The stock has been halted for over an hour
Comments »Panasonic Forecasts the Largest Loss in Over Ten Years
TDK Corp. To Shed LED Unit and Pink Slip 11k Jobs Worldwide
Quantas Airlines Grounds Entire Fleet Over Labor Dispute
Australia’s Qantas Airways grounded its entire fleet on Saturday over a bitter labor dispute, prompting the government to ask a tribunal to stop the conflict out of concern it is putting both the airline and the economy at risk.
Tens of thousands of passengers were affected by the unprecedented decision, which came a day after the airline’s annual shareholders’ meeting and clearly took the government by surprise.
It came as an embarrassment for Prime Minister Julia Gillard who was hosting a Commonwealth leaders’ summit in the remote western city of Perth, 17 of them booked to fly out on Sunday with Qantas.
Unions, from pilots to caterers, have taken strike action since September over pay and to oppose Qantas plans to cut its soaring costs, as it looks at setting up two new airlines in Asia and cutting back financially draining long-haul flights.
It plans to cut 1,000 jobs and order $9 billion of new Airbus aircraft as part of a make over to salvage the loss making international business.
“They are trashing our strategy and our brand. They are deliberately destabilizing the company. Customers are now fleeing from us,” Qantas Chief Executive Alan Joyce said.
The unions “are sticking by impossible claims that are not just to do with pay, but also to do with unions trying to dictate how we run our business,” said Joyce, who estimated the latest move would cost the airline A$20 million a day.
The dispute is the worst Qantas has faced since 2008, when industrial action by engineers cost it A$130 million ($133 million), local media reported.
Qantas’ action sparked an angry response from Australia’s Transport Minister Anthony Albanese.
“I’m extremely disappointed. What’s more, I indicated very clearly to Mr Joyce that I was disturbed by the fact that we’ve had a number of discussions and at no stage has Mr Joyce indicated to me that this was an action under consideration,” he said.
The government asked for a special labor tribunal hearing to end the industrial action by both unions and Qantas. A late night hearing was adjourned until later on Sunday.
If it orders an end to the industrial action Qantas is expected to start flying again.
“The Qantas dispute escalated today and I am concerned about that for the national economy … it could have implications for our national economy,” Gillard told reporters.
Executives faced angry shareholders and workers at a shareholders’ meeting on Friday where the company said the labor dispute had caused a dive in forward bookings. The shareholders backed hefty pay rises to senior Qantas executives. [ID:nL3E7LR4B5]
Australian aviation analyst Tom Ballantyne told ABC Television Qantas’ decision to ground the fleet was partially designed to get the government involved.
“The airline will be irretrievably damaged if it goes on for more than a month,” he said.
Qantas said it would lock out all employees from Monday night in the dispute which has affected 70,000 passengers and 600 flights on one of the country’s biggest travel weekends. Qantas’ budget airline Jetstar is not affected.
STRANDED
Qantas is a member of the OneWorld airline alliance, which includes Cathay Pacific, American Airlines, British Airways Plc, Finnair, Iberia, Japan Airlines, LAN, Malev, Mexicana, Royal Jordanian and S7 Air.
Alliance members often use partners’ routes and flights to shore up their own networks. Cathay warned its own passengers of potential disruptions on Qantas connections, and said they were monitoring the situation and would provide updates.
The airline’s decision left many flyers venting their anger.
“To resolve this at the expense of paying customers on one of the biggest flying days in Australiais quite frankly… bizarre, unwarranted and unfair to the loyal customers that Australia has,” a businessman, who only gave his name as Barry, told Sky TV at Melbourne airport after he was stranded.
Qantas’ Facebook page was inundated with angry passengers. “Stranded in Sydney Airport…because QANTAS are useless idiots,” wrote Lyn Haddon.
Zoe Johnson, an Australian living in Switzerland, said: “I’m proudly Australian but it just leaves a really bad taste in your mouth. So many people say, ‘I’m never going to fly Qantas again,’ and from my point of view its just feels like a kind of bullying tactic really.”
At London’s Heathrow Airport, passengers stood in long queues looking up at departure boards showing canceled flights.
“(I’m) not very happy because it was the holiday of a lifetime for us and it cost us a lot of money,” British passenger Steve Johnson said.
Adding to travelers’ problems, Air France has canceled about one in five flights and warned of wider disruption as a five-day strike by flight attendants over employment terms began on Saturday.
