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Tag: takeovers

  • PacWest stock plummets more than 50% after report of potential sale; other bank stocks fall too

    PacWest stock plummets more than 50% after report of potential sale; other bank stocks fall too

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    PacWest Bancorp PACW shares tumbled more than 50% in after-hours trading Wednesday, taking other bank stocks with it after a report that the company’s executives were weighing a possible sale.

    The report, from Bloomberg News, adds to the concerns over the financial stability of regional banks, following the collapse in March of Silicon Valley Bank and Signature Bank, and the sale of First Republic Bank to JPMorgan Chase & Co. JPM this week. PacWest’s shares have been diving this week in the wake of First Republic’s collapse….

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  • JPMorgan to take over First Republic after fourth bank failure of the year

    JPMorgan to take over First Republic after fourth bank failure of the year

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    JPMorgan Chase has won the auction to take over fallen First Republic Bank, the Federal Deposit Insurance Corp. announced early Monday morning.

    The deal will see America’s largest bank JPM assume all the deposits and “substantially all the assets” of First Republic FRC, which became the fourth U.S. bank to fail this year.

    “Our government invited…

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  • JPMorgan to take over First Republic after regional bank was closed

    JPMorgan to take over First Republic after regional bank was closed

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    JPMorgan Chase has won the auction to take over fallen First Republic Bank, the Federal Deposit Insurance Corp. announced early Monday morning.

    The deal will see America’s largest bank JPM assume all the deposits and “substantially all the assets” of First Republic FRC.

    The deal will see First Republic depositors — which include 11 leading…

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  • Getty Images stock gets a boost after activist investor recommended a sale of the company

    Getty Images stock gets a boost after activist investor recommended a sale of the company

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    Shares of Getty Images Holdings Inc. GETY got a 5.7% boost in premarket trading Tuesday, after activist investor Trillium Capital LLC urged the visual content creator to increase shareholder value by selling the company. Trillium, which said it owned “hundreds of thousand shares” of Getty stock and stock equivalents, said the company’s board has not acted on “obvious opportunities” to increase shareholder value, as the stock has tumbled since the Getty went public. After the $4.8 billion acquisition deal by special purpose acquisition company (SPAC) CC Neuberger Principal Holdings II closed on July 22, 2022, the stock…

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  • Credit Suisse chairman apologizes at final shareholder meeting in 167-year history

    Credit Suisse chairman apologizes at final shareholder meeting in 167-year history

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    “We wanted to put all our energy and our efforts into turning the situation around and putting the bank back on track. It pains me that we didn’t have the time to do so, and that in that fateful week in March our plans were disrupted. For that I am truly sorry. I apologize that we were no longer able to stem the loss of trust that had accumulated over the years, and for disappointing you.

    That’s Axel Lehmann, the chairman of Credit Suisse, addressing shareholders after the deal to be purchased at a cut-rate price by UBS, ending 167 years of independence. Shareholders at neither Credit Suisse
    CSGN,
    +1.39%
    nor UBS
    UBSG,
    +1.20%
    will get a chance to vote on the deal.

    Credit Suisse shares were trading at 0.81 francs, just below the 0.84 franc per share offer the UBS bid is now worth. A year ago, Credit Suisse was worth more than 7 francs per share.

    Lehmann, as noted in his speech, was not at the bank for its many scandals and trading debacles, most notably but hardly limited to the losses from the blowup of the Archegos family office and the freezing of funds tied to Greensill.

    “The period from October to March was not long enough. One legacy issue after another had already seen trust eroded – and with it, patience dwindled. At that, we failed. It was too late. The bitter reality is that there wasn’t enough time for our strategy to bear fruit,” said Lehmann.

    He said the deal “had to go through,” or the bank would have to restructure under Swiss banking law. “This would have led to the worst scenario, namely a total loss for shareholders, unpredictable risks for clients, severe consequences for the economy and the global financial markets,” he said.

    CEO Ulrich Körner made a similar apology. “We ran out of time. This fills me with sorrow. What has happened over the past few weeks will continue to affect me personally and many others for a long time to come,” he said.

    He specifically tied the collapse of SVB Financial and Signature Bank to its own demise.

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  • First Citizens enters agreement to buy Silicon Valley Bridge Bank, says FDIC

    First Citizens enters agreement to buy Silicon Valley Bridge Bank, says FDIC

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    First Citizens BancShares Inc. has entered a deal to assume all the deposits and loans of the failed Silicon Valley Bridge Bank from the Federal Deposit Insurance Corp., the regulator announced on Monday.

    As of Monday, the 17 former branches of Silicon Valley Bridge Bank, National Association, will open as First Citizens
    FCNCA,
    -1.11%    ,
    FDIC said. The FDIC has been trying to auction off Silicon Valley Bank for about two weeks, since it became the largest U.S. bank to go bust since Washington Mutual in 2008.

    As of March 10, Silicon Valley Bridge Bank had approximately $167 billion in total assets and about $119 billion in total deposits, the FDIC said. The deal included the purchase of about $72 billion of Silicon Valley Bridge Bank’s assets at a discount of $16.5 billion.

