JPM - JPMorgan Chase & Co.
| Previous Close | 105.20 |
| Open | 106.37 |
| Bid | 107.69 x 1800 |
| Ask | 107.69 x 1400 |
| Day's Range | 105.87 - 107.98 |
| 52 Week Range | 91.11 - 119.24 |
| Volume | 11,812,705 |
| Avg. Volume | 11,533,138 |
| Market Cap | 344.434B |
| Beta (3Y Monthly) | 1.15 |
| PE Ratio (TTM) | 11.01 |
| EPS (TTM) | 9.78 |
| Earnings Date | Oct 15, 2019 |
| Forward Dividend & Yield | 3.60 (3.42%) |
| Ex-Dividend Date | 2019-10-03 |
| 1y Target Est | 121.15 |
- Bloomberg
Indonesia Makes a Big Fiscal Bet
(Bloomberg Opinion) -- Don’t you wish you had a dollar for every beleaguered official who cried “fiscal policy must do more”? Indonesia’s President Joko Widodo actually seems to mean it.Fresh from re-election, Jokowi, as he’s known, is aiming to cushion Southeast Asia's largest economy from a slowdown and make much-needed investments in infrastructure like roads, ports and airports, and even a new capital city. The national budget for 2020, published Friday, seeks record spending.Indonesian growth hasn’t been terrible. The pace of GDP expansion been remarkably steady at 5% through Jokowi's first term. If this were China, people would be muttering conspiratorially that the numbers were too consistent.The country can and should do better, though. Jokowi came to office in 2014 talking about growth of 7%. The president wants to set the bar higher and this year's budget is probably his best shot. He has more support now in the legislature, but in a few years domestic politicking will focus on who might succeed him.Jokowi needs to make good on promises to address the woeful infrastructure that holds Indonesia back. Without an upgrade, it’s hard to see the nation becoming one of the most influential economies by mid-century. The budget is also tacit recognition that the central bank can't do it all. Bank Indonesia is a risk-averse place, even by the cautious standards of monetary policy-making. Officials are very sensitive to the level of the rupiah and the vulnerability presented by the current account deficit. Don't look for dramatic interest rate cuts, even with global and regional monetary policy easing, as I wrote last month.It's tempting to see Indonesia as a model for what countries can do with a bit of will and the right political climate. Other Asian governments have primed the fiscal pump with tangible results. In South Korea, state spending made the difference last quarter between growth and recession. Singapore has flagged stimulus as well. That's one of the primary tasks of fiscal policy, to step in to bolster demand.Jokowi is attempting something different; there’s no contraction to alleviate. While lots of leaders talk about infrastructure, those aspirations rarely translate to substantive action. Indonesia’s president already has runs on the board. Jakarta's subway system finally opened this year after decades of discussions. No fewer than 25 airports are planned, along with power plants and a highway system for Sumatra modeled on the newish one running the length of Java.One of the most fascinating parts of this budget is the idea that the deficit will be 1.76% of GDP, down from this year's estimate of 1.93% and well within the legal limit of 3%. How is this possible? It’s a little fuzzy. Part of the answer is that Finance Minister Sri Mulyani Indrawati has managed to boosted tax collection, overcoming a chronic issue of avoidance. In some ways, this budget is an endorsement of Indrawati, who’s a tremendous asset for the government. Jokowi would be remiss not to make greater use of her. What could go wrong with all this? Quite a bit. For one thing, the external environment could deteriorate materially. Slowing global growth, economic conflict between the U.S. and China and skittish markets could foil all Jokowi’s grand plans. With its current account shortfall, Indonesia is highly sensitive to global investor sentiment and anything that may weaken appetite for the currency and its sovereign bonds, about 40% of which are held by foreigners. Sometimes this translates into bullying and even shooting of the messenger. In 2017, the government shelved business partnerships with JPMorgan Chase & Co. after the firm downgraded Indonesian equities. JPMorgan spent some time in the cold before things were eventually patched up. Indrawati’s ministry was a prime mover in that saga. Regardless of her attributes, she would be ill advised to repeat the performance. The global economic and market climate was far more benign in 2017 than now. Harder times bring more scrutiny from investors. Punitive responses, either in public or private, aren’t the right approach for a country with aspirations to join the top tier.Let's applaud Jokowi's ambitions. The execution will determine whether they become a template for others. No own goals, please. To contact the author of this story: Daniel Moss at dmoss@bloomberg.netTo contact the editor responsible for this story: Matthew Brooker at mbrooker1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Reuters
JPMorgan to brief clients on volatility in equity markets
"In the wake of a rather violent decline in yields, inversion of the curve, and volatility in equity markets, we consider the role of poor liquidity and systematic flows in exacerbating these market moves," an invitation from JPMorgan Cross-Asset & Derivatives Strategy said. President Donald Trump held a conference call on Wednesday with the chief executives of the three largest Wall Street banks as financial markets were in turmoil, one source with direct knowledge of the matter said on Friday.
