With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
"New" GM to Begin Bailout Repayment; Dollar Drops to 15-Month Low, Gold Continues Record Highs; SEC to Investigate Trading Prior to 3Com/HP Deal; Sprint Pays Down Loan, Stock is Upgraded; Canon to Buy Europe's Largest Printer Maker; Hitachi to Raise $4.6 Billion in Stock and Bond Sale; Cisco Ups Bid for Video Conference Equipment Maker; Millions of U.S. Taxpayers May Unexpectedly Owe, Treasury Says
- General Motors Co. yesterday (Monday) said it lost $1.2 billion in a bankruptcy-shortened third quarter, but vowed a quick repayment of $8 billion owed to the United States and Canada. Revenue at the "new" GM fell 26% to $28 billion. The company, of which the U.S. government has a 61% stake, has eliminated $78 billion of debt and built its cash reserves to almost $43 billion. GM plans to begin repaying the U.S. and Canadian governments next month, starting with a $1.2 billion payment, followed by quarterly payments.
- The U.S. dollar fell to a 15-month low against a basket of currencies as investors questioned U.S. Federal Reserve Chairman Ben Bernanke's ability to return it to strength. The dollar declined to an intraday high of $1.48 against the euro as Bernanke said in a speech in New York that the Fed is "attentive" to fluctuations in the value of the greenback and "will help to ensure the dollar is strong." Meanwhile, the falling dollar grew investors' appetite for hard assets, which resulted in the price of gold once again rising to a record $1,140 an ounce on the New York Mercantile Exchange (NYMEX).
- The U.S. Securities and Exchange Commission (SEC) will look into a flurry of 3Com Corp. (Nasdaq: COMS) option buying hours before the announcement that Hewlett-Packard Co. (NYSE: HPQ) would buy the company, Bloomberg News reported, citing a person familiar with the matter. Call trading on 3Com hit a 26-month high approximately four hours before H-P made the buyout announcement. "It screams insider trading to the SEC," Peter Henning, a law professor at Wayne State University in Detroit and former SEC attorney told Bloomberg.
- Sprint Nextel Corp. (NYSE: S) said yesterday (Monday) it has paid $1 billion of its $4.5 billion revolving credit facility, eliminating its outstanding balance on the loan. The company had $5.9 billion in cash and equivalents and $1.6 billion in borrowing capacity under the current facility for a total liquidity of $7.5 billion, it said. Shares in the wireless carrier were up 12.90%, closing at $3.50 after Credit Suisse Group AG (NYSE ADR: CS) upgraded the stock from "Neutral" to "Outperform" while at the same time adding it to its Focus List. Credit Suisse also upped Sprint's target share price from $4 to $6.
- Canon Inc. (NYSE ADR: CAJ) will make a tender offer of $1.1 billion (730 million euros) in cash for Oce NV (OTC ADR: OCENY), Europe's largest printer manufacturer, the two companies said yesterday (Monday). Canon will pay $12.87 (8.6 euros) per Oce share, a premium of 70% to Oce's stock price at the closing bell on Friday. Oce shares skyrocketed 62.16%, closing at $12.00 yesterday.
- Japanese electronics giant Hitachi Ltd. (NYSE ADR: HIT) said it will raise up to $4.6 billion through the sale of stock and bonds, sending its shares downward. The sale will be made up of $1.1 billion in convertible bonds and the rest stock, the company said yesterday (Monday). "Hitachi still needs to push forward the reorganization of its businesses," Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo told Bloomberg News. Companies that need to boost capital "seem to be rushing to the market that's shown a recovery," he said. Hitachi stock closed at $30.45, down 6.71%.
- Cisco Systems Inc. (Nasdaq: CSCO) raised its cash bid for Norwegian video-conference-equipment makers Tandberg ASA (PINK: TBGTF) by 11% to $3.41 billion (19 billion Norwegian kroner), saying the new bid was its final one. Tandberg's board unanimously recommended the revised bid, Chairman Jan Opsahl said. Cisco has pushed into 30 new business areas, which it says could produce $1 billion a year in revenue.
- More than 15 million U.S. taxpayers could unexpectedly owe when they file their returns because the government was too generous with its Making Work Pay tax credit, a Treasury Department report said. Taxpayers will be at risk if they have more than one job, are married and both spouses work, or receive Social Security benefits while also earning taxable wages. The credit, part of U.S. President Barack Obama's $787 stimulus package, was supposed to give individuals up to $400 and couples up to $800.