    Roughly $90 billion in securities and other assets will remain in FDIC receivership for disposition, and the regulator has received equity appreciation rights in First Citizens common stock worth up to $500 million.

    The FDIC and the Raleigh, North Carolina-based bank entered into a loss–share transaction on the commercial loans it purchased of former Silicon Valley Bridge Bank.  The FDIC said it will share in the losses and potential recoveries on the loans covered by that agreement, which is “projected to maximize recoveries on the assets by keeping them in the private sector,” and minimize disruptions for loan customers.  First Citizens will also assume all loan–related qualified financial contracts.

    The FDIC estimates the cost of the failure of Silicon Valley Bank to its Deposit Insurance Fund at roughly $20 billion, the exact cost of which will be determined when receivership is terminated.

    The FDIC created Silicon Valley Bridge Bank, National Association, following the closure of Silicon Valley Bank by the California Department of Financial Protection and Innovation.

    Speculation that First Citizens, which has bought 20 failed banks since 2009, was pursuing an acquisition of Silicon Valley National Bank emerged last week. Bloomberg, which first reported First Citizens would enter a deal for the bank on Sunday, also reported that Valley National Bancorp
    VLY,
    +2.87%
     was trying to purchase the failed bank. It said First Citizens had previously made an offer for the bank immediately after it collapsed.

    First Citizens shares have sunk 23% year to date — mostly over the past month — and are down 15% over the past 12 months, compared to the S&P 500’s
    SPX,
    +0.56%
    3.4% gain in 2023 and 13% decline over the past year.

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  • How First Republic stock’s tailspin started and why it hasn’t stopped

    How First Republic stock’s tailspin started and why it hasn’t stopped

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    Shortly after Silicon Valley Bank disclosed on March 8 that it was running short of cash and needed to raise capital, First Republic Bank’s epic stock slide began.

    The stock
    FRC,
    -15.47%
    has lost 90% of its value in less than two weeks, hitting an all-time low of $12.18 a share on Monday.

    Supportive comments from Treasury Secretary Janet Yellen helped it snap back on Tuesday, but it’s hovering between positive and negative territory on Wednesday as investors await a key Federal Reserve decision on interest rates.

    First Republic finds itself in a tough spot with a low share price and fresh debt downgrades and not even efforts to inject $30 billion into the company’s deposits in a scheme backed by JPMorgan Chase & Co.
    JPM,
    -2.58%
    and a backstop from the U.S. Federal Reserve seem to be helping.

    The bank’s troubles stem from its overlap both in clientele and parts of its balance sheet with doomed Silicon Valley Bank, which is being sold off this week by the Federal Deposit Insurance Corp. after it officially failed on Friday, March 10. Silicon Valley Bank suffered a classic run on a bank, when depositors, nervous that it needed to raise capital, yanked their deposits.

    First Republic has suffered the same deposit flight.

    As a San Francisco bank with a focus on serving high-end clients, First Republic has acted as wealth manager for the greater Silicon Valley region of executives, managing directors and startup CEOs, as well as their counterparts on the East Coast.

    The list incudes Facebook
    META,
    -1.16%
    Founder Mark Zuckerberg, who has a large mortgage courtesy of First Republic, as the Wall Street Journal has reported. Few of its loans ever sour — it had $213 billion in assets at the end of 2022 and $176 billion in deposits.

    With its sophisticated lending products and access to the technology startup world, Silicon Valley Bank was also known for its a customer base from the venture capital and private equity world. 

    Also Read: 24 bank stocks that contrarian bottom-feeders can feast on now

    Those well-heeled clients of both banks started running into problems as interest rates rose last year, pundits warned of an economic slowdown and investors switched to a risk-off strategy of conserving cash and containing costs.

    The collapse of FTX and strain in the crypto world also fed the need for cold, hard government-backed currency. Rising interest rates made it more expensive to borrow and put a chill on the deal-making environment.

    All of this and other factors led to a drain on deposits at Silicon Valley Bank and others as it faced “elevated client cash burn” at a rate that was double pre-2021 levels, even as venture capital and private equity funds were slowing down their capital raising activities, the company said in an ill-fated mid-quarter report.

    On March 8 after the market close, Silicon Valley Bank said it planned to sell $2.25 billion in common stock and a type of preferred stock, with one of its major clients, private equity firm General Atlantic, in line to buy $500 million worth. Goldman Sachs Group Inc.
    GS,
    -1.14%
    was handling the deal.

    The company also disclosed that it had lost $1.8 billion on the sale of $21 billion in available-for-sale securities on its balance sheet to cover deposit withdrawals.

    It was this last part that caused big trouble for First Republic. Not only did its clientele overlap with Silicon Valley Bank, its holdings included some of the same securities that Silicon Valley Bank sold at a loss.

    Wall Street investors quickly started bidding down shares of First Republic and other regional banks and the credit rating agencies moved in, cutting the bank’s rating from investment grade deep into junk in just a few days.

    None of this helped First Republic hold on to its deposits.  

    As one longtime banking official said recently, money from Silicon Valley types typically comes in the form of uninsured deposits, which means they’re in excess of the $250,000 that the FDIC will guarantee if a bank goes out of business. This so called hot-money is great for banks when times are good, but can move away quickly if the environment changes.

