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BILLIONS ON SHOWTIME BROUGHT TO YOU BY WELLS FARGO
Just when Wells Fargo didn’t think it could get any worse … it did. As the fallout from the nuclear sales incentive scandal was settling, Wells unearthed another minefield by admitting to forcing customers into car insurance and overcharging mortgage borrowers to the tune of hundreds of millions of dollars.
And now the 165-year-old bank is paying the price, having settled with the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency for *raises pinky to corner of mouth* one-billion-dollars.
Mind you, the bank is already facing an unprecedented, indefinite ban on asset growth (capped at $2T) associated with the sales incentive debacle.
What’s in it for me?
… possibly a portion of the $182M restitution being paid to 570k car loan borrowers and a yet-to-be-determined remediation to 110k WF mortgage clients.
Water Cooler Talking Point: “I don’t hate Wells Fargo harkening back to their gunslinging, cowboy roots. Their sketchy business practices are essentially the 19th century equivalent of robbing a locomotive. In an age of boring regulation and capital requirements, maybe, just maybe this is exactly what the banking industry needs? Ok … probably not.”
The owner of PokerStars is going all in on sports gambling purchasing Sky Betting & Gaming, a UK-based gambling giant, for $4.7B.
The deal is comprised of $3.6B in cash and newly-issued shares. PokerStars’ debt is financed through the combination of a term loan, senior unsecured notes, and a revolving credit facility. Scratch-off lottery tickets were scrapped from the deal at last minute.
This purchase will reduce Star Group’s heavy reliance on online poker, which previously accounted for 67% of the World Series of Poker sponsor’s revenue. Post-acquisition that number will be reduced to just 37%.
Water Cooler Talking Point: “This is a lot of debt to be taking on. Maybe PokerStars has a problem. If so they should call the National Problem Gambling Hotline at 1-800-522-4700.”
Sometimes it’s just not your day, your week, your month or even your year. After a merger with Broadcom was blocked in early 2018, smart-phone chipmaker Qualcomm came in like a lion, thinning its workforce by 1.5k. Spring cleaning indeed.
The move was expected as the San Diego based company vowed in January to cut $1B worth of costs in order to boost profit.
Qualcomm isn’t getting any help from its business partners either. Apple sued its longtime product manufacturer, and ZTE just got banned from doing business with US companies. Then there’s that $1B antitrust fine from Europe on the horizon. Only 252 days until 2019 …
Water Cooler Talking Point: “Qualcomm needs a friend and a sponsor. Not sure what their Board of Directors has been doing while the company has been ruining its life.”
IN OTHER NEWS
- SunTrust Bank has reason to believe a disgruntled ex-employee stole data including names, addresses, phone numbers, and account balances of 1.5M customers and sold it on the black market.
- Fairfax, an investment firm run by billionaire Prem Watsa agrees to purchase Toys R Us’ Canadian assets for $267M. The deal allows for other bidders submit proposals by end of the day today.
- Ford plans to take bids for advertising currently managed by WPP, the Madison Avenue juggernaut who just lost its embroiled founder and CEO, Martin Sorrell. Times are tough at WPP.
- SmugMug plans to buy photo-sharing heavy-hitter, Flickr, from Oath (aka Verizon’s digital media arm). Financial terms were not disclosed. Does anyone under the age of 45 use Flickr?
- Walmart will begin allowing in-store staffers to wear jeans. No word on if Wrangler has an exclusive endorsement deal.
- US indices were down Friday:
- DOW: -0.82%
- S&P 500: -0.85%
- NASDAQ: -1.27%