- Bloomberg
How Asia Can Protect Its Crazy Riches
(Bloomberg Opinion) -- With support for globalization and free trade declining in much of the world, Asia has a historic chance to break out of its traditional role as a capital exporter to the West and to instead redirect flows to improve its own economies and financial industries.According to some estimates, the region’s pool of wealth at $110 trillion exceeds those of North America and Europe and is growing faster. Japan and China were at or near the top of foreign portfolio investment in the United States, including stocks and short- and long-term bonds, in 2017 with $2 trillion and $1.5 trillion respectively, a U.S. Treasury survey showed. Yet Asia has a poor record of protecting its assets stranded overseas when the cycle turns. In the 1990s, Japanese investors incurred significant losses, primarily on property. During the 2008 crisis, a range of Asian sovereign wealth funds and high net-worth individuals lost heavily on advanced economy shares, real estate, and mortgage-backed and structured securities.The desire to invest overseas partly reflects concern about political risk and governance at home. But leaving familiar territory brings other risks.Distance, language and cultural differences can put Asian investors at a disadvantage when it comes to information. As a result, investors often rely too heavily on intermediaries whose interests don’t align with their own.Their main failing, though, is a bias toward certain assets. In an echo of the ill-fated Japanese purchases of Rockefeller Center and the Pebble Beach golf course in the 1980s, Asian investors are buying prime office buildings in New York and London. Swanky apartments are quickly snapped up in world cities, especially by Chinese buyers.Lacking cozy domestic informational networks, Asian investors are particularly susceptible to chasing name asset managers or fashionable businesses. That restricts their options since the best funds are frequently closed to new arrivals. Managers often can’t repeat past results. Inadequate expertise frequently leads to unwise choices. In the run-up to 2008, Asian banks and investors suffered losses on purchases of structured products and collateralized debt obligations, or CDOs. High net-worth and retail segments are buying again. Japanese banks have purchased up to 75% of AAA tranches of collateralized loan obligations, and perhaps one-third of all CLOs, which have common features with CDOs.Where investments are leveraged, they must be financed by borrowing dollars and euros in wholesale markets. Losses may create difficulties in rolling over funding. As in 2008, forced sales and the lack of trading liquidity will accelerate declines in prices.Why look abroad at all? There is a mismatch between Asian savings and the size of domestic capital markets, which are marked by low returns, a smaller range of investment products and limited local expertise. The regional rivalries between Singapore, Hong Kong, Shanghai, Mumbai and Tokyo and a bias toward real industry have hampered the development of financial services.Asia lacks quality indigenous banks such as JPMorgan Chase & Co. or The Goldman Sachs Group Inc., or asset managers such as BlackRock Inc. or Pacific Investment Management Co. Most financial institutions are domestically focused. In 2018, assets under management at Asian hedge funds fell 10% to just over $100 billion, a mere 3% of the global total. Private wealth management remains the preserve of Western firms.Asia’s high savings are a global anomaly, driven by rising incomes, a culture of thrift and minimal social safety nets. Governments need to move with greater determination to enable more savings to be absorbed locally. The timing may be right as the world is tilting more toward national interests and self-sufficiency.The first step must be to accelerate development of capital markets to boost size, depth, liquidity and investment choices. Revised listing and issuance rules, harmonized pan-Asian regulations, breakups of family dominated conglomerates, and partial or full privatization of key state-owned firms would improve market depth. Changes in rules and tax incentives should encourage local pension funds or insurance companies to adopt stable, long-term investment practices.Second, the creation of world-class financial institutions and skilled asset managers needs to be a priority. To attract the best and brightest, limited career choices and pay that lags behind international levels need to be addressed. State-sponsored financial skills training and accreditation systems should be improved. A system of mutual recognition of qualifications would increase labor mobility.Finally, retaining capital within Asia requires improving confidence in the security of savings. Key steps include creating independent institutions free from political interference, as well as bolstering the rule of law and transparent and consistent regulations. Singapore and Hong Kong, despite its recent protests, are examples to emulate.Without change, the familiar cycle of exuberant foreign investment and the loss of Asian wealth is likely to be repeated in the next downturn. To contact the author of this story: Satyajit Das at sdassydney@gmail.comTo contact the editor responsible for this story: Patrick McDowell at pmcdowell10@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Satyajit Das is a former banker and the author, most recently, of "A Banquet of Consequences."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Bloomberg
Argentina Slammed by Double Downgrade at End of Traumatic Week
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Argentina was downgraded deeper into junk territory by two of the three biggest ratings companies as markets brace for a possible default after the populist opposition won a landslide victory in Sunday’s primary election.Fitch Ratings cut Argentina’s long-term issuer rating by three notches to CCC from B, putting the South American nation on par with Zambia and the Republic of Congo. S&P lowered the country’s sovereign rating to B- from B and slapped a negative outlook on it.The move caps a traumatic week for Argentina that saw the peso fall to a record, the benchmark equity gauge suffer one of the worst daily routs in 70 years and the yield on the nation’s century bonds spike to an all-time high. S&P cited Argentina’s “vulnerable financial profile” and the slump in asset prices following the primary.