    “When hot money gets nervous, it runs,” former FDIC chairman Bill Isaac told MarketWatch recently.

    While an unprecedented effort on March 16 by 11 banks to inject $30 billion into First Republic’s deposits temporarily provided a lift to its stock, the move apparently wasn’t enough.

    First Republic said last Thursday that it had borrowed between $20 billion and $109 billion from the Federal Reserve during that week. It also increased short-term borrowing from the Federal Home Loan Bank by $10 billion at a rate of 5.09%.

    Jefferies analyst Ken Usdin said the numbers revealed that First Republic’s total deposits had dropped by up to $89 billion in the week ended March 17 past week—or about three times more than the $30 billion injection from the bank.

    “With [First Republic’s] earnings profile clearly impaired, the new deposits effectively bridge the estimated $30.5 billion of uninsured deposits still on [the bank’s] balance sheet, providing time for [it] to likely explore a sale,” Usdin said.

    Janney Montgomery Scott analyst Tim Coffey said First Republic’s stock drop in recent days reflects uncertainty around what a potential second bailout would look like, or how the bank’s balance sheet is faring after a steep run in deposits and the falling value of its long-dated securities.

    Another unknown is the company’s latest Tier 1 capital Ratio, a key measure of a bank’s balance sheet strength.

    Like Silicon Valley Bank, First Republic’s balance sheet has had more than the usual exposure to long-dated securities, which have been falling in value as interest rates rise. 

    A typical mix for a bank of comparable size is to hold about 72% of securities as available for sale. The remaining 28% are held to maturity. First Republic’s mix is reversed with 12% available for sale and 88% held to maturity.

    The bank’s mix of longer-dated assets now commands a lower market value, given where interest rates are. The bank’s emphasis on long-dated securities provided a better return when interest rates were near zero, but they have been a liability in the current environment.

    “They’ve had duration risk where the value of their securities started going down as interest rates rose,” Coffey told MarketWatch.

    Another problem for First Republic is that many of those long-dated securities are in the mortgage business, which has been ailing as interest rates rise.

    Plenty of questions remain about First Republic’s situation and whether it could have been avoided. The challenges facing First Republic as well as the demise of Silicon Valley Bank and Signature Bank will be the focus of hearings on Capitol Hill next week.

    Wall Street is also awaiting comments from the U.S. Federal Reserve when it updates its interest rate policy later on Wednesday.

    And JPMorgan Chase continues to work with First Republic on a potential bailout, even as the bank has reportedly hired Lazard
    LAZ,
    -2.17%
    to weigh strategic alternatives.

    All of these factors add to the uncertainty swirling around First Republic, giving investors little reason to go long on the stock for now.

    Also Read: 24 bank stocks that contrarian bottom-feeders can feast on now

    Related: Senate Banking Chair Sherrod Brown sees bipartisan support for changes to deposit insurance

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  • Flagstar Bank to take over most of Signature Bank’s deposits, FDIC says

    Flagstar Bank to take over most of Signature Bank’s deposits, FDIC says

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    Flagstar Bank, a subsidiary of New York Community Bankcorp Inc., on Sunday agreed to assume most of Signature Bank’s deposits and some of its loans.

    New York-based Signature Bank was closed by regulators last week, following the failures of Silicon Valley Bank and Silvergate Bank.

    In a statement Sunday, the Federal Deposit Insurance Corp. said Flagstar will take over Signature’s 40 former branches effective Monday, and they will operate as normal.

    Signature Bank depositors will automatically become Flagstar depositors, the FDIC said, with all deposits insured up to their limits. About $4 billion in deposits related to Signature’s digital banking business is not included in the deal, and the FDIC will provide those deposits directly to customers.

    Sunday’s deal includes the purchase of about $38.4 billion in assets from the former Signature Bank,  including loans of $12.9 billion purchased at a discount of $2.7 billion.

    About $60 billion in Signature’s loans will remain in receivership for later disposition by the FDIC. The FDIC also received equity appreciation rights in New York Community Bancorp
    NYCB,
    -4.66%
    common stock with a potential value of up to $300 million.

    The FDIC estimated that the cost of the failure of Signature Bank to its Deposit Insurance Fund will be about $2.5 billion.

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  • Here’s why UBS’s deal to buy Credit Suisse matters to U.S. investors

    Here’s why UBS’s deal to buy Credit Suisse matters to U.S. investors

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    Thousands of miles away from U.S. shores last Wednesday, a headline began working its way across Europe, then Wall Street, sparking fresh panic as it dawned on investors that they may be facing yet another banking crisis.

    Shares of Credit Suisse
    CS,
    -6.94%

    CSGN,
    -8.01%
    would eventually sink 25% last week to a fresh record low, unable to find footing days after the head of top shareholder Saudi National Bank said they won’t invest any more in the bank. By Sunday, the struggling Swiss bank had a new owner, leaving investors to wonder if at least one chapter in a current roller coaster of global banking stress can be closed.

    Swiss authorities steered rival UBS AG
    UBS,
    -5.50%
    to an all-stock deal worth 3 billion francs ($3.25 billion), or 0.76 francs per share, a not-so-slight discount to the 1.86 franc close on Friday of Credit Suisse. So important was the agreement, it was announced by Switzerland’s President Alain Berset, with both banks and the chairman of the Swiss National Bank on either side of him.

