Groupon CEO, founders to keep shares after lockup

NEW YORK, Thu May 17, 2012 – Groupon Inc. Chief Executive Andrew Mason and the company’s other founders are planning to keep their shares in the company after a trading lock-up expires on June 1.

Groupon’s lock-up expiration will allow some pre-initial-public-offering investors to sell their shares, and analysts say that the approach of the expiration has put Groupon’s stock under additional pressure.

“We have no intention to sell,” Mason said during a webcast of an investor meeting on Thursday, adding that he believes in the long-term future of the online coupon company.

Groupon shares were down about 6 percent or 80 cents at $12.25 on Nasdaq in morning trade. But Clayton Moran, an analyst for Benchmark Co, said this was due to the volatile nature of the stock rather than anything Mason said.

“To hear that a third of the shares are not going to be sold is somewhat encouraging,” the analyst said.

The fact that Groupon sold a small chunk of its equity in the IPO makes such expirations more important.

Facebook boosts IPO size by 25 percent, could top $16 billion

NEW YORK/SAN FRANCISCO, Wed May 16, 2012 – Facebook Inc. increased the size of its initial public offering by almost 25 percent, and could raise as much as $16 billion as strong investor demand for a share of the No.1 social network trumps debate about its long-term potential to make money.

Facebook, founded eight years ago by Mark Zuckerberg in a Harvard dorm room, said on Wednesday it will add about 84 million shares to its IPO, floating about 421 million shares in an offering expected to be priced on Thursday.

The additional shares will be sold by early investors including PayPal co-founder Peter Thiel, Accel Partners’ James Breyer and investment manager Tiger Global Management, the company said in a filing.

The company itself has not increased the number of shares it will sell.

Zuckerberg’s voting power will be reduced to about 55.8 percent from about 57.3 percent after the IPO as a result of the issue of additional shares, the company said.

The expanded size, coupled with Facebook’s recently announced plans to raise the IPO price range, would make Facebook the third-largest initial share sale in U.S. history after Visa Inc. and General Motors.

The social networking company is drumming up massive demand for the offering even as slowing revenue and user growth spur questions about the long-term Facebook story.

Those concerns over revenue growth were underscored on Tuesday, when GM said it planned to pull out of advertising on Facebook.

Chesapeake Energy shares fall on downgrade, loan

OKLAHOMA CITY, Okla., Tue May 15, 2012 – Chesapeake Energy Corp. shares dropped as much as 6.5 percent on Tuesday following a credit rating downgrade and news that the natural gas producer will boost its borrowings to $4 billion from the planned $3 billion as it faces a liquidity crunch.

The company, facing a funding shortfall of $9 billion to $10 billion this year, said on Friday that Goldman Sachs and Jefferies Group would provide it with $3 billion.

Chesapeake’s cash flows have shrunk as natural gas prices slumped to their lowest levels in a decade, putting pressure on the second-largest U.S. producer of the fuel to raise money to fund drilling operations.

Ratings agency Standard & Poor’s said it had cut Chesapeake’s credit rating to “BB-” from “BB,” one notch lower into noninvestment, or “junk,” status. S&P cited shortcomings in the company’s corporate governance practices, concerns about loan covenants and the likelihood of a wider gap between operating cash flow and capital expenditures.

Reuters reported last month that CEO Aubrey McClendon had borrowed at least $1.1 billion against his personal stakes in the company’s wells from lenders who also had dealings with Chesapeake, a deal that analysts and academics said raises possible conflicts of interest.

Hershey lifts outlook on first-quarter beat; shares rise 3 percent

HERSHEY, Pa., Tue Apr 24, 2012 –  Hershey Co. posted a higher-than-expected first-quarter profit on Tuesday, helped by price increases, and raised its full-year outlook, sending the candy maker’s shares up more than 3 percent.

The maker of Reese’s peanut butter cups, Twizzlers and Kit Kat bars said price increases were responsible for its 10.7 percent increase in first-quarter sales. Volume, which dipped slightly due to those increases, was still better than expected.