“Uncertainty continues on the private sector’s predisposition to roll over government debt and hold pesos while depreciation stresses the government’s high financing needs,” S&P analyst Lisa Schineller wrote in a statement accompanying the downgrade.As of March 31, Argentina had $33.7 billion in foreign-currency debt payments due by year-end, the vast majority in short-term Treasury bills, or Letes, according to the latest debt report by the Finance Ministry.Fitch’s said the deterioration in the macroeconomic environment “increases the likelihood of a sovereign default or restructuring of some kind.”Argentine bonds had started to recover from the worst of this week’s rout. The average spread on sovereign bonds tightened 80 basis points today, after earlier narrowing 128 bps, according to a JPMorgan index.Past PopulismOpposition candidate Alberto Fernandez trounced President Mauricio Macri in the primary, giving him a seemingly unassailable lead ahead of October’s presidential election. Investors fear that victory for Fernandez will mark a return to the populist policies of the past and a likely default.Moody’s Investors Service already rates the nation’s notes at five levels below investment grade.Fearful Argentines Pull Dollars From Banks After Election ShockThis week’s slump in assets resulted in large losses for some of the world’s biggest money managers, who piled into Argentine assets in a search for yield.It may already be too late for Argentina to avoid a default, according to Siobhan Morden, a New York-based strategist at Amherst Pierpont Securities. She said the weakening peso will push debt ratios even higher.Rising DebtFitch said it expects Argentina’s federal government debt to climb to around 95% of gross domestic product this year, without even factoring in the risk of a further slide in the currency. Meantime, South America’s second-largest economy will probably contract 2.5% by year-end, Martinez said.Financing pressures could intensify in 2020 when the sovereign will need to turn to the market to finance a fiscal deficit and some $20 billion in debt maturities as the nation’s disbursements from the International Monetary Fund run dry, according to Fitch.“Both roll-over and fresh financing could be difficult if local and external borrowing conditions do not improve markedly from current stressed levels,” Martinez said.(Updates with downgrade by S&P Global.)\--With assistance from Aline Oyamada and Justin Villamil.To contact the reporters on this story: Ben Bartenstein in New York at bbartenstei3@bloomberg.net;Sydney Maki in New York at smaki8@bloomberg.netTo contact the editors responsible for this story: Julia Leite at jleite3@bloomberg.net, Philip Sanders, Alec D.B. McCabeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- InvestorPlace
Dow Jones Today: A Fantastic Friday
Despite more speculation that recession clouds are gathering, stocks cobbled together impressive gains to close another wild week. I mentioned earlier this week that some of the more important European economies, including Germany, are on the cusp of economic contractions and that are likely to spur the European Central Bank (ECB) into action.That was one catalyst for today's rally: talk that the ECB won't be sitting on the sidelines much longer and will attempt something with monetary policy aimed at perking up the region's sagging economies.Here in the U.S., it still seems like a stretch to say that a recession is imminent, but the University of Michigan Consumer Sentiment Index reading out today could be cause for concern for fans of President Donald Trump. That survey indicates independent and republican voters are growing concerned about the economy and could be apt to rein in spending. That data point was revealed just a day after the president spoke glowingly about the economy and the strength of the American consumer.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Cheap Dividend Stocks to Load Up On Even with all the recession chatter, the Nasdaq Composite rallied 1.67% while the S&P 500 climbed 1.44%. The Dow Jones Industrial Average closed the week with a gain of 1.20%. Fun fact, at least for day traders or those that like volatility: the S&P 500 has had intraday moves of at least 1% for nearly three straight trading weeks. Tariff TalkThese days, it's almost possible to discuss stocks, particularly many of the Dow members, with talking about tariffs. Plenty of stocks are more tariff-sensitive than others, and JPMorgan was talking about a few of those names today.Remember that while President Trump backed off some of the tariffs on Chinese goods set to go into effect on Sept. 1, he did not back off all of those levies. And the ones not going into effect next month were not eliminated. Those were merely delayed until mid-December.As for companies likely to be affected by the Sept.1 tariffs, those names include Dow components Dow (NYSE:DOW) and Caterpillar (NYSE:CAT). Somehow, Dow, the chemicals maker, was the second-best performer in the Dow today while industrial machinery maker Caterpillar was a solid gainer as well, adding 0.97%.Regarding Dow members that could be pinched by the December tariffs, assuming those penalties go into effect, JPMorgan includes Apple (NASDAQ:AAPL) and Nike (NYSE:NKE) on that list. However, both stocks closed higher today.The Home Depot (NYSE:HD) has been receiving elevated trade-related mentions, according to JPMorgan. Still, Home Depot is a heavily domestic company and the shares added 0.92% today ahead of next Tuesday's earnings report. Bad Bank Stocks on the DowEach of the Dow's financial services components, including JPMorgan Chase (NYSE:JPM), the largest U.S. bank, closed higher today. I mention this because, yes, banks are being drilled by declining net interest margin expectations at the hands of lower interest rates, but also because recent price action in the sector confirms investors can be confounded by analyst chatter.Just last week, a Wells Fargo analyst said valuations on bank stocks are attractive, but today the same analyst said "there is no way to sugar coat the negative impact of lower interest rates" on banks' net interest margins and per share earnings.As I pointed out a couple of times during financial services earnings season, the net interest margin issued was raised on a slew of bank earnings calls and at this point, should be baked into these stocks. Dow Jones Bottom LineWith all the aforementioned recession chatter swirling, the good news is that the Federal Reserve will not take that talk lightly and it is becoming increasingly likely that there could be another two rate cuts before the end of this year.While that may be good news, the risk is that with rates already so low by historical standards, the effectiveness of more rate reductions may not be up to investors' current expectations. Time will tell on that front, but the near-term path of least resistance would be for trade wars to cease.Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Dow Jones Today: A Fantastic Friday appeared first on InvestorPlace.