    “With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation,” the SNB said in a statement.

    The Swiss National Bank said either Swiss bank can borrow up to 100 billion francs in a liquidity assistance loan, and Credit Suisse will get a liquidity assistance loan of up to 100 billion francs, backed by a federal default guarantee. The U.S. Federal Reserve had worked with its Swiss counterpart on the deal as well.

    “We welcome the announcements by the Swiss authorities today to support financial stability. The capital and liquidity positions of the U.S. banking system are strong, and the U.S. financial system is resilient,” said a statement Sunday by Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell.

    European Central Bank President Christine Lagarde also praised Swiss authorities for “restoring orderly market conditions and ensuring financial stability,” while reiterating the “resilience” of the euro-area banking sector. She said the ECB stands ready to provide liquidity if needed.

    Her comment comes days after the the ECB pulled the trigger Thursday on a 50-basis-point rate hike, as it warned “inflation is projected to remain too high for too long.”

    The deal for Credit Suisse comes in the wake of stress on the U.S. banking sector, triggered by the collapse of Silvergate Bank, Silicon Valley Bank and Signature Bank, all within the space of a week.

    “Virtually everyone at this high-level Swiss press conference — government officials, regulator, central bank governor, and executives of the two banks — blamed the US banking sector turmoil for being the catalyst for the financial turmoil in #Switzerland,” tweeted Mohamed A. El-Erian, chief economic adviser at Allianz, of the press conference Sunday with Swiss authorities to announce the deal.

    And for U.S. investors who have had quite enough anxiety lately, a logical question would be to ask if the deal that brings together the two Swiss banking giants will now remove one layer of stress from global markets, and hence Wall Street.

    For that reason, many will be watching how Asian and U.S. equity futures trade later on Sunday, as well as Europe’s opening reaction on Monday.

    The Credit Suisse news may only go so far to assuage investors, with some raising an eyebrow over Powell and Yellen’s Sunday statement about the Swiss deal. “Seriously, if everyone truly believed the ‘The capital and liquidity positions of the U.S. banking system are strong, and the U.S. financial system is resilient’ … Would they have to tell us? Are these words enough?” said Jim Bianco, president of Bianco Research, on Twitter. “Or do investors want to see Warren Buffett writing checks to regional banks in the next two hours (before Asia opens)?”

    Fox News and other media outlets reported over the weekend that the Berkshire Hathaway
    BRK.A,
    -2.76%

    BRK.B,
    -2.81%
    chairman and CEO had been talking to President Joe Biden’s administration in recent days over possible investments in the battered regional bank sector, and offering his advice.

    The billionaire investor was responsible for a capital injection to Bank of America
    BAC,
    -3.97%
    in 2011 as its shares tumbled due to subprime mortgages, as well as $5 billion to Goldman Sachs
    GS,
    -3.67%
    amid the 2008 financial crisis.

    Some had said ahead of the deal last week that global-market stability depended on the Swiss first getting their house in order.

    “I don’t think there are any direct consequences for U.S. investors, but it’s extremely negative for sentiment if a major Swiss bank fails, hot on the heels of SVB/SBNY,” Simon Ree, the founder of Tao of Trading options academy school and author of the book by the same name, told MarketWatch last week.

    “The market will be (temporarily) wondering who’s next. It could start to have the optics of a global banking crisis, rather than an idiosyncratic failure of a niche U.S. regional bank,” said Ree.

    Credit Suisse’s troubles came amid a revamp and five straight money-losing quarters, following a painful legacy that included billions worth of exposure to the collapsed Archegos family office and $10 billion worth of funds tied to Greensil Capital it had to freeze.

    Read: In its delayed annual report, Credit Suisse admitted to financial control weaknesses

    “The SNB and the Swiss government are fully aware that the failure of Credit Suisse or even any losses by deposit holders would destroy Switzerland’s reputation as a financial center,” said Otavio Marenzi, CEO of Opimas, a management consulting firm focused on global capital markets, in a note to clients last week.

    The bank’s plummeting stock price and soaring bond yields was “mimicking Silicon Valley Bank’s recent collapse in a frightening way. In terms of the outflow of deposits, Credit Suisse’s position looks even worse,” said Marenzi.

    Over there?

    As far as some are concerned, the market may have more stress ahead of it.

    “The SVB failure highlights the potential for other skeletons to be hidden in closets and the market will spend the next few weeks/months hunting them out. Even just the extreme volatility we’ve seen on bond markets the last five days renders any attempt to ascribe a value to other asset classes redundant,” said Ree.

    Plus: Here’s what’s really protecting your bank deposits

    His view is shared by many analysts, who in part point to increasing uncertainty around how the Federal Reserve will react going forward as it tries to balance market and economic risks. Some now see full percentage rate cuts by year-end, amid banking stress.

    Samantha LaDuc, the founder of LaDucTrading.com who specializes in timing major market inflections, said she stands by her advice (that she shared with MarketWatch in February) that investors are being “paid to wait,” by staying in cash.

