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Minggu, 23 Februari 2020

Intuit Near Deal to Buy Credit Karma for $7 Billion - The Wall Street Journal

Buying Credit Karma, the buzzy startup with headquarters in San Francisco, would give Intuit a... — Buying Credit Karma, the buzzy startup with headquarters in San Francisco, would give Intuit a stronger foothold in online personal finance.
Photo: Jason Henry for The Wall Street Journal

Cara Lombardo and

Cara Lombardo

The Wall Street Journal

Biography
@CaraRLombardo
cara.lombardo@wsj.com

Dana Cimilluca

The Wall Street Journal

Biography
@danacimilluca
Dana.Cimilluca@wsj.com

Feb. 22, 2020 11:58 pm ET

Intuit Inc. INTU -1.22% is nearing a deal to buy personal-finance portal Credit Karma Inc. for about $7 billion in cash and stock, in a move that would push the bookkeeping-software giant further into consumer finance, according to people familiar with the matter.

The maker of TurboTax could announce a deal to buy privately held Credit Karma by Monday, assuming talks don’t fall apart, the people said. Credit Karma was valued at roughly $4 billion in a private share sale about two years ago.

The deal would mark Intuit’s largest acquisition by far in its 37-year history and the first sizable transaction under Chief Executive Sasan Goodarzi, who took over a little more than a year ago.

Credit Karma offers its customers free access to their credit scores and borrowing history, alerts to possible data breaches, credit monitoring and tax preparation and filing. Customers in turn receive offers from other companies for credit cards and loans tailored to their credit history, and Credit Karma makes money when customers use those products.

Adding the buzzy startup to its stable would give Intuit a stronger foothold in the burgeoning realm of online personal finance. In addition to TurboTax, the online software that millions of people use to file their taxes, Intuit’s offerings include QuickBooks bookkeeping software used by businesses and Mint, an online-budgeting platform that also pitches individuals financial products. Intuit has a market value of roughly $77 billion.

A Credit Karma deal would be Intuit CEO Sasan Goodarzi’s first sizable transaction in the... — A Credit Karma deal would be Intuit CEO Sasan Goodarzi’s first sizable transaction in the job, which he has held for a little more than a year.
Photo: Adm Golub/Associated Press

Under the deal being discussed, Credit Karma would operate as a stand-alone unit with its chief executive, Kenneth Lin, remaining in charge, one of the people said. But joining forces could allow both Credit Karma and Intuit to fine-tune their recommendations to customers by expanding the trove of financial data they use to make suggestions.

The move would cap a rapid rise for Credit Karma, which is backed by funders including private-equity firm Silver Lake and financial-technology venture firm Ribbit Capital. Based in San Francisco and founded in 2007 by Mr. Lin, Nichole Mustard and Ryan Graciano, Credit Karma at one point was eyeing an initial public offering no earlier than late 2019.

But the IPO market has looked more dubious after the disappointing debuts of some startups including Uber Technologies Inc. The merger market, especially for financial technology companies, has remained strong. Such deals have accounted for several of the largest transactions announced so far this year, including Morgan Stanley’s $13 billion purchase of E*Trade Financial Corp., announced this past week, and Visa Inc.’s $5.3 billion acquisition of startup Plaid Inc. announced last month.

Mountain View, Calif.-based Intuit was founded in 1983 and went public in 1993. Best-known for its bookkeeping software, the company has said it wants to push further into the finances of the individuals and businesses it serves by adding more offerings to its platform. It is set to report its fiscal second-quarter earnings Monday afternoon.

Write to Cara Lombardo at cara.lombardo@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

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2020-02-23 04:58:00Z
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Berkshire Hathaway empire ready for Warren Buffett’s departure - South China Morning Post

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Berkshire Hathaway empire ready for Warren Buffett’s departure South China Morning Post
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2020-02-23 02:17:08Z
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Sabtu, 22 Februari 2020

Warren Buffett’s Berkshire Hathaway Stock Underperforms the Most Since 2009 - The Wall Street Journal

Berkshire Hathaway Chairman Warren Buffett, left, and Vice Chairman Charlie Munger at the annual Berkshire... — Berkshire Hathaway Chairman Warren Buffett, left, and Vice Chairman Charlie Munger at the annual Berkshire shareholder shopping day in Omaha, Neb., last year.
Photo: scott morgan/Reuters

Nicole Friedman

The Wall Street Journal

Biography
@nicolefriedman
nicole.friedman@wsj.com

Updated Feb. 22, 2020 10:56 am ET

Warren Buffett sought to reassure investors about Berkshire Hathaway Inc.’s BRK.B 0.51% long-term future following an underwhelming year for the conglomerate’s performance.

