Wall St. Brief: Research in Motion’s NIGHTMARE, Nike’s BOMBSHELL, and UK Bank Redress
Anheuser-Busch InBev (NYSE:BUD) will acquire for $20.1 billion the half of Grupo Modelo that it doesn’t already own. Meanwhile, Constellation Brands (NYSE:STZ) will do the same: purchase 50 percent of Crown Imports it doesn’t already own for $1.85 billion. Crown is a joint venture between Modelo and Constellation that imports Corona into the U.S.. The transaction may have come in an effort to potentially avoid antitrust issues about the bigger transaction.
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According to the U.K.’s Financial Services Authority, Barclays (NYSE:BCS), HSBC (NYSE:HBC), Lloyds (NYSE:LYG) and RBS (NYSE:RBS) will have to “provide appropriate redress” as a result of the cases from mis-selling interest rate swaps to customers. These incidents have resulted in a “severe impact” on numerous businesses said the regulatory agency.
If that wasn’t enough, RBS (NYSE:RBS) will likely be fined $233 million in relation to the Libor manipulation, reported Times of London while HSBC (NYSE:HBC), Citigroup (NYSE:C) and UBS (NYSE:UBS) are under investigation. With scandal’s fallout gaining speed, on Thursday, the British Bankers’ Association asked the U.K. government to intercede in the regulation of the Libor’s “setting mechanism.”
From Thursday’s first quarter earnings report, Research in Motion’s (NASDAQ:RIMM) shares are down 16 percent in premarket trading. The quarter’s numbers largely missed expectations with the company’s net loss per share of $0.37 from a $1.33 profit and revenue tanked 43 percent to $2.8 billion. To pile on more bad news, RIM announced that its BlackBerry 10 smartphones will be delayed until 2013’s first quarter and it will cut 5,000 jobs by the end of next year from restructuring.
Also announcing disappointing earnings was Nike (NYSE:NKE); its shares got hit in premarket trading after the company missed its earnings per share number. It was down 12.3 percent with earnings per share at $1.17. Revenue climbed in-line to 12 percent to $6.5 billion. The company blamed the earnings miss on increased spending spending and material costs. Citigroup cut its price target for Nike to $98 from $123 but believes the company still has a high growth story.
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