    Read: Looking for a place for your cash? Grab these 5% CDs while you still can.

    “I have been literally recommending and tweeting to clients that we are PAID TO WAIT in T-bills at 5% until [the] bond market can figure out if we have recession or not. All that happened last week pulled forward recession risk,” she told MarketWatch.

    Prior to the SVB crisis, she had been recommending clients short reflation trades, such as banks
    XLF,
    -3.22%

    KRE,
    -5.99%    ,
    energy
    XLE,
    -1.57%
    and metals and mining
    XME,
    -0.78%

    COPX,
    +0.63%

    SLX,
    -1.96%    ,
    and has been saying she sees “unattractive risk-reward for either stocks or bonds.”

    Opimas’ Marenzi said the threat to Wall Street from Credit Suisse was simple:

    “You mean what do American investors who do not own any non-American stocks and do not own a passport and could not find Switzerland on a map and who think that anyone who speaks any language other than English is a bit weird have to worry about? Not a lot, other than the contagion spreading back into the US banking system and causing a meltdown,” he told MarketWatch.

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  • Voyager, Neurocrine ink gene-therapy deal

    Voyager, Neurocrine ink gene-therapy deal

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    Shares of Voyager Therapeutics Inc.
    VYGR,
    +10.65%
    rallied 35% in premarket trading on Monday after the company announced a deal with Neurocrine Biosciences Inc.
    NBIX,
    +0.06%
    to develop and commercialize gene therapies, including one that is being tested as a treatment for Parkinson’s disease. Neurocrine will make a $175 million upfront payment, including a $39 million equity investment, with up to $1.5 billion in potential milestones. Voyager’s stock has soared 148.7% over the past year, while the S&P 500
    SPX,
    +2.28%
    is down 17.0%.

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  • Elon Musk just sold $3.6 billion more in Tesla stock as Twitter turmoil continues

    Elon Musk just sold $3.6 billion more in Tesla stock as Twitter turmoil continues

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    Tesla Inc. Chief Executive Elon Musk just sold nearly $3.6 billion more of the company’s stock, according to a filing with the Securities and Exchange Commission released late Wednesday.

    Musk sold just under 22 million shares worth $3.58 billion in aggregate from Dec. 12 to Dec. 14, the latest filing shows. Tesla shares TSLA fell in all three of those trading sessions, dropping 12.4% in total over the three-day stretch to finish Wednesday at $156.80.

    This…

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  • Microsoft to bring ‘Call of Duty’ to Nintendo if Activision merger approved

    Microsoft to bring ‘Call of Duty’ to Nintendo if Activision merger approved

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    Microsoft Corp. said late Tuesday it has made a “10-year commitment” to bring the massively popular “Call of Duty” videogame series to Nintendo Co. consoles, when — and if — its merger with Activision Blizzard Inc. is completed.

    In a tweet late Tuesday night, Xbox head Phil Spencer announced the deal. “Microsoft is committed to helping bring more games to more people – however they choose to play,” he said, adding: “I’m also pleased to confirm that Microsoft has committed to continue to offer Call of Duty on @Steam simultaneously to Xbox after we have closed the merger with Activision Blizzard King.”

    Microsoft is awaiting federal approval of its $68.7 billion acquisition of Activision.

    A deal to share one of Activision’s
    ATVI,
    -0.29%
    most lucrative videogame titles could appease some antitrust concerns from regulators. Spencer told Bloomberg News that a similar offer had been extended to rival Sony Corp.
    SONY,
    -2.62%
    for its PlayStation consoles, but said that offer had so far been rebuffed.

    A “Call of Duty” title has not been available on Nintendo since 2013.

    In an interview with the Washington Post published Tuesday, Spencer said there was no Nintendo “Call of Duty” release date set yet, but that if the merger closes — it has a June 2023 target date — future “Call of Duty” games would be released for all platforms at once. “Once we get into the rhythm of this, our plan would be that when [a Call of Duty game] launches on PlayStation, Xbox, and PC, that it would also be available on Nintendo at the same time,” he told the Post.

    Nintendo shares
    7974,
    +0.33%
    rose slightly in Tokyo trading following the news. Microsoft shares
    MSFT,
    -2.03%
    fell Monday, and are down 17% year to date, compared to the S&P 500’s
    SPX,
    -1.44%
    17% decline this year.

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  • Elon Musk on the hook to pay more than $200 million to 3 fired Twitter execs

    Elon Musk on the hook to pay more than $200 million to 3 fired Twitter execs

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    This story was updated with a more current tally of shares from Twitter’s most recent proxy statement. 

    When Twitter Inc.’s top executives walked out of its San Francisco headquarters Thursday, they may as well have been carrying bags of Elon Musk’s cash.

    Chief Executive Parag Agrawal, Chief Financial Officer Ned Segal and Vijaya Gadde, Twitter’s head of legal policy, received a “golden parachute” clause in Twitter’s
    TWTR,
    +0.66%
    merger with Musk’s X Holdings. Musk reportedly fired all three Thursday evening upon officially taking control of the social network in a $44 billion acquisition, and will be obligated to give more than $204 million of it to those three, according to Twitter’s filing with the Securities and Exchange Commission.

