Twitter to Pay $809.5 Million to Settle Securities Suit
Topic of the day
Twitter Inc. (-2,4%) said it agreed to pay more than $800 million to settle a consolidated class-action securities lawsuit alleging the social-media company deliberately misled investors about user engagement in 2015. The San Francisco company on Monday said the proposed settlement would resolve all claims against Twitter and the other named defendants without any admission, concession or finding of any fault, liability or wrongdoing. The shareholder action claimed Twitter misled investors about two closely tracked metrics: monthly active users, a measure of the total number of users on its platform; and timeline views, a measure of how frequently users interacted with the platform. Twitter said it would pay $809.5 million under the binding agreement to settle claims alleging securities law violations, adding that it continues to deny any wrongdoing or improper actions. The company said it would use cash on hand to fund the settlement, which is subject to court approval, and that it expects to record a charge in the third quarter.
The Swiss stock market recorded significant losses on Monday. The SMI lost 1.4 per cent to 11,766 points. All 20 SMI stocks registered declines. 64.53 (previously: 84.64) million shares were traded. The banks Credit Suisse (-7.6%) and UBS (-6.6%) suffered by far the highest stock price declines in the SMI. Outside the SMI, Julius Baer fell by 5.7 per cent. The banking sector topped the list of losers globally. Investors worried that a collapse of Evergrande could take lenders down with it. Companies in the construction sector and suppliers are also likely to be in trouble. The share price of cement producer Holcim fell by 3.2 per cent. The shares of the luxury goods groups Richemont (-3.2 per cent) and Swatch (-2.7 per cent), which are heavily dependent on business in China, also took a beating. Swatch has no longer been included in the SMI since Monday; Logitech (+0.8%) took its place. Defensive Nestle (-0.5%) held up better than the market, but so did pharmaceutical stocks: Novartis and Roche fell 0.3% and 0.4% respectively. Alcon and Lonza closed with losses of 0.4 and 0.6 per cent.
European stocks slumped Monday, declining on fears over China's struggling property sector as well as the Chinese effort to rein in commodity prices. The broad retreat came amid concerns over property developer China Evergrande Group. Market participants increasingly believe that Beijing will let Evergrande fail and inflict losses on its shareholders and bondholders. The company's debt burden is the biggest for any publicly traded real estate management or development company in the world. Shares of Evergrande, which said Sept. 13 it was facing unprecedented difficulties, tumbled 12% in Hong Kong to their lowest level in a decade. The city's Hang Seng Index slid by 3.4%. Mainland Chinese markets were closed for a holiday. "Everyone is looking at Evergrande and saying 'has the time come for a major default in that area, and then the potential for contagion into the broader property sector?'" said Edward Park, chief investment officer at Brooks Macdonald. "It's an imminent risk now rather than being a theoretical risk as it has been for the past few years.“ Other factors weighing on markets Monday included a natural-gas shortage in Europe that has prompted the U.K. government to hold emergency talks with energy suppliers, Mr. Park said. Prudential lost 5.9% in London after the insurer said it planned to raise 22.49 billion Hong Kong dollars, equivalent to around $2.9 billion, by issuing new shares. The biggest Stoxx 600 gainer was Deutsche Lufthansa which rose 4% after announcing a EUR2.1 billion stock sale to repay its bailout. The continued rout in iron-ore futures sent miners including Anglo American and Rio Tinto sharply lower, as worries about the world's second-largest economy mounted with questions surrounding the ability of property developer China Evergrande to make two interest payments this week.
The New York Stock Exchange ended sharply lower on Monday as the financial difficulties of China's Evergrande developer raised concerns about the world's second-largest economy, leading to a flight to safety. At the close, the Dow Jones Industrial Average (DJIA) lost 1.8 percent to 33,970 points and the broader S&P 500 index fell 1.7 percent to 4,357.73 points. The technology-heavy Nasdaq Composite dropped 2.2% to 14,713.90 points. Oil stocks lost ground in the wake of crude oil prices. ExxonMobil fell 2.7% and Chevron 2.1%. A Food and Drug Administration advisory committee voted on Friday in favour of a Covid vaccine booster campaign by Pfizer (-0.7%) and BioNTech (-5.6%) for people over 65 and frail, but voted against giving a third dose to all those aged 16 and over. Tesla (-3.8%) was dragged down by the fall in its Chinese peers after electric vehicle maker Li Auto lowered its delivery forecast. Airlines resisted the move lower as investors welcomed the White House's announcement that health restrictions on flights from overseas would be lifted by early November. Delta gained 1.7%, American Airlines gained 3% and United Airlines gained 1.6%.
The stock markets in East Asia are mainly showing declines on Tuesday. While there is again no trading in Shanghai and Seoul due to public holidays, the Hong Kong stock exchange has stabilised after the previous day's crash to an 11-month low. The Hang Seng Index (HSI) loses another 0.3 per cent, but this time the market is weighed down mainly by declines in technology stocks. China Evergrande's share price falls another 3.5 per cent after plunging 10.2 per cent on Monday. In Tokyo, the Nikkei-225 is down 1.8 per cent after the holiday at the beginning of the week.
U.S. Treasury yields on Monday posted their biggest one-day drops since August as the potential collapse of a Chinese property development company rattled investors, raising the prospect of a spillover into other global markets. The 10-year Treasury note yields 1.308%, compared with 1.369% on Friday at 3 p.m. Eastern Time.
Citi increases target Deutsche Post to EUR 74 (69) - Buy
Berenberg lowers BHP to Hold (Buy) - Target 2,300 (2,700) p
Dt.Bank cuts Novartis to Sell (Hold) - CHF 70 (80)
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