- MarketWatch
Walgreens Boots, JPMorgan Chase share gains lead Dow's 262-point rally
DOW UPDATE The Dow Jones Industrial Average is rallying Friday morning with shares of Walgreens Boots and JPMorgan Chase delivering the strongest returns for the price-weighted average. Shares of Walgreens Boots (WBA) and JPMorgan Chase (JPM) have contributed to the index's intraday rally, as the Dow (DJIA) is trading 262 points (1.
- Moody's
JPMorgan Chase Bank, N.A. -- Moody's affirms JPMorgan Chase Bank, N.A.'s prime jumbo originator assessment as Above Average
Moody's Investors Service (Moody's) affirmed JPMorgan Chase Bank, N.A.'s (Chase) prime jumbo residential mortgage originator assessment as Above Average. Chase originated 47,057 prime jumbo residential mortgage loans during the 15 month review period ending 31 December 2018.
- Bloomberg
Japan Yields Slide to Three-Year Low, Shrug BOJ's Control Bid
(Bloomberg) -- Japan’s 10-year bond yield slipped to the lowest since July 2016, shrugging off an attempt by the central bank to stem its decline amid a global debt rally. New Zealand’s benchmark rate also fell to a new record low.The JGB yield dropped two basis points to minus 0.255%, as growing fears about world growth and the U.S.-China trade war drive investors to haven assets. The Bank of Japan, widely seen as having a yield target range of about 20 basis points from zero for the benchmark, cut its purchases of 5-to-10 year bonds at Friday’s operations.The world’s negative-yielding bonds have surged to a record $16.7 trillion, while a key part of the U.S. Treasury curve inverted this week, signaling an expectation for the American economy to tip into a recession. With markets pricing in further easing by major central banks, investors including Janus Henderson are continuing to pile into debt.“BOJ’s action came as yields were getting too low,” said Takafumi Yamawaki, head of local rates and FX research at JPMorgan Chase & Co. in Tokyo. “It is difficult for the BOJ to achieve everything, such as monetary expansion guideline, steepen yield curve, boost yield levels and keep the 10-year range. At some point, the BOJ will have to give up something.”READ: Yields Sinking Below Target Puts Spotlight on BOJ’s ResponseNew Zealand’s 10-year bond yield fell as much as 3 basis points to 0.98%, the first time it has dipped under 1%.“Major global central banks are easing, and the fall in global yields will ripple to New Zealand,” said Imre Speizer, head of New Zealand strategy at Westpac Banking Corp. in Auckland. The nation’s central bank could cut rates by 25 basis points to 0.75% in November, he said.New LowsTreasury 30-year yield hit a record low this week, while the 10-year fell below the 2-year rate. Thursday’s U.S. retail sales figures, which showed the consumer remains in fine form, barely had any market impact with investors waiting on clarity about U.S.-China trade and the Federal Reserve policy outlook.The BOJ cut purchases in the key five-to-10 year maturity zone by 30 billion yen ($282 million) from its last operation, its first reduction since December. It has been gradually tapering its outright bond purchases, with the recent focus largely being on steepening the yield curve.“Global yields are sinking or approaching zero, adding momentum for Japanese investors to return to super-long Japanese government bonds,” Kazuhiko Sano, chief strategist at Tokai Tokyo Securities Co., wrote in a note before the operations. “Against this backdrop, it’s unlikely that the drop in yields will stop even when the 10-year yield at minus 0.25% serves as a milestone.”To contact the reporters on this story: Chikako Mogi in Tokyo at cmogi@bloomberg.net;Ruth Carson in Singapore at rliew6@bloomberg.netTo contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net, Shikhar BalwaniFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Nomura Says ‘50 Cent’ Has Banks Scrambling for VIX Hedges
(Bloomberg) -- The re-emergence of a huge U.S. equity volatility buyer has banks scrambling to hedge the other side of the trades and is even affecting levels on the Cboe Volatility Index, according to Nomura Securities International.In July, a big purchaser accumulated protection against a major sell-off in U.S. stocks over the next month on the so-called VIX, in activity similar to that of the volatility buyer known as “50 Cent” given a penchant for hedging at that level in large amounts. And there’s someone on the other side of all those purchases.Dealers are short a series of VIX calls, especially those with strike prices in the 20 to 24 range, “in massive size due to the ‘50 Cent’ entity’s massive hedging program flows,” Nomura strategist Charlie McElligott wrote via email on Wednesday. “This fund’s return to the VIX options market has the Street beyond capacity because as dealers get short this VIX upside, they have to go out and buy all sorts of crash protection due to their synthetic position.”Read: ‘50 Cent’ Copycat Likely Made $170 Million Hedging During RoutJPMorgan Chase & Co. sees 20 as particularly key for VIX.“We are seeing relatively elevated gamma imbalance tilted toward the calls, with large concentration around the 20 strikes,“ said Peng Cheng, a JPMorgan global quantitative and derivatives strategist. “Since dealers are likely to be short gamma, one would expect ‘reverse pinning,’ i.e. VIX futures to be repelled away from the 20 strike. Therefore the 20 level is likely to be a floor/support for the VIX August future.”The VIX closed down 4.2% at 21.18 on Thursday, while VIX volatility (VVIX) fell 1.5% but remained near its highest levels since October 2018. Six of the VIX’s last nine sessions have seen double-digit percentage moves as markets are whipsawed by U.S.