Financial Mines

News and notes from the business reporters for the Connecticut Media Group.

Archive for the ‘Wall Street’ Category

Nasdaq files non-compliance notice on Interactive Brokers

Wednesday, May 23, 2012 by:Rob Varnon

Greenwich-based broker and market maker Interactive Brokers Group Inc. announced is received a non-compliance notice from the Nasdaq Stock Market last week.

IBG said Nasdaq said the Greenwich firm’s last 10-Q report was missing Sabannes-Oxly certifications and and had not been reviewed by auditors.

Nasdaq requires the company to file a plan by July 16 to correct the situation.

The company said it has to resolve a comment from its independent public accounting firm rearding the presentation of equity in its consolidated financial statements, but is moving to produce a final version of its results for auditors.

The usual suspects in JPM European trade debacle

Tuesday, May 22, 2012 by:Rob Varnon

The Wall Street Journal appears to have sniffed out who was on the end of those ill-fated J.P. Morgan trades in Europe, which the bank estimates could cost it $2 billion.
It’s the usual suspects, including Goldman Sachs, the Journal reported.
Reminiscent of its role in AIG’s horror show in 2008, Goldman shows its talent for finding a mark four years later.

http://on.wsj.com/JaGgPg

Facebook Friday hits the Street and digital world

Friday, May 18, 2012 by:Rob Varnon

Well, well well, looks like Facebook was very appropriately priced at $38 as it closed at $38.23 Friday in its inaugural trading day.
FB opened at $43 a share, and as one veteran newswoman remarked in Stamford, mirrored the internet bubble in one day. At one point, the social network site was up 10 percent, but at the end it succumbed to doubts about its future revenue production.
Questions have ranged from whether enough users will click on ads to whether the ads themselves will produce enough business to keep advertisers interested in paying for them.
But the overarching issue the company faces as it transitions from a private entity is that now it must enhance shareholder value or suffer the wrath of the market.
The IPO was priced at $38 a share valuing the company at $104 billion and making CEO and founder Mark Zuckerberg a $30 billion man. Here’s how the digital world saw it leading up to trading on Friday.

SEC halts trading in 379 microcaps on pump-and-dump worries

Wednesday, May 16, 2012 by:Rob Varnon

The SEC has halted trading in 379 stocks in an effort to crack down on the fraudulent trading of dormant microcap companies.

It’s the largest single trading suspensions in the SEC’s history.

Regulators say they’re concerned that con-artists are using pump-and-dump schemes involving stocks of shell companies listed.

What the perpetrators do is buy shares in these stocks to drive up their price while also marketing them to potential investors, usually spinning a story about potential improvements in business or other moves. Then they sell their shares for a premium leaving the investor holding a worthless security.

Here’s a list of the stocks have been suspended:

http://www.sec.gov/litigation/suspensions/2012/34-66980.pdf

JPM saga continues with DOJ inquiry

Tuesday, May 15, 2012 by:Rob Varnon

JP Morgan’s problems over its synthetic credit hedges are ballooning beyond the potential $2 billion in losses disclosed last week, with The Wall Street Journal reporting the Department of Justice is on the case.

The news broke on the same day that JPM held its annual meeting and CEO and Chairman Jamie Dimon kept his title as chairman after the proxy vote.

There has been a movement among some big investors to force boards to split the role of CEO and Chairman in order to provide a check on the power of the CEO.

U.K. regulators were already asking questions about JPM’s trades in derivatives hedging against interest rate risk.

While Dimon and JPM’s problems continue to play out, a savvy financial guy told The Mines today the real lesson in this is to ask questions when things look terribly good. He pointed out JPM got a $5 billion lift a couple of years ago from the same trading group and someone in management should have been asking someone to explain that.

After all, big rewards come from big risks, no?

In other JPM news, the CFTC posted notice that whistleblowers who tipped them off to JPM’s failure to properly handle Lehman Brothers segregated customer accounts. JPM settled the allegations in April agreeing to a $20 million fine.

Whistleblowers can file to collect what some in the business refer to as a bounty within 90 days of today’s notice.

Trying to hang onto gains in the falling market

Monday, May 14, 2012 by:Rob Varnon

Heading into the last hour in the trading day, several Connecticut companies tried to cling to gains, including two energy companies.
Bolt Technology was up more than 5 percent Monday to $12.90, but was declining as the market continued to lose ground. It was last up 33 cents to $12.60, representing a 2.69 percent gain for the maker of oil exploration equipment.
Prime Energy Corp, was up more than 14 cents late in the day to $24 a share, but the oil and natural gas producer finally gave up its gains right before 3 p.m. and dropped 56 to $23.30.
Hexcel was up 18 cents. Webster Bank continued to hang onto a 2 cent gain and Xerox added 6 cents.
The market was hammered from the opening Monday and the Dow was off 112 points.
Sturm Ruger, which has been on a big run this year, was off 5 percent ad was equipment rental company, United Rentals.

JPM debacle washes across markets and digital world

Friday, May 11, 2012 by:Rob Varnon

The Dow couldn’t rally its way out from under the weight of JP Morgan’s $2 billion trading loss disclosure Friday and dropped 34 points to 12,820 while the S&P 500 was off 5 points to 1,353. The Nasdaq gained a point. JPM was down more than 9 percent to $36.96 Friday even before Fitch downgraded its long and short-term debt issuer ratings.

JP Morgan’s disclosure on Thursday continued to command attention on Friday and reports came in that regulators on both sides of the Atlantic were investigating the blunder that involved the bank’s attempts to hedge its credit risk. While details are emerging on the problem there could be implications for Connecticut’s financial industry as regulatory reform backers catch a new wave of ire over Wall Street banks’ behavior.

It’s particularly important here, as it’s been surmised that on the other end of those JPM trades were hedge funds. Whether that sets off more calls to regulate the hedge fund industry has yet to be seen, but expect a fight in this political season.

Sparse volume moves shares of Biodel and Prime Energy

Thursday, May 10, 2012 by:Rob Varnon

A Danbury pharmaceutical developing drugs to treat diabetes and a Stamford-based oil and natural gas company saw their shares slide Thursday on low volume after reporting earnings.

Biodel Inc., which is developing new insulin and other drugs at its Danbury lab and headquarters, said it pared its loses in the quarter March 31, 2012 to $4.3 million, or $0.11 per share, compared to a net loss of $5.4 million, or $0.21 per share, for the same period a year ago. The company said it has no revenues to report but is making progress on several insulin formulas now in trial.

Analysts were expecting a loss of 15 cents, but like other pharmas, Biodel does have exposure to the European recession. Many pharmas carry out trials and research on the other side of the Atlantic, where rules are a bit more friendly to the development of drugs.

Shares in Biodel slipped 2 cents to 69 cents in trading on the Nasdaq Stock Market. Only 60,475 shares were traded when the average volume is 250,000.

Down county in Stamford, Prime Energy Group saw its shares slide more than 3 percent despite reversing last year’s loss.

Shares in Prime, traded on the Nasdaq, fell almost 4 percent to $24.50 on volume of 1,250 shares. About 1,221 shares trade on average.

The company reported net income of $1.3 million, or 39 cents per diluted share, for the most recent quarter, compared to a loss of $2.3 million, or 86 cents a share.

No analysts have given estimates for Prime’s most recent quarter.

Prime credited the positive swing in revenues to higher oil prices, higher production from its wells, increased natural gas sales as well as avoiding the losses from a year ago on oil commodities contracts.

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