    Read more: Elon Musk completes Twitter purchase, fires CEO and other top execs: reports

    Agrawal, Segal and Gadde own roughly 1.2 million shares of Twitter, more than half of that a $34.8 million stake owned by Gadde. The trio’s roughly $65 million stake would be purchased by Musk like any other shareholder’s stock.

    Additionally, a clause in the merger agreement provided accelerated vesting of promised future stock compensation — and that’s where the biggest chunk of money comes in. The “Golden Parachute Compensation” clause in Twitter’s SEC filing — which was the deal approved by Twitter shareholders — shows the trio would automatically vest stock worth $119.6 million as severance if terminated, with the largest payout there going to Agrawal at $56 million.

    They’re also entitled to a year’s salary and health benefits. In 2021, Agrawal had a base pay of $623,000, while Segal and Gadde’s base pay was $600,000 each.

    In total, Gadde is set to walk away from Twitter with the biggest haul: Nearly $74 million. Agrawal and Segal aren’t far behind her, though, at roughly $65 million and $66 million, respectively.

    Twitter shares have rallied 26% over the past month and closed Thursday at $53.70, close to the $54.20 share price Musk, who’s also CEO of Tesla Inc.
    TSLA,
    +0.20%
    and the world’s wealthiest individual, agreed to pay in April.

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  • Elon Musk completes Twitter purchase, fires CEO and other top execs: reports

    Elon Musk completes Twitter purchase, fires CEO and other top execs: reports

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    Twitter Inc. is now owned by Elon Musk, with multiple media outlets reporting Thursday night that the long-anticipated sale had officially closed.

    The Wall Street Journal, Washington Post and others reported, based on unnamed sources, that the top executives of Twitter
    TWTR,
    +0.66%
    were fired and escorted from the building, including Chief Executive Parag Agrawal, Chief Financial Officer Ned Segal and Vijaya Gadde, head of legal policy, trust and safety.

    Musk himself is expected to assume the role of interim CEO, though in the longer term may appoint someone else, Bloomberg reported early Friday, citing unnamed sources. Twitter did not respond to a request by the publication for comment.

    Also read: Elon Musk on the hook to pay more than $200 million to 3 fired Twitter execs

    The acquisition ends months of legal wrangling after Musk, the billionaire CEO of Tesla Inc.
    TSLA,
    +0.20%
    and SpaceX and a frequent Twitter user, offered to buy Twitter in April. After reaching an agreement with Twitter’s board to buy the social media company for $44 billion, Musk tried to back out of the deal and Twitter sued him. He faced a Friday deadline to complete the deal or face trial.

    In a tweet late Thursday night, Musk said only: “the bird is freed.”

    Opinion: Twitter stood up to Elon Musk and won, but will it feel like a win once he owns it?

    Thursday morning, Musk signaled a deal was imminent when he tweeted a statement aimed at assuring advertisers, some of whom might be concerned about his plans for content moderation. Musk has said one of his motivations for buying the platform is related to complaints about censorship, mostly from people who have been banned because they have violated Twitter’s terms of service.

    “Twitter obviously cannot become a free-for-all hellscape, where anything can be said with no consequences!” Musk said in his statement to advertisers Thursday.

    Twitter did not immediately return a request for comment late Thursday.

    The Bloomberg report added that Musk also plans to end lifetime bans for users, meaning former President Donald Trump could return to Twitter, though it’s unclear how soon that could happen, the source said.

    Twitter shares have rallied 26% over the past month, closing Thursday at $53.70, close to the $54.20 share price Musk agreed to pay in April.

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  • Twitter shares slump after report that the U.S. mulls national-security reviews for some of Elon Musk’s ventures

    Twitter shares slump after report that the U.S. mulls national-security reviews for some of Elon Musk’s ventures

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    Shares of Twitter plunged in premarket trade on Friday after a report Biden administration officials are considering subjecting some of Elon Musk’s ventures to national-security reviews.

    Twitter
    TWTR,
    +1.18%
    shares plunged 9% to $47.64 in premarket trade, below the $54.20 per share buyout price.

    Bloomberg News reported late Thursday that some U.S. officials have become concerned in recent weeks by Musk’s Russia-friendly tweets and his threat to cut off Starlink satellite internet service to Ukraine. The Tesla
    TSLA,
    -6.65%
    and SpaceX CEO’s pending $44 billion acquisition of Twitter has also reportedly drawn concerns because of its foreign investors, including a Saudi prince, Binance Holdings — a crypto exchange that was initially based in China — and Qatar’s sovereign wealth fund.

    Citing anonymous sources familiar with the matter, Bloomberg said discussions are still in the early stages and officials are trying to figure out what regulatory tools are available to them. One option could be a national-security review by the Committee on Foreign Investment in the United States, the report said.

    Separately, Bloomberg also reported late Thursday that Musk’s lawyers and bankers are preparing paperwork for the Twitter deal to be completed ahead of a Oct. 28 deadline, and that relations between Musk and Twitter have turned cordial rather than adversarial.

