Latest from Bloomberg Law.
Big changes may be in store for Google. The tech giant was given an ultimatum by FTC Chairman Jonathan Leibowitz to settle its pending antitrust probe in the coming days or face a lawsuit, sources tell Bloomberg News. The agency has been investigating Google for almost two years for favoring its own services in search results, providing exclusive search services to online publishers and a whole host of other issues. If it chooses to file a complaint, the FTC can do so in either its own administrative court or the Federal court system.
Next, voters in Colorado and Washington legalized marijuana for recreational use last week, but the federal government still bans the drug. So what to do? State AGs from Washington and Colorado are meeting with US Attorney General Eric Holder’s office to see if the federal government plans to sue to block the measures. Does the federal law trump the state pot measures? We wouldn’t be surprised to see the issue eventually end up in court.
Finally, more big firms are feeling the urge to merge. On Wednesday, the UK’s Norton Rose announced it is merging with U.S. firm Fulbright & Jaworski, creating a 3,800-attorney firm with 55 offices worldwide. It’s not the first time Fulbright has considered a merger. Earlier this year, it was reportedly in talks with Pillsbury Winthrop. And it’s the second major cross-border merger announced in as many weeks. Last week, SNR Denton announced a three-way merger with Canadian and European firms, creating a 2,500-lawyer conglomeration.
Full video below.
In this complex world, investors still focus on one subject only. Last week was JPM, this week is all about Facebook. Let’s not forget about Spain, Greece and others with all this Facebook frenzy. FB will be a great trading stock, but value investors should go somwhere else. Guest post by Azizonomics.
What is there to say about Facebook?
Why would anyone buy a company’s stock when they have no real profit pedigree? When their advertising profit in 2011 came to just over $1 billion, and their book value is the region of $100 billion, how can that really make any sense other than to the kind of nutcase zombie trader who takes Jim Cramer seriously? The sad truth is that people are just not clicking the ads; Facebook ads receive far fewer clicks than competitors such as Google’s AdSense.
If Facebook was floating with a book value of $5-10 billion (or around $2-4 per share) we would be talking about a serious business proposition, albeit one which is already rather saturated (given that there are 2.3 billion internet users, and Facebook already has its claws into 900 million of them). But at these levels? What are people paying for?
Some say the name recognition and momentum (but that’s just paying for hype) as well as the infrastructure and data that Facebook owns. Certainly five or six years of a big chunk of humanity’s likes and dislikes is a valuable database. But how do they monetise that? Does Zuckerberg have any credible plan?
Before you consider going all in long over the weekend, check out some charts below. After the Markets rallied hard over the past week, many shorts have been covering in this brutal squeeze. We know of many smart investors absolutely crushed this week. Some hedge funds have had a real nightmare, after the fundamental positions have been squeezed out totally.
The whole market has actually not done anything in two months, but building a consolidation pattern, with volatile swings. We are currently trading in no trend market, but the squeeze should start diminshing. Maybe putting on some shorts for the weekend….?
SPX hitting resistance levels.
You can’t get only good news after the close. Google beating estimates and stock surging, but Fitch just downgraded several of the biggest Investment Banks.
Fitch Reviewing Global Trading and Universal Banks; Places Seven on Rating Watch Negative
In conjunction with a broad assessment of the ratings for the largest banking institutions in the world, Fitch Ratings is conducting a review of the global trading and universal banks in its rating portfolio. As part of that review, Fitch has placed the Viability Ratings (VRs) of seven and the long-term Issuer Default Ratings (IDRs) of six global trading and universal banks on Rating Watch Negative. At the same time, Fitch has placed the short-term IDRs of four of the banks on Rating Watch Negative.