Qantas’ decision to halt flights comes during one of Australia’s busiest travel weekends, with tens of thousands traveling to the hugely popular Melbourne Cup horse race on Tuesday, dubbed “the race that stops the nation.”
Many passengers were stranded on aircraft waiting to take off on Saturday when the grounding announcement was made.
“Alan Joyce is holding a knife to the nation’s throat,” said Captain Richard Woodward, vice-president of the Australian and International Pilots Association.
An extended grounding could benefit domestic rival Virgin Australia and others such as Singapore Airlines, British Airways and Chinese carriers on international routes.
Virgin Australia said it would accommodate Qantas passengers where possible and was looking at adding more services in response to Qantas grounding its fleet over labor dispute.
Comments »Groupon Considering Raising IPO Price Range Due to High Demand
Groupon Inc. may increase the price range of its initial public offering amid higher-than-expected demand for the shares from investors, three people with knowledge of the matter said.
An updated filing with a higher range may be filed with the U.S. Securities and Exchange Commission early next week should Groupon decide to increase the price, said one of the people, who declined to be identified because the information is private.
Groupon is floating a record-low percentage of its total outstanding shares in the offering, helping to stoke demand for the stock. Only 4.7 percent of the unprofitable company’s shares will be sold to the public, less than in any U.S. Internet- company IPO of more $200 million since at least 2000, according to Bloomberg data. The company is pitching the IPO to investors and aims to complete the offering on Nov. 3, the data show.
“I’m sure that it’s going to be fully subscribed,” said Brett Harriss, an analyst at Gabelli & Co. in Rye, New York, who was one of about 400 people attending the Groupon investor conference in New York City yesterday. “It’s a thin stock to start and, despite the recent criticism, they tell a good story.”
Groupon is seeking to raise as much as $540 million selling 30 million shares for $16 to $18 apiece, according to an Oct. 21 regulatory filing. Julie Mossler, a spokeswoman for Chicago- based Groupon, declined to comment on the stock offering.
In a typical IPO, investors receive shares worth 20 percent to 25 percent of the company, according to Paul Deninger, a senior managing director at investment bank Evercore Partners Inc. in San Francisco who isn’t involved in the Groupon sale.
Amazon, Microsoft
A rising stock market can encourage companies to expand their offerings. The Standard & Poor’s 500 Index rallied 17 percent from Oct. 3 through Oct. 27, when volatility hit a two- month low.
By selling at a higher price, Groupon would become even more expensive than Amazon.com Inc. (AMZN) and Microsoft Corp. The current price range values the company at about five times projected 2012 sales, people familiar with the matter said last week. That compares with 2.9 for Microsoft and 1.5 for Amazon.com, according to data compiled by Bloomberg.
Groupon reported a net loss of $10.6 million attributable to the company in the three months through September, bringing losses in the first nine months of the year to $214.5 million, according to its filings.
LaShou Group Inc., the Chinese operator of a daily-deal website, filed yesterday to raise $100 million in a U.S. initial public offering. The Beijing-based company will offer American depositary receipts that will trade on the Nasdaq Stock Market under the symbol LASO.
Comments »Goldman Gets Sued for $1.07 Billion Over Timberwolf Fund
An Australian fund went insolvent after buying into bad debt sold through GS in their Timberwolf Fund of fun.
Comments »Cablevision Misses Street Estimates
Chevron Doubles Revenues, But Profits Fall
FLASH: JOHN CORZINE SUCKS BECAUSE HE DESTROYED MF GLOBAL
When he became CEO of MF, he started buying sovereign debt.
FAIL.
The stock is now less than $1.