The 89-year-old Mr. Buffett, Berkshire’s chairman and chief executive, is renowned for his long-term success as a stock investor and deal maker. But in recent years, Berkshire’s stock performance has failed to beat the market.

Berkshire’s stock rose 11% in 2019 compared with a 31.5% total return in the S&P 500, including dividends—Berkshire’s biggest underperformance since 2009.

Mr. Buffett has long said that investors should focus on companies’ long-term performance and ignore shorter-term fluctuations in the stock market.

Some investors have agitated for Berkshire to spend more of its massive cash pile buying back shares or paying a dividend. They have also asked to hear more from Ajit Jain and Greg Abel, the two Berkshire vice chairmen who are leading contenders to succeed Mr. Buffett as CEO.

In his annual letter to shareholders released Saturday, Mr. Buffett mostly skirted the issue of Berkshire’s underperformance relative to the broader market. But he said shareholders should not be worried about the future of Berkshire after he or his 96-year-old business partner, Berkshire Vice Chairman Charlie Munger, die.

“Your company is 100% prepared for our departure,” Mr. Buffett said.

He also said that at Berkshire’s annual meeting in May, shareholders will be able to ask questions of Messrs. Jain and Abel. That is a change from previous meetings, when any comments by Berkshire leaders besides Messrs. Buffett and Munger have been rare.

“I’m so excited for that. I think it’s an absolutely terrific idea,” said Thomas Russo, partner at Gardner Russo & Gardner, a longtime holder of Berkshire shares. He said it would be helpful for shareholders to hear more directly from Messrs. Jain and Abel about overseeing the day-to-day operations of Berkshire’s companies.

Berkshire increased its buybacks in the fourth quarter to $2.2 billion, bringing its total repurchases for the year to $5 billion, the company said. That still barely dented the company’s huge pile of cash, which totaled $128 billion as of Dec. 31, the company said Saturday, slightly down from a record $128.2 billion at the end of the third quarter.

In his letter, Mr. Buffett lamented the difficulty of finding attractively priced acquisition targets that are big enough to move the needle for Berkshire.

“The opportunities to make major acquisitions possessing our required attributes are rare,” he said.

Berkshire’s biggest deal in 2019 was a $10 billion investment in Occidental Petroleum Corp. ’s bid to acquire Anadarko Petroleum Corp.

Some of Berkshire’s 60-odd subsidiaries completed acquisitions, but those deals tend to be small. Berkshire spent $1.7 billion on bolt-on acquisitions in 2019, the company said, up from $1 billion the prior year.

“I think there’s more capacity for buybacks,” said James Shanahan, senior equity-research analyst at Edward Jones. “It’s no doubt that the significant outstanding cash balances have been an extraordinary drag on earnings.”

The Omaha, Neb., conglomerate reported net earnings of $29.2 billion, or $17,909 per Class A share equivalent, up from a loss of $25.4 billion, or $15,467 a share, the year before. Berkshire’s earnings were mostly boosted by unrealized investment gains, while its results a year ago were dragged down by an unexpected write-down at Kraft Heinz Co.

Berkshire posted operating earnings of $4.4 billion, down from $5.7 billion a year earlier, due to lower results in insurance underwriting and some of Berkshire’s smaller operating businesses. Operating earnings exclude some investment results and Mr. Buffett has said they are more reflective of Berkshire’s performance than net earnings, which can fluctuate widely due to unrealized investment gains or losses.

Berkshire’s Class A shares closed Friday at $343,499, up 1.1% for the year. In contrast, the S&P 500 is up 3.3% this year.

