Charles Schwab buying TD Ameritrade for $26B in all-stock deal - Fox Business

Charles Schwab Corp. confirmed the acquisition of TD Ameritrade as an all-stock deal for $26 billion.

Charles Schwab is acquiring TD Ameritrade in an all-stock transaction valued at $26 billion, the company announced Monday. TD Ameritrade shares were higher on the news.

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Ticker	Security	Last	Change	Change %
AMTD	TD AMERITRADE HOLDING	48.13	-0.25	-0.52%
SCHW	CHARLES SCHWAB	48.20	+0.17	+0.35%

Schwab will pay approximately 1.0837 Schwab shares for each TD Ameritrade share. The deal represents a 17 percent premium to Ameritrade's 30-day volume weighted average price. TD Shareholders will own about 13 percent of the combined company once the deal is complete.

The deal, which was first reported by FOX Business' Maria Bartiromo on Thursday, will create a financial-services behemoth with $5 trillion in assets under management, allowing Schwab to better compete with the likes of BlackRock. The firms generate a combined $17 billion of annual revenue and $8 billion of annual pre-tax profit.

The deal is expected to be 10 percent to 15 percent accretive to earnings and 15 percent to 20 percent accretive to operating cash earnings per share in year three.

"With this transaction, we will capitalize on the unique opportunity to build a firm with the soul of a challenger and the resources of a large financial services institution that will be uniquely positioned to serve the investment, trading and wealth management needs of investors across every phase of their financial journeys,” Charles Schwab President and CEO Walt Bettinger said in a statement.

LOUIS VUITTON PARENT TO BUY LEGENDARY AMERICAN LUXURY BRAND

TD Ameritrade Chief Financial Officer Stephen Boyle will act as the interim president and CEO, helping the company with its fiscal year 2020 plan and integration with Schwab. Boyle will assume leadership effective immediately.

Following the close of the deal, TD Bank will have the opportunity to name two board members and TD Ameritrade will name a director.

The combined company's headquarters will be located in Westlake, Texas.

Outgoing TD Ameritrade CEO Tim Hockey previously acknowledged his firm's decision to adopt zero commissions -- as Schwab and rivals E-Trade and Fidelity have done -- would prompt speculation about mergers.

"We will take a look at anything that makes financial and strategic sense," he said last month, outlining the company's plans to make up for lost revenue of as much as $240 million a quarter from the new commission structure. "Scale is important. We have scale. We're very comfortable with our earnings power now, even in this new environment."

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Schwab said in October that eliminating its $4.95-per-trade commission would trim quarterly revenue by $90 million to $100 million, or about 3 percent to 4 percent of the total.

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2019-11-25 11:06:53Z
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Charles Schwab to buy TD Ameritrade in a $26 billion all-stock deal - CNBC

Charles Schwab on Monday announced plans to buy discount brokerage rival TD Ameritrade in an all-stock deal valued at $26 billion.

As part of the agreement, Ameritrade stockholders will receive 1.0837 Schwab shares for every share held. The deal is expected to close in the second half of 2020.

Shares of TD Ameritrade ticked 1% lower to $47.82 in premarket trading, while Schwab shares fell 2.7% to $46.90.

The merging of the two biggest publicly traded discount brokers will create a mammoth with more than $5 trillion in client assets, $3.8 trillion from Schwab and $1.3 trillion from TD Ameritrade. The combined company will serve more than 24 million clients. 

"We believe the combination of our two great companies positions us to be competing and winning in the investment services business for the long run—the very long run," said Charles Schwab president and CEO Walter Bettinger. 

The integration of the two firms is expected to take between 18 and 36 months after the deal is closed. The combined company's headquarters will relocate to Schwab's new campus in Westlake, Texas.

The deal will create "a Goliath in Wealth Management," Wells Fargo senior analyst Mike Mayo said in a note to clients on Thursday, when talks of the merger were by CNBC's Becky Quick.

More consolidation in the brokerage industry is expected given the massive amount of disruption that has taken place, with all the major brokers dropping commission fees for trading in recent months. Schwab was the first of the major players to make the move, eliminating commissions in . Schwab's competitors, including Fidelity and TD Ameritrade, were quick to follow.

Andrew Burton | Bloomberg | Getty Images

After dropping commissions, Schwab and TD Ameritrade's stocks were under pressure as investors worried that the lost commission revenue would pressure margins; however, Schwab proved its free trading is paying off in terms of new client accounts. Schwab has a market value of $57.5 billion and TD Ameritrade has a $22.4 billion market cap.

The advantage to the Schwab-TD Ameritrade deal is the brokerage giant will be able to cut costs, stream new revenue opportunities and improve the platform for clients, said JMP Securities analyst Devin Ryan. Given the high amount of overlapping back-office operations and vendor costs, Stephen Biggar, Argus Research Director of Financial Institutions Research, expects to see about 60% of TD Ameritrade's costs removed following the sale.