“It is unusual for any food company, in our experience, to raise guidance this early in the fiscal year, and we interpret today’s guidance raise as a particularly strong signal,” said JP Morgan analyst Ken Goldman.

Hershey’s strong results came a day after Kellogg Co. cut its full-year outlook after a disappointing first quarter that was hurt by weakness in Western Europe and in some product categories in the United States.

Hershey, the world’s largest chocolate maker, is often viewed as having more pricing power than some of its food industry peers, since chocolate often serves as an affordable luxury or indulgence.

The second quarter should see shipments of new products accelerate, with the roll out of Jolly Rancher Crunch ‘N Chew and the launch of Rolo Minis and Ice Breakers Duos. The company is also launching Hershey’s Simple Pleasures, with 30 percent less fat than the average chocolate.

Apple investors brace for more turbulence next week

SAN FRANCISCO, Wed Apr 18, 2012 – Apple Inc’s. results will be dissected more closely than ever next week, after a share swoon raised concerns on Wall Street that the stock’s gravity-defying rally may be losing steam.

Five straight days of stock losses for the world’s most valuable company sparked fears it had ventured into dreaded bubble territory and was overdue for a strong pullback. Shares reversed course on Tuesday, gaining 5 percent.

Between major legal challenges across several continents, increasing competition from Google Inc’s Android — now the world’s most-used mobile software — and confusion over what its next groundbreaking product will look like, more cautious investors are re-evaluating their positions and cashing in some holdings ahead of Apple’s second-quarter earnings next Tuesday.

There’s reason for caution: Apple’s shares surged nearly 60 percent to a high of $644 this year. The slightest sign of trouble in the earnings report may prompt further profit-taking.

“Any disappointment in Apple could lead to a significant selloff in the short term,” said Channing Smith, co-manager at Capital Advisors Growth Fund. “Are we long term believers in Apple? Absolutely, but as we move forward…you get up here to over $600 and you say, ‘Hmm, this is getting pretty frothy, expectations may be getting out of line.'”

Apple shares fell 7 percent when the company missed Wall Street expectations for the first time in years last October.

Clearwire shares fall on Google stake sale

NEW YORK – Clearwire Corp. shares fell 6 percent on Friday after Google Inc. said it would sell its stake in the company.

An analyst said that Google’s sale of the shares at a discount could be followed by other investors ditching their shares in the wireless service provider.

Google would reap just over $47 million from the sale of the shares, implying a massive loss of $453 million for Google, which invested $500 million in Clearwire in 2008. Google has already taken impairment charges of $443 million in recent years related to the investment.

Cable operators, including Comcast Corp. and Time Warner Cable, also have invested in Clearwire, which is majority owned by Sprint Nextel.

Since the cable operators have recently entered an agreement to resell mobile services from Verizon Wireless, the biggest U.S. mobile service, the concern is that they will also sell their stakes in Clearwire. Before the Verizon deal the cable operators depended on Clearwire as their wholesale provider.

“With no strategic reason to hold Clearwire shares, these ownership stakes could also make their way into the market,” said Evercore analyst Jonathan Schildkraut.

Time Warner Cable said it does not have any immediate plans to sell its stake in Clearwire.

A representative for Comcast were not immediately available for comment.

According to a document filed with regulators on Friday, Google said it would sell the 29.4 million shares it holds in Clearwire for $1.60 per share to Clearwire’s other strategic investors, which include Intel Corp. or on Nasdaq.

Airline shares tumble on oil price rally on stock market

NEW YORK – Airline shares fell broadly on Tuesday, with US Airways Group’s stock leading the decline, as the price of oil rallied, which directly influences the cost of jet fuel.

US Airways shares plummeted 10.4 percent to $7.97 on the New York Stock Exchange. Shares of United Continental Holdings were down 7.78 percent at $21.55, and Delta Air Lines’ shares fell 6 percent to $10.18, both on the NYSE.

U.S. crude oil futures rose $1.52 to $104.76 after trading beyond $105 for the first time since May 2011. The gains followed news on Monday that Iran halted exports to British and French companies ahead of a European Union embargo.