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  • Judge delays Twitter v. Elon Musk trial to allow deal to close

    Judge delays Twitter v. Elon Musk trial to allow deal to close

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    The judge in a legal battle between Twitter Inc.
    TWTR,
    -3.72%
    and Tesla Inc.
    TSLA,
    -1.11%
    Chief Executive Elon Musk on Thursday delayed their trial, previously set for Oct. 17, to give the sides time to close the $44 billion acquisition at the heart of the beef. Trial was set to begin Oct. 17 in Delaware Chancery Court, but Chancellor Kathaleen McCormick ruled Thursday afternoon that the two sides would have until Oct. 28 to close the transaction. If Musk has not closed on his deal to buy Twitter by then, a trial date will be set for November, the judge ruled.

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  • Elon Musk would lose 13.5 million Twitter followers if he scraps most spam accounts; Justin Bieber would lose 27.6 million, data finds

    Elon Musk would lose 13.5 million Twitter followers if he scraps most spam accounts; Justin Bieber would lose 27.6 million, data finds

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    Elon Musk would lose about 13.5 million Twitter followers, if he pushes through his plan to get rid of most spam accounts, according to data crunched by CodeClan, a Scottish digital skills academy.

    The Tesla Inc.
    TSLA,
    -3.84%
    CEO on Tuesday gave up a legal battle and agreed to pay $44 billion to take over the social-media company. Musk has said he wants less than 5% of Twitter
    TWTR,
    -2.35%
    accounts to be spam.

    But Musk’s losses pale in comparison with singer Justin Bieber, who would lose 27.6 million of his 114.2 million followers, according to the data.

    Britney Spears would lose the highest percentage of fake followers out of the top 20 with some 48% of her 55.8 million followers being classified as fakes.

    See also: Elon Musk says Twitter will eventually be part of ‘X, the everything app’

    Former President Barack Obama would lose 19.3 million of his 131.9 million followers, the data shows.

    Among other high profile names; Katy Perry has about 23.3 million fakes among her 108.9 million followers, or 21.4% of the total; Rihanna has about 26.5 million fakes, or 24.9% of her 106.5 million followers; Lady Gaga has 10.9 million fakes in her roster of 84.7 million followers, for 12.9% of the total; Kim Kardashian has about 14 million fakes, or 19.4% of her 72.4 million followers, and Ellen DeGeneres has about 24.4 million fakes, equal to 31.5% of her 77.5 million followers.

    See now: Elon Musk’s legal battle with Twitter may be over, but his war with the SEC continues

    In the world of politics, Indian Prime Minister Narendra Modi has about 17.5 million fakes in his 78.8 million followers, equal to 22.2% of the total.

    CNN Breaking News has about 7.7 million fakes, or 12.2% of its 63.1 million followers. Bill Gates has about 14.3 million fakes, or 24.2% of his 58.9 million followers. And NASA has some 14.7 million fakes, or 26.8% of its 57.1 million followers.

    Twitter shares were slightly lower premarket, while Tesla was down 1.1%.

    Shares of Digital World Acquisition Corp.
    DWAC,
    +0.03%    ,
    the special-purpose acquisition company, or SPAC, buying the company behind former President Donald Trump’s Truth Social social-media company, was slightly higher premarket after falling more than 5% Tuesday in the wake of the Musk/Twitter news.

    The SPAC has fallen 67% in the year to date, while the S&P 500
    SPX,
    -1.28%
    has fallen 20%.

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  • Twitter stock surges 22% after Elon Musk gives up bot battle and commits to $44 billion deal

    Twitter stock surges 22% after Elon Musk gives up bot battle and commits to $44 billion deal

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    Tesla Inc. Chief Executive Elon Musk now plans to close his proposed $44 billion deal for Twitter Inc., according to a Tuesday filing that arrived less than two weeks before a judge was scheduled to hear a case on the disputed acquisition.

    Musk’s lawyers sent a letter to Twitter’s management team indicating that he was proposing to move forward with the original acquisition terms late Monday, and that letter was released as a filing with the Securities and Exchange Commission Tuesday afternoon. A Twitter spokesperson later confirmed to MarketWatch that the company intended to proceed with the deal for $54.20 a share.

    Twitter
    TWTR,
    +22.24%
    shares jumped 22.2% to $52 in Tuesday’s session, after an hours-long trading halt that started after Bloomberg News first reported the move around noon Eastern time, suggesting a possible end to the legal saga between the two parties. The increase is the second best daily percentage gain on record for Twitter stock, behind only the 27.1% gain experienced when Musk disclosed his initial ownership stake in Twitter in April. Twitter was the best performing stock Tuesday in the S&P 500 index
    SPX,
    +3.06%    ,
    and is now up 20.3% on the year.

    The two sides have been locked in a legal battle for months, and a Delaware Chancery Court judge was expected to hear from both sides in a five-day trial slated to begin Oct. 17. The Wall Street Journal reported Tuesday that the Delaware judge asked the two sides to come up with a plan by the end of the day that could bring about an end to the litigation.

    “Musk could see the writing on the wall that he was going to lose the trial,” said Josh White, an assistant finance professor at Vanderbilt University, in an email to MarketWatch. “By doing this, he can save legal costs, time and ultimately losing in a very public trial.”

