BlackBerry abandons bid to sell itself, CEO out
BlackBerry abandoned its bid to sell itself on Monday, and announced it will replace its chief executive.
Fairfax Financial, BlackBerry’s largest shareholder with a 10 per cent stake, said it won’t buy the struggling smartphone company and take it private but said that Fairfax and other investors will inject $1 billion as part of a revised investment proposal.
BlackBerry said CEO Thorsten Heins is stepping down. Heins took over in early 2012 after the company lost billions in market value, but he failed to turn the company around with BlackBerry’s new devices this year. Former Sybase chief executive John Chen has been appointed chair of BlackBerry’s board of directors and will serve as interim CEO.
Challenges abound for Twitter heading into IPO
Twitter has built a digital town square that’s teeming with activity but riddled with financial potholes. Seven years after co-founder Jack Dorsey sent the first tweet through the online messaging service, more than 500 million posts are shared each day by everyone from the Dalai Lama to Justin Bieber.
But all the chirping hasn’t translated to profits — nor is it expected to any time soon.
As Twitter prepares to complete its initial public offering of stock this week, the San Francisco company’s history of losses totalling nearly $500 million is raising questions about its ability to turn a cultural phenomenon into a sustainable business.
US govt: Hedge fund giant SAC Capital to pay $1.8B
SAC Capital Advisors will plead guilty to criminal fraud charges, stop investing money for others and pay $1.8 billion — the largest financial penalty in history for insider trading — to resolve criminal and civil claims against the hedge fund giant, the government announced Monday.
The government said in a letter to judges presiding over Manhattan cases that the “proposed global resolution” of the criminal and civil cases against SAC Capital Advisors and related companies also includes an agreement that SAC will cease operating as an investment adviser and will not accept any additional funds from third-party investors.
The company will pay a $900 million fine and forfeit another $900 million to the federal government, though $616 million that SAC companies have already agreed to pay to settle parallel actions by the U.S. Securities and Exchange Commission will be deducted from the $1.8 billion.
J&J to pay $2.2B to settle marketing allegations
WASHINGTON — Johnson & Johnson has agreed to pay over $2.2 billion to resolve criminal and civil allegations that the company promoted powerful psychiatric drugs for unapproved uses in children, seniors and disabled patients, the Department of Justice announced on Monday.
The agreement is the third-largest settlement with a drugmaker in U.S. history, and the latest in a string of actions against drug companies allegedly putting profits ahead of patients.
Justice Department officials alleged that J&J used illegal marketing tactics and kickbacks to persuade physicians and pharmacists to prescribe Risperdal and Invega, both antipsychotic drugs, and Natrecor, which is used to treat heart failure.
Tri Pointe Homes to combine with Weyerhaeuser unit
IRVINE, Calif. — Tri Pointe Homes Inc. is combining with Weyerhaeuser Co.’s homebuilding business in a deal valued at about $2.7 billion, looking to become a bigger player in the sector as the housing market continues its recovery.
Tri Pointe said Monday that the transaction will make it one of the 10 biggest U.S. homebuilders based on estimated combined equity market value.
Until now, Tri Pointe’s primary focus has been on midrange to upscale single-family homes in major metropolitan areas in southern and northern California. It recently added the Colorado market to its portfolio, but the deal with Weyerhaeuser expands its reach even further.
Kellogg to cut jobs as cereal sales slide
NEW YORK — Kellogg is planning to cut its global workforce by 7 per cent as the maker of Frosted Flakes, Rice Krispies and Special K struggles to convince Americans to eat more cereal.
According to FactSet, Kellogg has 31,000 employees, suggesting the company plans to cut about 2,170 jobs
The company, which also makes Pop Tarts and Eggo waffles, also said Monday it expects earnings per share for the year to be toward the lower end of its previous projection as a result of weaker-than-expected sales.
Zurich says no ‘undue pressure’ in CFO’s suicide
GENEVA — Two independent probes directed by Swiss regulators found no indication that Zurich Insurance Group’s former chief financial officer was subject to undue pressure before he killed himself, the company said Monday.
The statement by Switzerland’s biggest insurer also said no financial misreporting was uncovered in connection with the probes directed by the Swiss Financial Market Supervisory Authority (FINMA). But the company’s board chairman acknowledged he still has no explanation why CFO Pierre Wauthier, a well-respected 17-year veteran at Zurich, was found dead on Aug. 26 at his lakeside home in Walchwil, Switzerland, in what police said was an apparent suicide.
Microsoft enters 20-year deal for Texas wind power
HOUSTON — It takes a lot of energy to store all the data 1 billion people and 20 million businesses plug into their computers, phones, tablets and gadgets. So as part of an effort to become carbon neutral, Microsoft Corp. has entered a 20-year deal to buy power from a new wind farm in Texas, the first time the tech giant is directly purchasing electricity from a specific source.
The deal announced Monday between Microsoft and RES Americas is being funded in part by money collected from a “carbon fee,” an internal tax of sorts that the company has been charging its departments for every ton of carbon produced.
Microsoft also hopes the deal will be a model for other parts of its global operations, said Brian Janous, the company’s director of energy strategy.
By The Associated Press=
The Dow Jones Industrial average rose 24 points, or 0.2 per cent, to close at 15,639 Monday. The Standard & Poor’s 500 rose six points, or 0.4 per cent, to 1,768. The Nasdaq composite rose 15 points, or 0.4 per cent, to 3,937.
Benchmark U.S. crude for December delivery rose 1 cent to close at $94.62 on the New York Mercantile Exchange. Wholesale gasoline lost 2 cents to $2.53 a gallon. Heating oil dropped 1 cent to $2.87 a gallon. Natural gas shed 7 cents to $3.45 per 1,000 cubic feet.
Brent crude, a benchmark for international crude also used by U.S. refineries, was down 50 cents at $105.41 on the ICE futures exchange in London.