TD Ameritrade CEO Tim Hockey previously announced he would step down in February 2020. The companies said on Monday they will suspend the CEO search and named TD Ameritrade Chief Financial Officer Stephen Boyle as TD Ameritrade's interim president and CEO.

This particular deal came as a shock to analysts on Wall Street, who pegged E-Trade as the most likely acquisition target among the smaller brokers. Shares of E-Trade ticked about 1% lower in premarket trading. 

The deal will likely pressure smaller brokers like Interactive Brokers, as well as Silicon Valley start-up Robinhood who kick-started free stock trading in 2013.

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2019-11-25 11:04:00Z
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Musk suggests Tesla has 200,000 pre-orders for controversial Cybertruck - Fox Business

FOX Business’ Kristina Partsinevelos reports on Tesla’s rollout of their new pickup truck and the issues at the unveiling.

(Reuters) - Tesla Inc Chief Executive Officer Elon Musk indicated in a tweet on Sunday that the electric carmaker received 200,000 orders for its electric pickup truck within three days of its launch.

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Musk, who has been regularly tweeting about the Cybertruck's features since its launch late Thursday, has also been updating his followers with the number of orders the company has received.

ELON MUSK DEFAMATION SUIT PRETRIAL HEARING STARTS MONDAY

In an earlier tweet, Musk said the company had received 146,000 orders for Cybertruck, and tweeted again on Sunday saying "200K" - an apparent reference to the number of orders.

The company's website shows that an immediate payment of $100 is required to reserve an order for the Cybertruck, which has a starting price of $39,900.

The launch of its futuristic pickup on Thursday suffered a setback when the electric vehicle's "armored glass" windows shattered in a much-anticipated unveiling. The overall look of the electric vehicle had worried Wall Street on Friday, driving the automaker's shares to close 6.1% lower.

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During the launch, Musk had taken aim at the design, power and durability of mainstream trucks, only to be shaken when his boast about his new vehicle's windows backfired.

Separately, Musk said the Cybertruck is Tesla's last product unveil for a while.

Tesla plans to start manufacturing the Cybertruck around late-2021.

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2019-11-25 10:53:48Z
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Uber stripped of its London license in huge blow to the ride-hailing giant - CNBC

Uber's logo displayed on a smartphone by a taxi rank in London, U.K., on Dec. 22, 2017.

Chris J. Ratcliffe | Bloomberg via Getty Images

Uber has been stripped of its license to operate in London, as the local transport regulator said it was "not fit and proper."

Transport for London said Monday that it would not renew the San Francisco-based ride-hailing giant operator's license, citing a "pattern of failures" that had "placed passenger safety and security at risk."

TfL had first suspended Uber's license back in 2017, flagging concerns with the company's approach to safety. Following that initial move, Uber had twice been granted a temporary license to continue operating in the city — the first, a 15-month reprieve issued by a judge last year, and the second, a two-month permit granted by TfL in September.

"Uber has made a number of positive changes and improvements to its culture, leadership and systems in the period since the Chief Magistrate granted it a licence in June 2018," TfL said in a statement Monday. "This includes interacting with TfL in a transparent and productive manner."

"However, TfL has identified a pattern of failures by the company including several breaches that placed passengers and their safety at risk," the regulator continued. "Despite addressing some of these issues, TfL does not have confidence that similar issues will not reoccur in the future, which has led it to conclude that the company is not fit and proper at this time."

Uber now has 21 days to appeal the decision and will be allowed to operate during that time. In response to TfL's move, the company said it intended to appeal.

"TfL's decision not to renew Uber's licence in London is extraordinary and wrong, and we will appeal," Jamie Heywood, Uber's regional general manager for Northern and Eastern Europe, said in a statement. "We have fundamentally changed our business over the last two years and are setting the standard on safety. TfL found us to be a fit and proper operator just two months ago, and we continue to go above and beyond."

"On behalf of the 3.5 million riders and 45,000 licensed drivers who depend on Uber in London, we will continue to operate as normal and will do everything we can to work with TfL to resolve this situation."

London is Uber's biggest European market and a key driver of its revenues beyond the U.S. It's faced increased competition in the U.K. capital from the likes of Estonian start-up Bolt and French rival Kapten.

In its announcement, London's transport authority said it held issue with a change made to Uber's systems that allowed unauthorized drivers to upload their photos to other Uber driver accounts. According to TfL, this allowed them to pick up riders as though they were the booked driver in at least 14,000 trips.

"This means all the journeys were uninsured and some passenger journeys took place with unlicensed drivers, one of which had previously had their licence revoked by TfL," the regulator said.

The watchdog also claimed that dismissed or suspended Uber drivers were able to create an account and carry passengers, and added "several insurance-related issues" led the regulator to prosecute the company earlier this year.