    See also: Here’s how Twitter’s users reacted to Musk agreeing to buy the platform

    Musk agreed in April to buy Twitter in a deal that valued the company at roughly $44 billion, but he later said that he was terminating the deal. The Tesla
    TSLA,
    +2.90%
    CEO cited concerns about bot activity on Twitter and said he believed the company’s management team wasn’t accurate in its public disclosures about the extent of spam activity on the platform.

    White noted that text messages released in conjunction with the case showed that Musk was aware of Twitter’s bot issue before going forward with his original deal offer, and he doubted that Musk would be able to show that “something really changed” after that point.

    “If he offered less than $54.20, Twitter might have proceeded with the trial, and he would be deposed,” White continued. “By offering the original price, he maximizes the chance that Twitter accepts and the trial ends. I expect Twitter’s board to accept the deal and for it to close rather quickly.”

    Wedbush analyst Daniel Ives agreed that the Tesla leader’s latest move marked a “clear sign that Musk recognized heading into Delaware Court that the chances of winning vs. Twitter board was highly unlikely and this $44 billion deal was going to be completed one way or another,” he wrote in a note to clients. “Being forced to do the deal after a long and ugly court battle in Delaware was not an ideal scenario and instead accepting this path and moving forward with the deal will save a massive legal headache.”

    Opinion: Twitter stood up to Elon Musk and won, but will it feel like a win once he owns it?

    Vanderbilt’s White noted that a deal at the original price would be a “big” win for Twitter shareholders.

    “The stock price of Snap
    SNAP,
    +8.42%
    and Twitter seemed to trade around the same price level before the offer,” he told MarketWatch. “Snap is now a ~$10 stock with a $17 billion market cap. So Twitter’s shareholders win by getting $54.20 rather than having the price drop to $10-20 per share.”

    Additionally, he deemed Delaware business law another winner: “This deal shows that even the richest man in the world cannot overcome well-written contracts enforced in a neutral and fair way by the Delaware courts.”

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  • Poshmark to be bought by South Korean internet company Naver in $1.2 billion deal

    Poshmark to be bought by South Korean internet company Naver in $1.2 billion deal

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    Online secondhand-fashion marketplace Poshmark Inc. has agreed to be bought by South Korean internet company Naver in a $1.2 billion deal, the companies announced Monday, a move that executives said would help both brands expand internationally.

    Shares of Poshmark
    POSH,
    -0.64%
    jumped 11.8% in after-hours trading on the news.

    Under the terms of the deal, Naver
    035420,
    -8.79%
    will acquire Poshmark’s outstanding shares for $17.90 in cash, representing a 15% upside to Poshmark’s Monday closing price of $15.57. The transaction is set to close by the first quarter of next year, pending Poshmark shareholders’ approval.

    Poshmark went public in late 2020, pricing shares at $42 a share, and ended its first day of trading at more than $100 a share, but has never approached those heights again. It last traded for more than the acquisition price Naver has agreed to pay late last year.

    For more: Five things to know about Poshmark

    In a statement, executives from both companies talked up the potential to combine Naver’s array of search, e-commerce, AI and social-media technology with Poshmark’s social and shopping platforms. Poshmark, the companies said, would also embark on a bigger international expansion strategy, including into other markets in Asia, in the “medium-term.”

    They also talked about the potential for the combined company to save around $30 million annually within two years after the deal’s closing through “rationalization of public company costs” and higher operating leverage, along with the potential for more than 20% yearly sales growth by harnessing Naver’s advertising resources.

    Naver, which runs large search and e-commerce platforms, said the move would broaden its e-commerce platform, bring younger users into the company’s fold and allow it to “capitalize on the global online fashion re-commerce and sustainable economy opportunity.”

    “Naver’s leading technology in search, AI recommendation and e-commerce tools will help power the next phase of Poshmark’s global growth,” Choi Soo-Yeon, Naver’s chief executive, said in a statement, which also said that Naver hosted a large number of digital content creators in Korea.

    Naver owns companies like Wattpad, a social-media platform, and runs Webtoon, a site for digital comics, along with a metaverse platform called Zepeto, and also has joint ownership of an internet service group in Japan. Naver said its online community in Korea consists of more than 36 million monthly users, who use its search engine and other services. 

    Poshmark Chief Executive Manish Chandra said the deal would also give Poshmark opportunities to grow. 

    “Longer term, as part of Naver, we will benefit from their financial resources, significant technology capabilities, and leading presence across Asia to expand our platform, elevate our product and user experiences, and enter new and large markets,” he said in the statement.  

    Naver said the acquisition would also help give it a bigger foothold in the U.S. And it said the deal would allow it to broaden the appeal of so-called live-stream shopping.

    “Live-stream shopping is a key driver of e-commerce in China and Korea (and increasingly in the U.S.) today, allowing shoppers to buy products in real-time through live video broadcasts, enabling greater insights and more clarity around purchasing decisions,” the statement said.

    Once the deal closes, Poshmark will be a standalone subsidiary of Naver, with the same management team, brand and headquarters in Redwood City, Calif., the companies revealed.

    At the close of Monday’s trading, shares of Poshmark were down around 9% year-to-date. The S&P 500 index
    SPX,
    +2.59%    ,
    by comparison, has slid 23% over that time.

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