quarter than it did a year ago. Much of that was due to a loosening of credit. Prior to this report, shares of Carmax were already up a handsome 33% year-to-date.

Applied Materials (AMAT) is up more than 6% in the premarket. The chipmaker announced this morning that it's merging with Tokyo Electron to create a new $29-billion company. The new entity will have a dual listing here on the NASDAQ and the Tokyo exchange. Prior to the announcement, Applied Materials was already up 41% over the past year.