Ahead of Monday's announcement, Uber had made a number of safety updates to its app in an apparent attempt to allay regulatory concerns. One tool it added to its platform was a button that users could press to flag discrimination experienced on a trip, while another would send out push notifications in the event that GPS data indicates a car crash may have taken place.

'Hammer blow'

London Mayor Sadiq Khan issued a statement in support of TfL's decision: "Keeping Londoners safe is my absolute number-one priority, and TfL have identified a pattern of failure by Uber that has directly put passengers' safety at risk."

He added: "There is undoubtedly a place for innovative companies in London — in fact we are home to some of the best in the world. But it is essential that companies play by the rules to keep their customers safe."

But labor union IWGB slammed the move, calling it a "hammer blow" to Uber's drivers. "We are asking for an urgent meeting with the Mayor to discuss what mitigation plan can now be put in place to protect Uber drivers," said James Farrar, chair of the union's private hire drivers branch.

Nothing will change for passengers and drivers who the use the Uber app for the time being, as the company has made clear it intends to appeal the decision. But the ban nevertheless represents a huge blow to the ride-sharing firm, which has worked to improve its reputation as a friend rather than foe to regulators under current CEO Dara Khosrowshahi.

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2019-11-25 10:03:00Z
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Tesla Cybertruck Arrives With 500-Mile Range And $39900 Price Tag - CarBuzz

Aiding the handling claims is an adaptive air suspension system that can adjust ride height for use in various situations, providing as much as 16 inches of ground clearance when off-road, but hunker down for high-speed road use, and lower even further to aid loading. In its optimal off-road setting, there's a 35-degree approach angle and a 28-degree departure angle. To put that into perspective, a Jeep Gladiator Rubicon boasts figures of up to 43.4 degrees and 26 degrees respectively with a ground clearance of 11.1 inches.

With electric torque on tap, it'll be a capable tower too, as the manufacturer claims it can tow up to 14,000 lbs, 800 lbs more than a Ford F-150. The 6.5-foot bed can allegedly carry a 3,500-pound payload. Between the load bin, frunk, and sail pillars there's apparently 100 cubic feet of lockable storage. Inside the bed, there are power outlets and dedicated power tools, and there's an onboard air compressor, too, making it a proper work truck as well.

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November 23, 2019 at 10:37PM

'No excitement at all' as oilpatch interest wanes for drilling rights auctions - CBC.ca

A key indicator of future oil and gas drilling activity in Western Canada is sliding lower as the industry deals with a lack of pipeline capacity, Alberta oil production curtailments and difficulty accessing capital markets.

Sales of Crown drilling rights — needed to allow energy exploration on land where mineral rights are held by the province — have fallen off dramatically in B.C., Alberta and Saskatchewan this year.

"When drilling rights are going well, it tends to mean somebody has found either a good reservoir or a good way to produce a known reservoir and so you get a lot of excitement," said Richard Masson, an executive fellow with the School of Public Policy at the University of Calgary.

"This says to me, there's no excitement at all right now. People are doing little bits of infill land buying but there's nothing that looks like a very prospective play that would excite the industry and excite new capital to come in."

In Alberta, which produces about 80 per cent of Canada's oil and about 70 per cent of its natural gas, twice monthly auctions are on track for a record low with two sales left to go in 2019. Through 11 months, the province has raised $100 million by selling rights on 616,000 hectares.

The current low mark was set in 2016, when $137 million was paid for the rights to drill on 937,000 hectares, the lowest since the auction system was adopted in 1977.

The high was in 2011, when a bidding frenzy for lands for the Duvernay underground oil-bearing formation resulted in $3.5 billion spent to buy rights on 4.1 million hectares.

In British Columbia, land auctions have delivered $64 million so far this year, down from $173 million last year but ahead of $18 million and $15 million in 2015 and 2016, respectively. The record high year was 2008, when $2.66 billion was spent.

In Saskatchewan, sales of drilling rights have raised about $22 million in five auctions, down from $51 million in six auctions last year. The province's record year was also 2008, when it raised $1.1 billion.

Industry insiders say the declines are mainly due to the lack of new pipeline capacity to allow more oil and gas production, and the resulting loss of confidence by investors that has starved the sector of debt and equity funding. Production limits in Alberta imposed by the government to better align supply with pipeline capacity are another overhang on activity.

"The mood is very cautious. People are feeling very beat up," said Grant Fagerheim, CEO of Whitecap Resources Inc., in an interview.

At Whitecap, as with many other mid-sized Calgary producers, using scarce dollars to buy land for future drilling and then spending more on the exploration required to retain the lease is way down on the priority list, he said, below maintaining a dividend, reducing debt and buying back shares.

