Pacific Northwest Washington Mutual stock fell for the fifth time in six days after a Bank of America analyst said a takeover of the largest...
Washington Mutual stock fell for the fifth time in six days after a Bank of America analyst said a takeover of the largest U.S. savings and loan is unlikely.
Seattle-based Washington Mutual slid $1.28, or 7.1 percent, to $16.80 Monday. The stock has tumbled 62 percent over the past year and 23 percent so far this year.
“With an uncertain credit outlook, we think a takeover remains unlikely but have factored in a 25 percent probability,” analyst Robert Lacoursiere wrote in a note to investors. He recommends selling shares of the lender because of concerns about continued credit losses.
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“In the face of deteriorating industry fundamentals, we expect a decline in assets, slow earnings growth and increased credit exposure,” Lacoursiere wrote.
New name, state for security firm
Kirkland biometric security firm Saflink said Monday it is shedding its name and packing up for Texas after completing a merger with Austin-based IdentiPHI.
The combined company will keep IdentiPHI’s name and Austin headquarters.
Saflink’s former chief executive, Steve Oyer, will act as the new company’s chairman and CEO, and IdentiPHI’s former CEO, Peter Gilbert, will be vice chairman and senior vice president of sales and marketing.
Saflink shares, which trade in the loosely regulated over-the-counter market, closed at 3 cents Monday.
U.S. District Court
Lawyer sentenced over kickbacks
William Lerach, a former partner at a well-known New York law firm, was sentenced Monday to two years in federal prison for his role in a lucrative kickback scheme involving class-action lawsuits against some of the nation’s biggest corporations.
Lerach, 61, was also ordered to forfeit $7.75 million and pay a $250,000 fine.
“This whole conspiracy corrupted the law firm and it corrupted it in the most evil way,” U.S. District Judge John Walter said.
Authorities said Lerach’s former firm, now known as Milberg Weiss, paid $11.3 million in kickbacks to people who became plaintiffs in lawsuits targeting companies such as AT&T, Lucent, WorldCom, Microsoft and Prudential Insurance, prosecutors said.
Seven people, including three former partners at the firm, have pleaded guilty in the case.
Lerach, whose high-profile legal victories included a $7 billion judgment against now-defunct energy giant Enron, pleaded guilty in October to one count of conspiracy to obstruct justice and make false statements.
Online-auction site trims some fees
eBay bowed to pressure Monday from some of its high-volume sellers, saying it will further cut listing fees for books, music, movies and video games sold through the online-auction site.
Monday’s move amends a fee structure announced last month and could mean savings for merchants who sell those goods in high volume. Those sellers had expected to lose money from the new plan, slated to take effect Feb. 20. Some had threatened to stop selling on eBay.
The changes come as eBay struggles with flattening growth in listings and the number of active users — and with a gradual loss of market share to Amazon.com, which does not charge listing fees.
Toy company’s CEO to be replaced
Hasbro’s Chief Executive Alfred Verrecchia will step down in May and be replaced by Brian Goldner, who as chief operating officer has played a key role in the toymaker’s turnaround in the past several years.
The announcement by the world’s second-biggest toy company came as it reported a hefty 24 percent increase in fourth-quarter profit and said sales rose 16 percent, driven by its core brands including Transformers, Littlest Pet Shop and Star Wars.
Verrecchia, who turns 65 this week, will become chairman of the board at the Pawtucket-based company when Goldner, 44, starts his new job May 22.
Hasbro reported Monday that its 2007 revenue rose to $3.84 billion, up from $3.15 billion a year earlier.
Bank in scandal seeks to raise $8B
Société Générale, reeling from the biggest-ever loss blamed on a single trader, launched a heavily discounted rights issue on Monday, seeking nearly $8 billion to restore its position as a top-tier bank.
The fundraising comes as reports suggested that Jérôme Kerviel, the trader at the heart of the scandal, exchanged regular computer-text messages with a broker about his unauthorized trades. The broker was questioned by financial police last week about his contacts with Kerviel.
Société Générale, which said last month that Kerviel’s unauthorized trades cost more than $7 billion to unwind, is now seeking new capital to boost its financial standing and fund future growth.
Corporate-debt risk soars to high level
The cost of protecting corporate debt from default soared to a record as American International Group’s disclosure of “material weakness” in its derivatives accounting fueled concern that credit-market losses will deepen.
Benchmark credit-default swap indexes in the U.S. and Europe rose to the highest since they started trading in 2004. Contracts tied to AIG, the world’s largest insurer by assets, and American Express, the third-biggest credit-card network, both of New York, also rose to records.
AIG said auditors uncovered problems with the way it valued credit-default swaps and that it doesn’t have a price estimate for the contracts at year-end. AIG said the contracts declined $4.88 billion in October and November, four times greater than what it had previously indicated.
Credit-default swaps are financial instruments based on bonds and loans that are used to speculate on a company’s ability to repay debt.
Company to rent only Blu-Ray DVDs
Netflix, the world’s largest mail-order movie-rental company, said it will start offering high-definition DVDs exclusively in Sony’s Blu-ray format.
Netflix will phase out Toshiba’s HD-DVD format by the end of the year after a decision by four Hollywood movie studios to opt for the Blu-ray format over Toshiba’s for high-definition films and videos, the company said today. Best Buy also plans to recommend Blu-ray technology.
Netflix’s decision may hurt Toshiba further as the industry decides who will win out in the biggest format war since VHS beat out Betamax in the 1980s. Last month, Warner Bros. Entertainment said it would use Sony’s high-definition home-video format, which led Toshiba to cut prices.
“We’re now at the point where the industry can pursue the migration to a single standard,” Netflix said in a statement. The company said it received “a clear signal from the industry.” The majority of Netflix customers who receive high-definition DVDs already opt for Blu-ray over the HD-DVD format.
Compiled from Bloomberg News, Seattle Times staff and The Associated Press