GE Healthcare

GE Healthcare Sells Assets to Private Equity Firm Veritas for $1.05 Billion

1:47 PM, Apr 2, 2018 — General Electric (GE) said its GE Healthcare branch sold off a part of its business to private equity firm Veritas Capital in a $1.05 billion deal, according to a statement on Monday.

A Veritas affiliate agree to buy the Enterprise Financial Management, Ambulatory Care Management, and Workforce Management assets that comprise GE Healthcare’s Value-Based Care Division for cash, the companies said.

“With Veritas’ support and resources, we are excited to continue deepening our commitment and capabilities to help healthcare providers manage their financial, clinical, and employee workflows across the continuum of care,” said Jon Zimmerman, vice president and general manager of value-based care solutions at GE Healthcare.

For Veritas, the deal gives it the ability to “take advantage of a $9 billion market that continues to benefit from favorable sector trends, particularly a real and urgent need to digitalize our healthcare system,” said Chief Executive Officer Ramzi Musallam.

GE Healthcare is the arm of the industrial conglomerate that provides medical technologies and services, from ultrasounds to delivery of anesthesia. It will “continue to significantly invest in core digital solutions, such as smart diagnostics, connected devices, AI and enterprise imaging,” said CEO Kieran Murphy.

The deal is expected to wrap up during the third quarter of this year.

Companies: General Electric Company
Price: 13.15 Price Change: -0.33 Percent Change: -2.48

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Tesla Motors

Tesla Shares Drop to Lowest in Almost a Year as NTSB Investigating Fatal Crash

3:28 PM, Mar 27, 2018 — Tesla (TSLA) shares plunged Tuesday after the National Transportation Safety Board said on Twitter that it’s investigating a fatal crash involving one of the company’s cars last week.

Two NTSB investigators are conducting a field investigation into the crash that happened on March 23 near Mountain View, California. It’s “unclear if automated control system was active at time of crash,” the NTSB said on Twitter. “Issues examined include: post-crash fire, steps to make vehicle safe for removal from scene.”

Tesla shares on Tuesday dropped 7.8% to the lowest level in almost a year.

Vilas Capital Management’s John Thompson told Marketwatch that Tesla will be bankrupt within four months unless Elon Musk “pulls a rabbit out of his hat.” He said he doesn’t see the company ever turning a profit and that its income statements is one of the worst he’s ever seen. Thompson has a big short position on the company — in fact, his fund’s biggest position is the Tesla short, according to Marketwatch.

Companies: Tesla, Inc.
Price: 280.33 Price Change: -23.85 Percent Change: -7.84

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facebook app on phone

Facebook Set for FTC Probe Into Privacy Practices Data Use; Expands Local News Content

2:48 PM, Mar 26, 2018 — The Federal Trade Commission added to the woes of Facebook (FB) on Monday, saying it would investigate the privacy practices of the social media giant in the wake of complaints about how data collected from profiles has been used.

The FTC said in a statement that it “has an open non-public investigation into these practices” after recent press reports raised “substantial concerns” about Facebook, which saw its stock price tumble again and skid to the lowest intraday since early July.

“The FTC is firmly and fully committed to using all of its tools to protect the privacy of consumers,” said Tom Pahl, acting director of the FTC’s bureau of consumer protection.

Facebook has been under pressure in recent days after news reports that a British data science consultancy and marketing agency known as Cambridge Analytica could be in possession of Facebook user data that was improperly obtained by a researcher at Cambridge University.

In an interview with CNN, Facebook Chief Executive Mark Zuckerberg apologized for what he described as “a major breach of trust”, vowing to make sure that it would not happen again.

Earlier on Monday, Facebook said it will prioritize local news for its members in all countries, expanding an update which had already been put in place for US-based users of the social media company earlier this year.

The company said that it is expanding the update, whose objective is for people to see topics that have a direct impact on their community and discover what is happening in their local area, to “people in all countries, in all languages.”

