Tag: stock market

Shares of Neos Therapeutics Inc. sank 3.5% in premarket trade Monday, after the company said it rejected PDL BioPharma Inc.’s unsolicited buyout bid. The drug maker said PDL’s proposal to buy Neos for $10.25 a share, which was made public last week, was identical to the proposal made in June, July and September that have been rejected. “After a comprehensive review, conducted in consultation with its financial and legal advisors, the Neos board affirmed its previous determinations that PDL’s proposal undervalues Neos, does not reflect Neos’ strategic value and future prospects for continued growth and value creation, and is not in the best interests of the company or Neos shareholders,” Neos said in a statement. Neos’ stock had soared 72% year to date through Friday, while PDL shares had run up 44% and the S&P 500 had gained 15%.

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General Motor Co. shares slid 3% in premarket trade Monday, after Goldman Sachs downgraded the stock to sell from neutral, saying it expects the car maker’s earnings to take a downward turn in 2018. Analysts led by David Tamberrino said they are negative on the overall original equipment manufacturer sector, but are extra negative on GM. “Looking ahead into 2018 and given the current valuation level, we see a downward inflection in GM earnings and consequently downgrade shares to sell,” analysts wrote in a note. “We expect that a normalization in SAAR coupled with the company’s product launches in 2018 will weigh on GMNA profitability.” Goldman is expecting GM to see volume and mix headwinds in 2018 and expects 2018 EBIT-adjusted earnings to be down 22% and to shrink margins. Shares have gained 28% in 2017, while the S&P 500 has gained 15%.

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Paul Manafort and one of his former business associates were told to surrender to federal authorities on Monday, according to the New York Times. The Times said charges against Manafort, who was formerly President Donald Trump’s campaign chairman, and associate Rick Gates were not immediately clear. But they are the first charges in a special counsel investigation, the Times said.

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J.C. Penney Co. Inc. was downgraded to neutral from positive after the retailer announced a profit warning for the third quarter and full year. Its price target was lowered to $3 from $6.50. “While J.C. Penney is taking the right steps to fine-tune its footprint and merchandise mix and will continue to pay down debt with free cash flow, the sales-driving initiatives are taking longer than we expected to materialize,” wrote analysts led by Bill Dreher. Analysts say they “no longer have a constructive rating within the department store sector,” favoring Top Pick, Wal-Mart Stores Inc. . Citi also downgraded J.C. Penney, according to The Wall Street Journal. On Friday, J.C. Penney updated its guidance, saying its efforts to sell off “slow-moving” merchandise, particularly across women’s apparel, gave the company a sales books, but hurt cost of goods sold and earnings in the near-term. The announcement pulled down shares of other retailers, including Macy’s Inc. and Kohl’s Corp. . J.C. Penney shares are down 1.3% in Monday premarket trading, Macy’s shares are down 2.4% and Kohl’s shares are down 0.2%. J.C. Penney shares are down more than 63% for the last year while the S&P 500 index is up 21.4% for the period.

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Under Armour Inc. shares slipped 2.7% in Monday premarket trading after analysts say the Curry 4, a new shoe release bearing the name of NBA superstar Steph Curry, was late to stores. The Curry 4 was supposed to be released on Friday, according to Susquehanna Financial Group. The kid’s shoe was available on Under Armour’s, Foot Locker Inc.’s , Dick’s Sporting Goods Inc.’s and Hibbett Sports Inc.’s websites, but pre-orders were available for the adult shoes, now available on Nov. 18. “It appears as if a combination of issues relating to Under Armour’s SAP implementation and some last minute design changes caused the delay,” wrote analysts led by Sam Poser. “Retailers with whom we have spoken are not happy and concerned that when the Curry 4 does arrive, the target customer will have already moved on to other things.” Under Armour shares are down more than 48% for the past year while the S&P 500 index is up 21.4% for the period.

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For-profit education companies Strayer Education Inc. and Capella Education Co. said Monday they will combined in a merger of equals with a implied equity value of the combined company of $1.9 billion. Under terms of the deal, Capella shareholders will receive 0.875 Strayer shares for each Capella share they own. Based on Friday’s stock closing prices, that values Capella shares at $80.26 each, which implies a 22.5% premium. After the deal closes, which is expected in the third quarter of 2018, Strayer shareholders will own 52% of the combined company, which will be named Strategic Education, with a ticker symbol “STRA.” The deal is expected to add 20% to 25% to Strayer’s earnings per share by 2019. The announcement confirms a report in The Wall Street Journal over the weekend that said the companies were nearing a deal. Shares of both Strayer and Capella were still inactive in premarket trade. Capella’s stock had tumbled 25.4% year to date through Friday, while Strayer shares had rallied 13.8% and the S&P 500 had climbed 15.3%.

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Shares of Dynegy Inc. rallied 3.7% in premarket trade Monday, after the energy company said it agreed to merger with fellow power generation company Vista Energy Corp. in a deal that values Dynegy at over $1.7 billion. Under terms of the deal, Dynegy shareholders will receive 0.652 shares of Vista for each Dynegy shares they own. Based on Friday’s closing prices, the deal values Dynegy shares at $13.24 each, an 18% premium. With 131.2 million shares outstanding, that would put Dynegy’s market capitalization at about $1.74 billion. Vista’s market cap through Friday was $8.68 billion. The companies said the merger would make over $5 billion in excess capital available for capital allocation. The companies expect $500 million to $600 million in net present value benefit from tax synergies. The Wall Street Journal had reported last Thursday that the companies were in merger talks. Dynegy’s stock had run up 33% year to date through Friday, while Vista’s stock had rallied 31%, the SPDR Energy Select Sector ETF had shed 11% and the S&P 500 had climbed 15%.

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Cooper Tire & Rubber Co. shares were indicating lower in premarket trade Monday after the company reported a third-quarter profit beat and revenue miss and said it expects a lower-than-expected fourth-quarter operating margin. Earnings for the latest quarter rose to $61.7 million, or $1.18 per share, from $49.3 million, or 90 cents per share in the year-earlier period. The FactSet adjusted earnings-per-share consensus was 85 cents. Revenue rose to $733.8 million from $750.9 million, compared with the FactSet consensus of $788.0 million. The latest results reflect “continued challenges within the tire industry including raw material cost variability, weak trends in retail sell-out of tires to consumers, elevated inventory in the channels and a fluid promotional landscape,” and exacerbated by recent U.S. hurricanes, said Cooper Tire Chief Executive Brad Hughes. Cooper Tire also said that it now expects a fourth-quarter operating margin below its previous mid-term target of 8% to 10%. Company shares have declined 2.2% over the last three months, compared with a 4.4% rise in the S&P 500 .

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The head of Wal-Mart Stores Inc.’s U.K. chain Asda will leave his post. Sean Clarke will step down as Asda’s chief executive on Dec. 31 and Roger Burnley will take the role of CEO and president effective Jan. 1. Walmart International chief Dave Cheesewright announced the changes on Monday, according to the Yorkshire Post newspaper. Clarke started as Asda’s chief in July 2016 after serving as the head of Walmart China. Burnley currently serves as Asda’s chief operations officer and deputy chief executive.

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Home builders Lennar Corp. and CalAtlantic Group Inc. on Monday said they plan to merge in a deal worth about $9.3 billion, including $3.6 billion in assumed net debt. Each CalAtlantic share will be exchanged for 0.885 share of Lennar Class A common stock in a move that values CalAtlantic shares at $51.34, a 27% premium to where they closed Friday, the two companies said in a news release. CalAtlantic’s stock traded 9% higher in thin premarket action, while Lennar was not yet active.

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