"Companies just don't have budget to acquire new lands. Nobody is exploring for new plays or new ideas, or very few people are," said Brad Hayes, a geologist and president of Petrel Robertson Consulting in Calgary.

Drilling rights auction prices fell sharply after global oil prices bottomed out in 2016, which convinced some bargain hunters to nominate land and make bids in hopes there would be a bounce back, he said. But conditions haven't improved.

The trend to lower interest in drilling rights auctions is welcomed by environmentalists like Keith Stewart of Greenpeace Canada, who said in an email it is a sign that the "era of ever-growing demand for oil" is over.

In B.C., much of the prime land has been snapped up by producers, leaving less to be nominated for auction, said a spokesman for the Ministry of Energy, Mines and Petroleum Resources who asked not to be identified. He said some land is not available for development because of government processes around caribou recovery and land and environment planning assessments in northeastern B.C.

The Canadian Association of Oilwell Drilling Contractors recently predicted just nine more wells will be drilled in Canada in 2020 compared with this year, taking the total number to 4,905, less than half the 11,226 wells drilled in 2014.

Meanwhile, the S&P/TSX Capped Energy Index, which tracks share values of major Canadian oil and gas producers, has fallen by about 15 per cent over the past year, reflecting investor distaste for the sector.

But Whitecap's Fagerheim says there's hope for the industry if Canada can get pipelines built, a task he says will require concerted effort from everyone involved to educate the rest of Canada on the virtues of the oilpatch.

"I think it's as simple as that. Make commitments, live by those commitments. Remove those delays and the regulatory processes that inhibit us from getting our products to market.

"And I think we can get the enthusiasm back."

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November 25, 2019 at 01:25AM

Asian markets gain amid fresh hopes for U.S.-China trade deal - MarketWatch

Asian shares were mostly higher Monday amid some optimism that the U.S. and China may edging closer to a trade deal.

Japan’s benchmark Nikkei 225 NIK, +0.78%   edged up nearly 1% in morning trading, while Australia’s S&P/ASX 200 XJO, +0.32%   added 0.6%. South Korea’s Kospi 180721, +1.02%   gained 1.2%. Hong Kong’s Hang Seng HSI, +1.50%   jumped 1.8%, while the Shanghai Composite SHCOMP, +0.72%   advanced 0.4%.

Among individual stocks, SoftBank 9984, +2.26%   gained in Tokyo trading, along with Honda 7267, +1.22%   and Nintendo 7974, +1.93%  , while Rakuten 4755, -0.85%   fell. In Hng Kong, insurer AIA Group 1299, +3.62%   surged, along with property companies such as Wharf Real Estate 1997, +4.68%   and Country Garden 2007, +3.68%  . Samsung 005930, +0.39%  advanced in South Korea, and BHP BHP, +1.77%   advanced in Australia, while Westpac WBC, -1.33%   retreated after it said it expects expense to rise as it works to crack down on financial crime.

Investors were watching the situation in Hong Kong, where pro-democracy candidates won a majority of seats in a local district council election over the weekend. After nearly six months of often violent protests, it is yet another challenge for Chief Executive Carrie Lam’s government.

“The result might not be market-friendly as it sets to challenge Carrie Lam’s leadership and bring up political uncertainties. But it could also mark a turning point in stopping the violent clashes,” said Margaret Yang, market analyst at CMC Markets in Singapore.

Markets around the world churned last week on uncertainty about whether the U.S. and China can soon halt their trade dispute, or at least stop it from escalating. New U.S. tariffs are set to hit Dec. 15 on many Chinese-made items on holiday shopping lists, such as smartphones and laptops.

Tariffs already put in place have hurt manufacturing around the world, and businesses have held back on spending given all the uncertainty about where the rules of global trade will end up.

President Donald Trump said last week that a deal between the world’s largest economies is “potentially very close” after Chinese President Xi Jinping said Beijing is working to “try not to have a trade war,” but will nevertheless fight back if necessary.

“A positive start to the trading week is expected with the trade comments from President Donald Trump last week though investors remain contemplating the U.S.-China trade issue that may not make concrete headway by year-end,” said Jingyi Pan, market strategist at IG.

On Wall Street, the S&P 500 SPX, +0.22%   rose 0.2% on Friday, to 3,110.29. The Dow Jones Industrial Average DJIA, +0.39%   gained 0.4% to 27,875.62. The Nasdaq composite COMP, +0.16%   added 0.2% to 8,519.88.

Benchmark crude CLF20, -0.03%   added 11 cents to $57.88 a barrel in electronic trading on the New York Mercantile Exchange. It fell 81 cents to $57.77 a barrel on Friday. Brent crude oil BRNF20, -0.02%  , the international standard, rose 8 cents to $62.45 a barrel.

The dollar USDJPY, +0.20%   strengthened to 108.79 Japanese yen from 108.64 yen on Friday.

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November 25, 2019 at 10:12AM