“Now, people around the world will see more news on Facebook from local sources covering their current city and other cities they may care about,” a statement issued by Alex Hardiman, head of news product, and Campbell Brown, head of news partnerships, said on Monday.

“With this update, we’re helping local publishers who cover multiple, nearby cities reach audiences in those cities. We’ll consider a publisher as local to multiple cities if the people in those cities are more likely than the people outside of those cities to read articles from the publisher’s domain,” the statement continued.

Price: 154.26 Price Change: -5.13 Percent Change: -3.22

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Facebook App on phone

Facebook’s ‘Delayed’ Responses From Zuckerberg to Data Breach Can’t Stem Stock Losses

11:08 AM, Mar 22, 2018 — Facebook (FB) founder and Chief Executive Officer Mark Zuckerberg’s comments about the Cambridge Analytica data breach weren’t enough to stem the selling pressure on the social media giant’s shares Thursday as they brought mixed reactions from analysts.

“We have a responsibility to protect your data, and if we can’t then we don’t deserve to serve you,” Zuckerberg said in a Facebook post late Wednesday. He said the company took actions “years ago” to prevent the same breach from happening again, but said he was working to understand what took place.

Shares in Facebook were down about 1.4% at the time of writing, and have dropped for three of the last four sessions. A close at current levels would be the lowest in six months.

Zuckerberg said Facebook changed their platform in 2014 to “prevent abusive apps” by limiting what data they could access. The company plans to investigate other apps that had access to data before the 2014 change, and will restrict developers’ access to data “even further.”

In a note Thursday, RBC Capital Markets analyst Mark Mahaney said the actions were “delayed — but appropriate — responses and steps by Facebook, and believe they should help address some of the recently rising user concerns.”

RBC reiterated its outperform rating and $250 price target on the stock, saying that “we view the medium- and long-term risk-reward as very compelling, though we acknowledge rising long-term regulatory risk and near-term user/usage volatility potential.”

Others weren’t as optimistic, and Stifel Nicolaus lowered its target to $168 from $195 while reiterating a hold rating. Stifel analyst Scott Devitt compared Facebook to online auction company eBay (EBAY), saying the companies are unstructured content businesses that lost trust before bringing in policies to add structure and process, according to media reports.

Companies: Facebook, Inc.
Price: 169.35 Price Change: -0.04 Percent Change: -0.02

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iheartmedia image

IHeartMedia Files for Bankruptcy Protection as It Reaches Deal to Cut Debt in Half

1:30 PM, Mar 15, 2018 — Radio station owner iHeartMedia, the parent of advertising company Clear Channel Outdoor (CCO), filed for Chapter 11 bankruptcy protection, reaching a deal with creditors to cut its $20 billion debt in half as it restructures its balance sheet.

San Antonio, Texas-based iHeartMedia said it has filed with the US Bankruptcy Court in Houston a series of motions to maintain business-as-usual operations. It also said that Clear Channel didn’t file for bankruptcy protection.

“The agreement we announced today is a significant accomplishment, as it allows us to definitively address the more than $20 billion in debt that has burdened our capital structure,” said Bob Pittman, the company’s chairman and chief executive officer. “Achieving a capital structure that finally matches our impressive operating business will further enhance iHeartMedia’s position as America’s #1 audio company.”

Reuters reported that iHeartMedia’s creditors will receive the company’s 89.5% stake in Clear Channel, which it said was the largest billboard company in the world.

“iHeartMedia believes that its cash on hand, together with cash generated from ongoing operations, will be sufficient to fund and support the business during the Chapter 11 proceedings,” the company said.

The bankruptcy filing comes after Pink Sheets-listed iHeart said it wouldn’t make a cash interest payment of $106 million that was due Feb. 1 and said it would utilize a 30-day grace period to make payments on the 14% senior unsecured notes due 2021.

Also last month, Liberty Media Corporation (FWONA) submitted a term sheet for restructuring iHeartMedia unit iHeartCommunications, proposing to buy a 40% stake for $1.16 billion.

