Morning Beat: Yahoo! Inc. (YHOO), UBS Group AG (USA) (UBS), and Tesla Motors Inc (TSLA)
Yahoo! Inc. (NASDAQ:YHOO) is struggling to attract bids of more than $3 billion for its core business up for sale. According to the Wall Street Journal, the likes of Verizon Communications Inc. (NYSE:VZ) are only willing to pay between $2 billion and $3 billion for the assets.
The embattled search giant was hoping to get bids of between $4 billion and $8 billion. Bidders are reportedly tabling lower bids in response to recent presentations by CEO, Marissa Mayer, that have painted a clear picture of the flagging Yahoo! Inc. (NASDAQ:YHOO) business.
Given the size of the business up for sale, there is talk that interested parties could structure their proposals differently as they seek to acquire parts of the assets up for sale.
UBS Group AG (USA) (NYSE:UBS) is planning to trim more positions at its investment bank division, in response to a recent slump in earnings. The cost saving drive will target at least a dozen employees at the banks security unit in London. Some of the positions that could be scrapped are those in equities, debt capital markets, and real estate.
The securities unit reported its weakest earnings since the financial crisis, an underperformance that has not gone well with the management team. During the earnings call, CEO, Sergio Ermotti said they were looking at various cost saving initiatives to shore up earnings after a 64% dip in profits in Q1.
Tesla Motors Inc(NASDAQ:TSLA) proposed plan to bring to market its mainstream electric car Model 3, two years earlier, than initially planned, continues to evoke mixed reactions. Industry consultants and supplier executives are already questioning the move, which they say could be difficult to achieve. There are also concerns that it could turn out to be a costly affair.
Tesla Motors Inc (NASDAQ:TSLA) plans to double its production capacity to 100,000 cars in 2017 and 400,000 by 2018 to meet growing demand for its cars. Experts are however starting to question the estimates given that the same is highly dependent on suppliers supplying all the parts in time.
Fuelling doubts about the automaker ability to ramp up production is the fact that it is new into the production business. Automakers with decades of experience are known to produce 500,000 cars annually.
Bayer AG (ADR) (OTCMKTS:BAYRY) proposed takeover Monsanto Company (NYSE:MON) continues to evoke criticism on the street. Investors fear that such a move could significantly dilute their holdings given that German company will have to tap the debt market to finance the deal.
The stock fell the most in more than seven years after the news hit the wires underlining how investors are unhappy with the proposed takeover. Bayer AG (ADR) (OTCMKTS:BAYRY) could end up paying a 50% premium for Monsanto. Given the size of the deal, it could be forced to sell its US crop protection unit for $19 billion to finance part of the deal. Bayer is hoping to use the takeover to become the biggest supplier of farm chemicals in the world.
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