-China trade developments and geopolitical tensions. Skew, the cost of bearish options compared with bullish ones, has gotten expensive and forced investors to look hard for cheap protection. And the MOVE Index, which measures prices swings in Treasuries, is the highest since February 2016.Read: Stock Turmoil Sparks a Wall Street Hunt for Cheap Hedges“VIX, volatility of volatility (VVIX) and skew have been saying over course of July that we were either going to crash up or crash down,” McElligott wrote. “So clearly all this short gamma for dealers in the VIX complex means chase-y moves in either direction, especially with the rates volatility spasm.”(Adds JPMorgan comment and updates market levels.)\--With assistance from Luke Kawa.To contact the reporter on this story: Joanna Ossinger in Singapore at jossinger@bloomberg.netTo contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Dave Liedtka, Rita NazarethFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- InvestorPlace
WeWork Stock’s Numbers Just Don’t Work for its Coming IPO
WeWork's parent company The We Company has filed on behalf of its shared workspace brand to go public under the ticker symbol WE, but hasn't yet chosen which exchange to list it on. Nevertheless, the $1 billion raise has both Wall Street and tech reporters excited, if for different reasons.Source: Mitch Hutchinson / Shutterstock.com Wall Street hopes the "space as a service" business can re-ignite an IPO market disappointed by the performance of Uber (NYSE:UBER), which still sells for less than its initial $42 trade. But, many tech reporters argue that WeWork isn't a tech company at all.WeWork's S-1 describes a way to put workers into high-class space for less than half the cost of a standard lease. The idea is to aggregate office demand from large employers. It bases a $47 billion valuation on losses of $690 million over the last six months, evidence of just what a ground-floor opportunity this is.InvestorPlace - Stock Market News, Stock Advice & Trading Tips The Magic of LeverageThe most interesting chart in the S-1 compares where WeWork is today against where it hopes to be 9-18 months from now. The money is currently in finding space and building it out, but the money will soon come from selling monthly memberships to fill the space. It claims to have 528 co-working spaces in 111 cities across 29 countries. Half of WeWork's 527,000 members reside outside of the United States. * 10 Stocks Under $5 to Buy for Fall Its rival IWG (OTCMKTS:IWG), formerly known as Regus, rents small offices in suburban locations. WeWork on the other hand is splashing its name all over downtown office towers. IWG made a profit last year on revenue of $3.4 billion and has a market cap of just under $3.7 billion. Last year, WeWork lost $1.9 billion on revenue of $1.8 billion and claims a $47 billion market cap.How is this possible? Some of it is due to its backers, like Benchmark Capital, JPMorgan Chase (NYSE:JPM), and the SoftBank (OTCMKTS:SFTBY) Vision Fund. Part of it is due to global ambitions, its use of expensive real estate and its seeking of high-profile corporate lessors. Part of it is just hype.Bloomberg Opinion's Shira Ovide, who writes about technology, tweeted that WeWork's IPO filing is "… THE MOST BANANAS THING I HAVE EVER READ." She also writes that WeWork is "the most magical unicorn" to ever come to market. WeWork vs. UberUnlike Uber, which developed a scaled market before coming public, The We Company is coming public ahead of its key growth period. In addition to its small equity raise, the company is also pursuing an asset-backed loan of $6 billion. Should the stock hold its IPO price -- and the limited float gives it a good chance of that -- its backers can mark nearly 150 million pre-IPO shares to market and clear enormous paper profits.WeWork is also playing the dual-share game to the hilt. IPO investors will get shares with one vote each. Class B and Class C shareholders, like founder Adam Neumann, get 20 votes per share. The Bottom Line on WeWork StockUber is an example of a 2010s' unicorn. It went public after creating its market as a scaled, if money-losing company. WeWork is more like a 1990s' Internet IPO, with more zeroes attached to it. Public investors are getting in earlier in the business' growth process, at least according to the prospectus.But the critics are right. WeWork is not a tech company. A chart in its S-1 shows Facebook (NASDAQ:FB), Salesforce (NYSE:CRM), and Cisco Systems (NASDAQ:CSCO) using We services, space and products to cut the costs of growth.But what they're doing is renting contingent space, only some of which they'll use. Maybe The We Company is just a corporate real estate version of LA Fitness (OTCMKTS:LFSA).Dana Blankenhorn is a financial and technology journalist. He is the author of the environmental story, Bridget O'Flynn and the Bear, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in CSCO and JPM. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks Under $5 to Buy for Fall * 5 Stocks to Avoid Amid the Ongoing Trade War * 7 5G Stocks to Buy Now for the Future The post WeWork Stock's Numbers Just Don't Work for its Coming IPO appeared first on InvestorPlace.
- Business Wire
JPMorgan Chase Declares Preferred Stock Dividends
JPMorgan Chase & Co. declared dividends on the outstanding shares of the Firm’s Series V and X preferred stock. Information can be found on the Firm’s Investor Relations website at jpmorganchase.com/press-releases.
- Investopedia
Top 3 Books to Learn About Blockchain
Here are reviews of three of the best available books on blockchain, a relatively new, but rapidly growing and very important technology.