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walmart checkout line

Retailers May Absorb Wage Pressure to Avoid Staff Losses in Fight Against E-Commerce, Barclays Says

2:02 PM, Mar 13, 2018 — Retailers might have to absorb rising wage pressures rather than cut staffing levels in a bid to preserve customer service to fight off the rising tide of e-commerce, Barclays said in an equity research note on Tuesday.

“Wage inflation has been an active investor discussion topic in recent months as strong employment trends have resulted in healthy wage growth across the US in general, and the retail sector specifically,” said analyst Chethan Mallela. There have also been “high profile” increases by companies including Target (TGT) and Walmart (WMT), he said.

Of the 19 retailers tracked by Barclays, 13 cited recent or prospective wage pressures in their fourth quarter earnings calls, with the impact most acutely felt among hourly workers, Mallela said.

Retailers have been facing rising pressure from online commerce companies like Amazon.com (AMZN), and Barclays said it might be harder than in the past to offset the wage level issues with staff changes because the median employee per square foot across a broad range of companies has decreased 11% over the last decade.

“Recent industry commentary has highlighted in-store service as a critical defense against share loss to e-commerce,” Mallela said. Companies may opt to absorb the impact “of higher wages going forward rather than sacrifice customer service levels.”

Walmart in January said it was lifting the starting wage for hourly workers to $11, while Target said in September it was boosting its minimum to $11 with a commitment to reach $15 by the end of 2020.

Michael Kors (KORS), Ralph Lauren (RL) and Tapestry (TPR) didn’t cite wage pressures on their earnings calls, Barclays said. While it’s less clear why Gap (GPS) and others “might also not be seeing wage pressure, we would caution that wages are a function of many idiosyncratic factors that can be difficult to externally evaluate,” the analyst said.

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Apple storefront

Apple Buys Magazine App Texture, Touting Commitment to ‘Trusted Sources’

12:57 PM, Mar 12, 2018 — Apple (AAPL) is buying digital magazine subscription company Texture and its parent, Next Issue Media, for terms that weren’t disclosed on Monday as the information technology giant touted its commitment to “trusted” news sources.

Next Issue Media is currently held by Vanity Fair and Wired owner Conde Nast; Elle and Good Housekeeping owner Hearst; Meredith (MDP), a Des Moines, Iowa-based media and marketing firm; Toronto-based Rogers Media, a branch of Rogers Communications (RCI); and investment firm KKR (KRR).

Texture was launched in 2010 and has over 200 magazines in its portfolio. Users get “unlimited access to their favorite titles for one monthly subscription fee,” according to a statement from Apple and Next Issue on Monday.

“We are committed to quality journalism from trusted sources and allowing magazines to keep producing beautifully designed and engaging stories for users,” said Eddy Cue, Apple’s senior vice president of internet software and services.

On its website, Texture is currently touting a free trial and a $9.99 a month fee after that. The company and its current owners “could not be more pleased or excited with this development,” said John Loughlin, chief executive officer of Next Issue Media/Texture. “We could not imagine a better home or future for the service.”

Companies: Apple Inc.
Price: 181.845 Price Change: +1.865 Percent Change: +1.036

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pharmacy

Cigna Set to Acquire Express Scripts for $54 Bn in Cash and Stock Deal

8:39 AM, Mar 8, 2018 — Health care company Cigna (CI) has agreed to purchase Express Scripts (ESRX), a provider of pharmacy benefit management services, in a cash and stock transaction aimed at creating an expanded portfolio of health services

The deal, which is expected to be completed by December 31 this year, will see a transaction consideration of $48.75 in cash and 0.2434 shares of stock of the combined company per Express Scripts share, or $54 billion in the aggregate. Including Cigna’s assumption of approximately $15 billion in Express Scripts debt, the transaction is valued at approximately $67 billion.