Cathy Seifert, equity analyst CFRA Research, said she thought Mr. Buffett should have addressed Berkshire’s results compared with the index more directly. “It’s easy to say you’re not concerned about short-term performance,” she said. But “this short-term underperformance could turn into a longer-term underperformance.”

Mr. Buffett also used his letter to discuss corporate boards of directors, which he said are often ill-equipped to oversee companies and incentivized not to challenge executives. Noting that he has served as a director for 21 public companies over the past 62 years, Mr. Buffett complained that board members are often too reliant on their board-related income to truly function as independent overseers. He also said many board members are not experts in finance or investing.

“Almost all of the directors I have met over the years have been decent, likable and intelligent,” Mr. Buffett said. “Nevertheless, many of these good souls are people whom I would never have chosen to handle money or business matters. It simply was not their game.”

Berkshire runs a large insurance operation as well as railroad, utilities, industrial manufacturers and retailers. Its holdings include recognizable names like Dairy Queen, Duracell, Fruit of the Loom, Geico and See’s Candies.

Berkshire’s insurance business sits at the core of its moneymaking machine. Insurance brings in billions of dollars of “float,” upfront premiums customers pay and that Berkshire invests for its own gain. Berkshire also holds large stock investments, including in Apple Inc. and Wells Fargo & Co.

Write to Nicole Friedman at nicole.friedman@wsj.com

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2020-02-22 15:56:00Z
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Buffett spends $2.2 billion to buy back Berkshire stock, outlines plan for how it will be spent - KETV Omaha

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2020-02-22 14:30:00Z
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Read Warren Buffett's annual letter to Berkshire Hathaway shareholders - CNBC

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2020-02-22 13:10:00Z
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What the Morgan Stanley-E*Trade Deal Means for Schwab, Fidelity, and Other Big Banks - Barron's

Wall Street, searching for a fresh burst of growth, is going all-in on Main Street.

The latest effort on this front came this past week when Morgan Stanley (ticker: MS) unveiled a $13 billion all-stock deal to buy E*Trade Financial (ETFC), signaling that the elite Wall Street bank will compete aggressively for retail banking and brokerage customers. The combined entity will have revenue of $44 billion, eight million customer accounts, and $3.1 trillion of client assets.

...

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2020-02-22 02:29:00Z
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Jumat, 21 Februari 2020

Deere stock soars on an unexpected rise in profits Reuters - msnNOW

Deere on Friday reported an unexpected increase in first-quarter profit and retained its full-year earnings forecast as signs of stabilization in the U.S. farm sector offset weak demand for construction machines, sending its shares soaring.

The farm equipment manufacturer reported net income of $517 million, or $1.63 per share, for the quarter ended Feb. 2, up from $498 million, or $1.54 per share, in the same period last year.

That compares with the average analyst estimate of $1.26 per share, according to Refinitiv Eikon data.

The Moline, Ill., company still expects net income in 2020 to be in the range of $2.7 billion to $3.1 billion.

The world's largest farm equipment maker's shares were last up 9% at $180.75.

Deere's earnings in the past quarters were buffeted by a nearly two-year-long U.S.-China trade war that hit U.S. agricultural exports, leaving farmers struggling to turn a profit.

But President Donald Trump's interim trade deal with China has raised hopes of a recovery in farm machinery demand.

"Farmer confidence, though still subdued, has improved due in part to hopes for a relaxation of trade tensions and higher agricultural exports," Chief Executive John May said in a statement.

Improved pricing power along with lower production costs and warranty expenses in the latest quarter drove up operating profits at its farm and turf business, which accounts for nearly 60% of Deere's revenue.

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2020-02-21 15:00:00Z
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Minggu, 23 Februari 2020

Buying Credit Karma, the buzzy startup with headquarters in San Francisco, would give Intuit a stronger foothold in online personal finance.

A Credit Karma deal would be Intuit CEO Sasan Goodarzi’s first sizable transaction in the job, which he has held for a little more than a year.

Sabtu, 22 Februari 2020

Berkshire Hathaway Chairman Warren Buffett, left, and Vice Chairman Charlie Munger at the annual Berkshire shareholder shopping day in Omaha, Neb., last year.

Jumat, 21 Februari 2020