- Bloomberg
Cloudflare Files for IPO Citing Publicity Over 8chan as Risk
(Bloomberg) -- Cloudflare Inc., a firm that helps websites protect and distribute content, warned potential investors in its initial public offering that risks to its business go beyond the boilerplate Silicon Valley advisory that it may never become profitable.The San Francisco-based company said in its IPO filing Thursday that the risks include negative publicity from the use of its network by 8chan, a website favored by white supremacists and used by gunmen before mass shootings in El Paso, Texas and Christchurch, New Zealand, this year. It also cited the use of its services by neo-Nazi website The Daily Stormer around the time of the 2017 protests in Charlottesville, Virginia.Activities of such groups have had “significant adverse political, business, and reputational consequences” for the company, Cloudflare said in the filing. Terminating those accounts, though, has raised censorship concerns, it said.“We received significant adverse feedback for these decisions from those concerned about our ability to pass judgment on our customers and the users of our platform, or to censor them by limiting their access to our products, and we are aware of potential customers who decided not to subscribe to our products because of this,” according to the filing.Cloudflare co-founder and Chief Executive Officer Matthew Prince has publicly struggled with decisions balancing freedom of speech on the internet with the need to limit hateful, racist online posts and potentially dangerous calls for violence.Risky PrecedentAfter deciding to cut services to The Daily Stormer, Prince said the move could set a dangerous precedent.“After today, make no mistake, it will be a little bit harder for us to argue against a government somewhere pressuring us into taking down a site they don’t like,” Prince wrote.In its filing with the U.S. Securities and Exchange Commission, the company listed the amount of its offering as $100 million, a placeholder that will change when terms of the share sale are set later.Customers, LossesCloudflare said about 10% of Fortune 1,000 companies are paying customers. Its security services blocked an average of 44 billion cyber threats a day during the second quarter, it said.For the first six months of the year, Cloudflare lost $37 million on revenue of $129 million, compared with a loss of $32 million on revenue of $87 million for the same period last year, it said in its filing.Prince currently controls 16.6% of Cloudflare’s shares, according to the filing. Its largest investor is the venture capital firm New Enterprise Associates Inc., with a 20.4% stake, followed by Pelion Ventures with a 18.8% share and Venrock Associates with 16.2%.After going public, the company will have a dual-class stock structure that will give its Class B stockholders 10 votes per share, according to the filing.The offering is being led by Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. Cloudflare is applying to list the shares on the New York Stock Exchange under the symbol NET.(Updates with details of risks starting in second paragraph)To contact the reporter on this story: Michael Hytha in San Francisco at mhytha@bloomberg.netTo contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Michael Hytha, Alistair BarrFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Business Wire
CORRECTING and REPLACING PHOTO IHG® Rewards Club Premier Credit Card Launches Most Rewarding Offer Yet
To celebrate the offer, Chase and IHG® Hotels & Resorts kick off collaboration with Roadtrippers to inspire Americans to embark on domestic adventures
- Bloomberg
GE Left Itself Open to Short-Seller’s Critique
(Bloomberg Opinion) -- General Electric Co. is learning the price of its credibility shortcomings.Shares of the embattled industrial giant plunged more than 15% at one point on Thursday after Bernie Madoff whistle-blower Harry Markopolos published a damning critique of the company’s accounting. Markopolos is working on behalf of an unidentified hedge fund that is betting GE shares will decline. The company calls his claims “meritless,” and CEO Larry Culp deemed the report “market manipulation” in an e-mailed statement. I read the report (all 170-plus pages of it), and my first instinct was that none of the allegations — which range from GE’s need to immediately bolster its long-term care insurance reserves with $18.5 billion in cash to looming writedowns on its stake in Baker Hughes to the generally confusing way the company represents its finances — are particularly new, at least not for those who have been paying close attention. The scale of the potential problems is bigger than any others have estimated, and the person making the claims has a track record of exposing fraud, having warned the U.S. Securities and Exchange Commission about Madoff’s Ponzi scheme years before it became public. But the line from the report that stood out to me the most was this one: “Who’s being transparent — them or us?”The market is giving its verdict. A series of broken promises, presentation “errors” that later have to be corrected, a continuing tendency to micromanage Wall Street expectations to orchestrate optical “beats” and an unwillingness to do away with heavily engineered earnings adjustments have cost GE dearly in the credibility department. Regardless of the truth of Markopolos’s report — and again, there’s plenty to debate there — GE has surrendered the high ground in its defense.Just this week, Steve Winoker, GE’s head of investor relations, issued an update on the company’s power unit and sought to clarify “confusion” about the number of 7F gas turbines it has installed. GE says it has 900 units in service, which is up relative to the year-end total of 2017 and 2018. But marketing materials from those years put GE’s 7F installed base at more than 1,100 units. Winoker says those materials lumped other types of units into the 7F tally. But there was really no room for that kind of interpretation in the wording of the brochure. This disclosure follows outgoing CFO Jamie Miller’s acknowledgment in May of the “confusion” created when she referenced an industry data firm’s calculation of power-equipment orders on an earnings call in a way that made GE’s business appear more robust than it was. At the Paris Air Show in June, in response to a question from JPMorgan Chase & Co. analyst Steve Tusa, Jean Lydon-Rodgers, CEO of GE Aviation’s