Jet fuel is one of the highest costs for airlines. US Airways, which does hedge its fuel consumption to offset shocks, is more vulnerable than rivals to price spikes, said Basili Alukos, an airline analyst at Morningstar.

The airline industry has been struggling to maintain stability after a years-long downturn that was exacerbated by volatile fuel prices.

Google’s Schmidt may sell about 2.4 million shares

MOUNTAIN VIEW, Calif. — Google Inc. chairman Eric Schmidt could sell as many as 2.4 million shares of the company’s class A common stock as part of a predetermined stock trading plan.

In a filing with the U.S. regulators, the company said Schmidt adopted the Rule 10b5-1 plan last November and could begin selling shares this month.

Schmidt, who stepped down as Google’s chief executive last April after a decade of “adult supervision,” could bring down his voting power on the company’s stock to about 7.3 percent if he sells all the shares under the plan.

As of Dec. 31, he held 9.1 million shares of Google’s Class A and Class B common stock – wielding about 9.7 percent voting power.

If Schmidt sells his shares under the plan, his overall stake would fall to 6.7 million class A and B shares — based on Google’s outstanding shares as on Dec. 31 – or about 2.1 percent of outstanding capital stock.

Schmidt, who led Google starting in 2001 to bring more management experience to a then-fledgling company, became executive chairman of the Internet giant’s board after stepping down.

Optimism springs eternal in Cisco shares ahead of results

NEW YORK/CHICAGO – Cisco’s earnings have had a way of crushing the dreams of optimists in the last two years.

Shares of the computer networking giant have often rallied ahead of its earnings report, sparking bullish sentiment among options players, only to fall sharply after the company fails to meet lofty expectations.

There are fears this will happen again when the company reports results after the close of trading on Wednesday. The stock has been on a roll, rising more than 50 percent from a 52-week low to levels not seen in a year.

“There is a lot of optimism from option traders heading into earnings,” said Joe Bell, senior equity analyst at Schaeffer’s Investor Research in Cincinnati. “If the results do not meet expectations, there may be a lot of downside.”

The day after five of the last six earnings reports, Cisco Systems Inc shares have been hit hard. The stock fell 10 percent on August 12, 2010, 16 percent on November 11, 2010 and 14 percent on February 10, 2011, according to Reuters data.

The one exception in the last six quarters was in August 2011, when the shares gained 16 percent the day after results.

Wall Street expects Cisco to report a stable quarter, buoyed in part by improving enterprise demand in the United States.

Cisco has outperformed its peers this year, rallying 11.7 percent, and options activity has been tilted to the bullish side.

Heading into Wednesday’s earnings report, investors bought 3.61 calls for every put on three U.S. options exchanges as new positions over the past 10 trading sessions, according to Schaeffer’s data. That gauge clocked in higher than 79 percent of the readings taken during the past year.

Sentiment in Cisco is among the most optimistic in the S&P 1500 index, “so even a slight disappointment in earnings could whack the stock,” said Jason Goepfert, president of SentimenTrader.com in Minneapolis.

Facebook to stop honoring trades in shares for three days: source

SAN FRANCISCO – Facebook, the social networking company poised to go public this year, will not honor trades of its shares in the secondary markets for a three-day period beginning on Wednesday, according to a person familiar with the matter.

Lawyers representing Facebook sent a letter last week to at least one of the special markets where private company shares are traded informing them of the move, the source said. The letter, from the law firm Fenwick & West, did not provide a reason for temporarily halting private transactions of Facebook shares.

The suspension, which runs from Wednesday to Friday, comes as anticipation is building for Facebook to sell shares to the public later this year.

The fact that Facebook will not honor secondary market trades in its shares for three days does not necessarily mean the company is getting closer to filing a prospectus for an offering.

Facebook officials declined to comment. News of the suspension in honoring Facebook trades was first reported by Bloomberg News on Tuesday.

Shares of Facebook, the world’s largest Internet social networking company with more than 800 million users, recently traded at $34 a share on SharesPost, according to information posted on the website. That gives Facebook an implied valuation of $80 billion, according to SharesPost.