Comments »Upgrades and Downgrades This Morning
Upgrades
IT – Gartner initiated with a Outperform at Northland Securities
OXY – Occidental Petro upgraded to Outperform from Neutral at Credit Suisse
TWC – Time Warner Cable downgraded to Market Perform from Outperform at Wells Fargo
FORR – Forrester Research initiated with a Market Perform at Northland Securities
PEP – PepsiCo initiated with a Buy at Deutsche Bank
KO – Coca-Cola initiated with a Buy at Deutsche Bank
HOS – Hornbeck Offshore upgraded to Buy from Neutral at Pritchard
WFM – Whole Foods upgraded to Neutral from Underperform at Credit Suisse
SPLS – Staples initiated with an Overweight at Morgan Stanley
BCS – Barclays PLC upgraded to Overweight from Neutral at JPMorgan
FOSL – Fossil initiated with a Buy at BofA/Merrill
AMD – Advanced Micro upgraded to Outperform from Market Perform at Wells Fargo
LLY – Eli Lilly upgraded to Outperform from Market Perform at First Global
SPB – Spectrum Brands initiated with an Outperform at Credit Suisse
S – Sprint Nextel upgraded to Outperform from Neutral at Macquarie
M – Macy’s initiated with a Buy at Nomura
PC – Panasonic upgraded to Outperform from Neutral at Credit Suisse
Downgrades
ED – Con Edison downgraded to Underperform from Sector Perform at RBC Capital
HS – Healthspring downgraded to Neutral from Positive at Susquehanna
NFLX – Netflix target lowered to $100 at Oppenheimer
DPS – Dr Pepper Snapple initiated with a Hold at Deutsche Bank
VMED – Virgin Media removed from Pan Europe Conviction Buy List at Goldman
HPY – Heartland Payment Systems downgraded to Neutral from Buy at Suntrust
NUVA – NuVasive downgraded to Market Perform from Outperform at William Blair
NCI – Navigant Consult downgraded to Neutral from Buy at Suntrust
LAMR – Lamar Advertising downgraded to Neutral from Overweight at JP Morgan
BBD – Banco Bradesco ADS downgraded to Neutral from Overweight at HSBC
AIXG – Aixtron downgraded to Neutral from Buy at Sterne Agee
CMS – CMS Energy downgraded to Neutral from Buy at Suntrust
ARBA – Ariba downgraded to Hold from Buy at Craig Hallum
BMY – Bristol-Myers downgraded to Underperform from Outperform at Credit Suisse
ORI – Old Republic downgraded to Underperform from Mkt Perform at Raymond James
PCS – MetroPCS downgraded to Underperform from Buy at BofA/Merrill
SPG – Simon Properties downgraded to Neutral from Buy at UBS
MDR – McDermott downgraded to Market Perform from Outperform at William Blair
SCHN – Schnitzer Steel downgraded to Neutral from Buy at BofA/Merrill
VLY – Valley National downgraded to Hold at Stifel Nicolaus
IRBT – IRobot downgraded to Neutral from Overweight at JP Morgan
KIM – Kimco Realty downgraded to Outperform from Strong Buy at Raymond James
NATL – National Interstate downgraded to Underperform from Mkt Perform at Raymond James
PLL – Pall downgraded to Neutral from Overweight at JP Morgan
CWEI – Clayton Williams downgraded to Mkt Perform from Outperform at Raymond James
FCBC – First Comm Banc downgraded to Hold at Stifel Nicolaus
CVE – Cenovus Energy downgraded to Neutral from Buy at UBS
IRM – Iron Mountain downgraded to Hold at Stifel Nicolaus
Comments »Gapping up and Down This Morning
Gaping up
QTM +4.3%, SOHU +4.2%, SLV +4.2%, SINA +4.1%, YOKU +3.9%, QIHU +3.7%, LVS +3.5%, DANG +2.8%,
WY +2.6%, EXEL +2.4%, ELGX +2.3%, VRSN +2.2%, CERN +1.9%, BAC +1.3%, X +1.3%, VRTX +1.3%,
ALGN +13.4%, CLF +8.4%, HLIT +7.5%, BIDU +6.7%, TORM +6%, AMD +4.7%, STMP +4.5%, DECK +4.4%,
Gapping down
TSYS -5.6%, INPH -5.4%, EXPE -5.1%, AMKR -4.7%, ARBA -4.4%, ERTS -4.1%, VMED -3.7%, SONS -3.4%,
NANO -14.9%, CSTR -11.2%, QLIK -9.9%, MF -9.1%, IPCM -8.7%, LEG -5.8%, DRIV -5.7%, PWER -5.7%,
ING -3.3%, VAR -2.6%, INSP -2.4%, MT -2.1%, TOT -2%, NTGR -1.9%, YHOO -1.6%, BP -1.5%, UBS -1.4%,
BHP -1.3%, RIO -0.9%,
Comments »In Play and on the Wires
Whirlpool to Cut 5k Jobs
Big Banks Fail to Join BofA in Card Fees
Merck & Co. Beat Both on the Top and Bottom Line
MF Global Taps Credit Lines
With asset impairment happening daily the company had to draw on credit lines to keep operations moving along.
Comments »ASSHAT OF THE DAY: Coinstar RAISES Prices!
I guess they didn’t see what happened to NFLX over the past two months. Seriously, are they fucking retarded? They raised prices 20%, from $1.00 to $1.20.
The stock is down 12% in after hours.
Comments »