services arm, said the company’s CF34 and CF6 engines account for “slightly less” than half of repair shop visits, raising questions about how exposed that business may be to a drop in profitability once those older models are replaced. In a follow-up e-mail to investors, Winoker clarified the number is actually just less than a third.Maybe these are all inadvertent errors. But for a company that clearly needs to do more to bolster its transparency and credibility, it’s a troubling fact pattern and puts it on the back foot when countering Markopolos’s allegations.The primary focus of Markopolos’s analysis is GE’s long-term care insurance business, which he argues needs an immediate $18.5 billion cash influx with a $10.5 billion non-cash GAAP charge looming over the next few years because of tougher accounting rules. That’s on top of the $15 billion reserve shortfall GE disclosed in January 2018. GE’s argument that insurance reserves are “well-supported for our portfolio characteristics” runs up against the contrast between what appears to be a deeply researched, numbers-heavy analysis by Markopolos and its own opaque commentary and financial presentations.Is Markopolos’s estimate correct? He bases it off an analysis of loss ratios and reserves for comparable policies at insurers such as Prudential Financial Inc. and Unum Group. His numbers seem dire, but GE itself warned in its annual filing that a more sober outlook for investment yields and the rate at which insurance claimants get healthier could force the company to put up additional pretax GAAP reserves, with some scenarios demanding a $12 billion increase. Estimating the appropriate reserve amount is a careful dance of assumptions of various puts and takes, and you’d need a crystal ball to accurately predict what’s required here. But the underlying point is that GE isn’t being nearly as conservative as it should be with this business, especially given looming accounting rule changes. I made that argument in February.He also argues that GE shouldn’t consolidate the Baker Hughes results in its numbers and that it’s avoiding a writedown on that deal. I’m less troubled by this because GE has disclosed the size of the potential impairment once its stake in Baker Hughes drops below 50%, and it does clearly break out the earnings and cash flow contribution from the business. What could end up being most problematic for GE is Markopolos’s brief allusion to the disconnect between the aviation unit’s $4.2 billion in 2018 free cash flow and engine partner Safran SA’s disclosure that it loses money on each Leap engine produced and won’t recover cost of goods sold until the end of the decade at best. The true underlying financials of that business have been a fixation for critics who contend it’s not as solid as GE makes it out to be.Markopolos obviously has a vested interest in pushing down GE’s share price. But the company would be wise to focus less on his motivations and more on refuting the specifics of his claims with hard numbers of its own. That would go a long way toward rebuilding investors’ trust.To contact the author of this story: Brooke Sutherland at bsutherland7@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- GuruFocus.com
Bank of America Was Warren Buffett's Favorite Stock Last Quarter
Berkshire Hathaway bulked up its holdings of the lender in 2nd quarter Continue reading...
- Zacks
Stock Market News For Aug 15, 2019
Wall Street collapsed Wednesday following the inversion of main treasury yield curve.
- Zacks
Why Is JP Morgan (JPM) Down 8.1% Since Last Earnings Report?
JP Morgan (JPM) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
- Bloomberg
‘Century Bonds’ Take on New Meaning After Argentine Market Rout
(Bloomberg) -- Argentina’s century bonds may have been in the spotlight as the country’s assets tumbled this week, but there’s another 100-mark looming: the yield on its domestic securities.Peso bonds have lost almost half their value in dollar terms since President Mauricio Macri’s defeat in last weekend’s primary election, which sparked fears that populist opposition leader Alberto Fernandez will defeat him in the main vote in October. Prices on short-dated securities maturing in November next year have collapsed to 63 cents, equating to a yield of 89%.Losses on external debt have also been severe. Argentina’s dollar bonds are now the cheapest in the world, with average yields climbing to 27% on Wednesday from 11% last week, according to Bloomberg Barclays indexes. It’s a clear signal that traders think Argentina’s government may default on its obligations.Franklin Templeton’s Michael Hasenstab and Ashmore are among the investors that have been hurt by the sell-off.Still, the rout may have ended after Macri spoke with Fernandez on Wednesday to address the uncertainty ahead of the Oct. 27 election. Argentine Eurobonds gained on Thursday and spreads over U.S. Treasuries fell 132 basis points to 18.25 percentage points as of 1:20 p.m. in London, according to JPMorgan Chase & Co. indexes.To contact the reporter on this story: Paul Wallace in Lagos at pwallace25@bloomberg.netTo contact the editors responsible for this story: Dana El Baltaji at delbaltaji@bloomberg.net, Robert Brand, Srinivasan SivabalanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Morgan Stanley Forfeits Role in WeWork IPO After Losing Lead
(Bloomberg) -- Morgan Stanley famously nabbed this year’s largest initial public offering, thanks partly to its top technology banker’s moonlighting job as an Uber driver. But the firm is nowhere to be found on what’s shaping up to be the year’s second-biggest IPO, WeWork.Morgan Stanley stepped back from a lesser role in the deal after WeWork rejected its pitch to be the top underwriter, according to people with knowledge of the matter. The relationship became strained when the bank wouldn’t extend as much debt financing as WeWork was seeking from key lenders, the people said, asking not to be identified discussing non-public information.The lead roles on the IPO and debt financing are held by JPMorgan Chase & Co., one of WeWork’s biggest investors and a long-time banker to Chief Executive Officer Adam Neumann. On the IPO alone, underwriters could slice up what could be more than $122 million in fees, assuming WeWork ends up paying 3.5%, a figure the company was discussing with banks this month. The final payout hasn’t been disclosed.After the snub, Morgan Stanley chose not to commit