Upon closing of the transaction, Cigna shareholders will own approximately 64% of the combined company and Express Scripts shareholders will own approximately 36%. Cigna said that the combination is expected to deliver first year double-digit earnings per share accretion and enhance Cigna’s revenue and earnings growth.

“Cigna’s acquisition of Express Scripts brings together two complementary customer-centric services companies, well-positioned to drive greater quality and affordability for customers,” David Cordani, chief executive of Cigna, said.

“This combination accelerates Cigna’s enterprise mission of improving the health, well-being and sense of security of those we serve, and in turn, expanding the breadth of services for our customers, partners, clients, health plans and communities,” he added.

Price: 183.80 Price Change: -10.43 Percent Change: -5.37

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US Federal Reserve

Economy Continued to Expand From November Through December, Outlook Remains `Optimistic,’ Fed Says

3:51 PM, Mar 7, 2018 — The economy continued to expand from late November through the end of 2017 as 11 of the Fed’s 12 districts reporting modest to moderate gains and the 12th — the Dallas district — recording a “robust” increase, according to the Federal Reserve’s Beige Book released on Wednesday.

“The outlook for 2018 remains optimistic for a majority of contacts across the country,” the Fed said. “Most districts reported that non-auto retail sales expanded since the last report and that auto sales were mixed. Some retailers highlighted that holiday sales were higher than expected. Residential real estate activity remained constrained across the country.”

Home sales were constrained by limited inventories, and non-residential activity continue to experience slight growth. Manufacturers also reported modest growth in overall business conditions, the Beige Book said.

Some manufacturers raised capital expenditures in the reporting period, and growth was noted in transportation activity, the Fed said. Loan volumes were steady, agricultural conditions were mixed and energy respondents described a slight uptick in activity.

Employment grew at a modest pace since the prior report with most districts citing tightness in labor markets and challenges finding qualified workers that constrained growth.

“Several districts noted elevated demand for manufacturing and construction labor,” the Fed said. “Most districts said that wages increased at a modest pace. A few districts observed that firms were raising wages in a broader range of industries and positions since the previous report. Some districts reported that firms expect wages to increase in the months ahead.”

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NYSE Trading Floor_Equities

Stocks Fluctuate as Energy, Tech Shares Firm; Utilities and Consumer Names Slide

10:58 AM, Mar 6, 2018 — Equities were mixed on Tuesday, with the Dow Jones Industrial Average and the Standard & Poor’s 500 giving back their early gains while the Nasdaq Composite held in the green on strength in technology shares.

Stocks came out of the gate on a stronger note, following Monday’s surge higher after it emerged that North and South Korean leaders will meet at a summit next month, the first of its kind since Kim Jong-un became head of the reclusive northern nation.

The gains were scaled back after January factory orders came in at a decline of 1.4%, the first contraction since July. Investors are keeping a close eye on the week’s economic data ahead of ADP private payrolls Wednesday and the key non-farm jobs report Friday.

In company news, Target (TGT) sank 3.3% after reporting fourth quarter adjusted earnings that were below analysts’ expectations, while revenue beat views. J.C. Penney (JCP) slid 4.6%.

GrubHub (GRUB) shed 4.2% after it was downgraded to neutral from buy at Bank of America Merrill Lynch. Ciena (CIEN) jumped 9.6% after fiscal first quarter results beat Wall Street views.

Among the S&P’s sectors, the energy was up the most, rising 0.8% as oil prices firmed, and Chevron (CVX) rose 1.4% on the Dow as CEO Michael Wirth told an analyst meeting that the company intends to “grow free cash flow in 2018 and thereafter.”

Tech shares were up 0.6% while on the downside, utilities lost 1% and consumer staples slipped 0.5%.

In morning trading, the Dow was down 0.2%, the S&P 500 was little changed, and the Nasdaq was up 0.2%.

Globally, the Hang Seng jumped 2.1%, the Nikkei 225 rose 1.8%, the Shanghai Composite was up 1% and the FTSE 100 gained 0.8%.

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