Citigroup Ponders Reverse Stock Split; Goldman-led Group Makes Offer to USJ; GE Capital Finance Expects 2009 Profit; India Inflation at Two-Decade Low; Leading Indicators Drop; U.S. Throws Auto Parts Makers $5 Billion Lifeline; Microsoft Still Wants Yahoo; Cisco Buys Flip Video Maker
Citigroup Inc. (C) floated the idea of a reverse stock split – ranging from 1-for-2 and 1-for-30, Reuters reported. Reverse splits are often used to pump up low share prices by reducing the number of outstanding shares. The split could take pace before June 30, 2010, Citigroup said.
A group of investors led by Goldman Sachs Group Inc. (GSC) offered 111.2 billion yen ($1.2 billion) to take over Japan’s USJ Co., which operates Universal Studios theme park in Japan, Bloomberg reported. The group’s offer is more than 23% of the stock’s Wednesday closing price in Tokyo. It would also increase Goldman’s stake in USJ to 61.2%.
General Electric Co. (GE) said it expects its GE Capital finance unit to turn a profit in 2009, Reuters reported. The company also said that in the worst-case scenario, it still wouldn’t need to raise capital, Reuters reported.
Investors are expecting India’s central bank to cut interest rates, as the emerging market’s inflation has slowed to at least a two-decade low. Wholesale prices rose 0.44% in the week to March 7 after gaining 2.43% the previous week. “Inflation will turn negative starting from April and will remain so until the end of 2009,” Tushar Poddar, an economist with Goldman Sachs Inc. in Mumbai, told Bloomberg. “We expect the Reserve Bank to ease liquidity” to support growth.
The Conference Board’s index of leading indicators fell 0.4 percent in February, less than forecast, Bloomberg reported. The widely watched gauge of the economy’s direction over the next three to six months was forecast to drop 0.6 percent, according to projections of 60 economists in a Bloomberg News survey. Four of the 10 indicators in the report subtracted from the index, led by a jump in weekly jobless claims.
The Obama administration pledged up to $5 billion yesterday (Thursday) in U.S. Treasury aid to auto supply parts makers to avoid a collapse that would cripple the domestic industry, including federally funded General Motors Corp. (GM) and Chrysler LLC. The program is designed to maintain a reliable network of parts to auto companies and ensure that suppliers get paid. Suppliers will get a guarantee that money owed them for products will be paid, regardless of what happens to car companies, Reuters reported.
Microsoft Corp. (MSFT) chief executive Steve Ballmer raised the possibility of renewed merger talks with Yahoo Inc.(YHOO) yesterday (Thursday) and said he is holding out hopes for further talks, Reuters reported. "Unless I'm fooling myself, over time I would expect a there's a good opportunity for a deal," Ballmer said in response to a question from the moderator about the likelihood of such a partnership, at the McGraw-Hill (MHP) Media Summit in New York.
Cisco Systems Inc. (CSCO), the world's largest maker of communications networking equipment will pay $590 million in stock to purchase all of privately held Pure Digital's TechnologiesReuters reported. Pure Digital, whose pocket-sized Flip Video camcorders let people quickly make and share videos on the Web, has sold more than 2 million units in the United States so far, Cisco said. The deal comes as Cisco seeks to expand in the consumer market amid a slowdown in its traditional routers and switches business.