as much as its biggest rivals to a $6 billion credit facility for the loss-making company, complaining about WeWork’s risk profile and credit requirements, people with knowledge of the matter said. It did offer to contribute a smaller amount along with a commitment from the bank’s largest shareholder and occasional partner, Mitsubishi UFJ Financial Group Inc. But WeWork wasn’t interested in that kind of arrangement, they said.Bankers at the firm knew their decision to balk at the full credit commitment would risk Morgan Stanley’s role on an IPO, which is slated for September, some of them said. WeWork lost $690 million in the first half of the year, according to a regulatory filing Wednesday.Representatives for Morgan Stanley, WeWork and MUFG declined to comment.Morgan Stanley’s move was a surprise, considering its years-long pursuit of WeWork’s business. Michael Grimes, the New York-based firm’s top technology banker, had previously made a pitch to Neumann for a starring role on the IPO, people familiar with the matter have said.Yet Grimes and Neumann didn’t hit it off, standing in the way of a closer partnership, the people said. Morgan Stanley’s competitors also had a leg up: Affiliates of both JPMorgan and Goldman Sachs Group Inc. are investors in the company.Morgan Stanley was among lenders that led a junk-bond offering for WeWork last year, and it previously underwrote almost $10 million of mortgages for Neumann’s own homes. It was also part of a credit facility almost four years ago with JPMorgan, Citigroup Inc. and Deutsche Bank AG.Morgan Stanley is also among WeWork’s clients. The bank hired the startup last year to overhaul some of its office space to make it more millennial-friendly.But unlike JPMorgan, Morgan Stanley wasn’t among banks to loan Neumann money with his privately held shares as collateral. That $500 million loan, which also involved UBS Group AG and Credit Suisse Group AG, was considered risky by Morgan Stanley’s bankers, the people said.WeWork’s IPO is expected to raise about $3.5 billion, second only this year to Uber Technologies Inc.’s $8.1 billion IPO in May. JPMorgan is leading WeWork’s $6 billion credit facility, and all the banks listed as arrangers are also underwriters on the IPO, including Goldman Sachs, Bank of America Corp., Citigroup and Barclays Plc.Morgan Stanley could still do business with WeWork in the future, people familiar with the matter said.(Updates with client relationship in 10th paragraph.)\--With assistance from Michelle F. Davis.To contact the reporters on this story: Sonali Basak in New York at sbasak7@bloomberg.net;Gillian Tan in New York at gtan129@bloomberg.netTo contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, Steve Dickson, Daniel TaubFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- GuruFocus.com
US Indexes Close Lower Wednesday With Inverted Yield Curve Concerns
S&P; 500 down 2.93% Continue reading...
- American City Business Journals
Exclusive: Why this major bank is coming to the Bay Area
Cincinnati-based Fifth Third Bank told the San Francisco Business Times Wednesday that the nation’s 18th-largest bank will soon have a “more robust presence” in the Bay Area. Fifth Third, led by CEO Greg Carmichael, also said Wednesday that its Fifth Third Securities Inc. unit hired Timothy Beach, Ari Citrin and Oliver Janssen as managing directors to lead its newly created renewable energy investment banking group. The team will remain based in San Francisco.
- American City Business Journals
JPMorgan Chase taps 2 senior bankers for investment, commercial arms in Dallas
JPMorgan Chase has added two new senior bankers in Dallas within its investment and commericial practices.
- Bloomberg
Oil Slips as Swelling Stockpiles Alarm Already-Panicked Market
(Bloomberg) -- Oil tumbled the most in a week as global financial markets swooned and swelling U.S. crude stockpiles reinforced fears about an economic slowdown.Futures closed down 3.3% in New York on Wednesday, joining a slide in equities that saw 98% of the stocks in the S&P 500 Index drop. American crude inventories posted a surprise increase for the second straight week, U.S. data showed. That accelerated a flight from commodities and other higher-risk assets as sagging Treasury yields sounded alarm bells for a recession.“People are panicking,” said Mark Waggoner, president of Oregon brokerage Excel Futures Inc. “They are saying ‘I can’t be long crude here if the economy is going to slow down.’ ”Despite a late-session rebound, West Texas Intermediate crude for September settled $1.87 lower at $55.23 a barrel on the New York Mercantile Exchange. The contract slipped below its 50- and 200-day moving averages, a bearish harbinger.Brent for October settlement decreased 3% to $59.48 on the ICE Futures Europe Exchange. The international benchmark traded at a $4.23 premium to same-month WTI futures.Fears of a recession spread after the yield on 10-year U.S. Treasuries fell below the rate on the two-year for the first time since 2007. The S&P 500 dropped as much as 3%. A contraction in Germany’s economy and weak retail and industrial activity in China added to hints of a slowdown that could stall oil demand.In the U.S., crude stockpiles grew by 1.58 million barrels, the U.S. Energy Information Administration said. It was the second straight week of surprise increases to inventories. Still, exports rebounded, gasoline stocks shrank and gasoline demand climbed to its highest in almost 30 years of record-keeping.While the data can be volatile, “in general, a crude build on a day when there’s growing concern about a recession is not going to do anything good for oil prices,” said Rob Thummel, managing director at Tortoise, a Kansas firm that oversees more than $16 billion in energy assets.The American stockpiles report puts more pressure on Saudi Arabia, which has pledged to cut exports to help stem the price rout, he said.“I think OPEC knows they need to get their imports to the United States down,” he said.\--With assistance from Grant Smith and Sharon Cho.To contact the reporter on this story: Alex Nussbaum in New York at anussbaum1@bloomberg.netTo contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Joe Carroll, Catherine TraywickFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- American City Business Journals
Chase is on for customers in Pittsburgh
Bank offers cash rewards as it prepares for the opening of its first branch in southwestern Pennsylvania.
