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Chart: AOL Time Warner Stock Price

Could things get much messier for Martha Stewart? In addition to warding off suspicions of insider trading of ImClone Systems (IMCL) stock, America's homemaking queen now faces the specter of obstruction of justice charges from federal prosecutors.

The latest wrinkle: a Merrill Lynch sales assistant who disputes the reasons both Stewart and her broker give for selling the stock a day before bad news sent it reeling. That sale brought her less than $230,000. In return, the domestic diva has lost hundreds of millions on paper as the scandal has almost halved the value of Martha Stewart Living Omnimedia shares in recent weeks, to $10.40 on June 26.

The big question is whether the whiff of impropriety might now turn consumers away from the bedsheets and books that bear her name. Stewart has dismissed the various allegations as ridiculous and continues to ply the cocktail circuit and toss salads on TV as if nothing were wrong. But investors are clearly worried that America's arbiter of good things could become a symbol of bad behavior. Genentech (DNA) will take a $500 million charge against second-quarter earnings to cover damages that a Los Angeles jury ordered the biotech giant to pay the City of Hope cancer hospital. On June 24, the jury added $200 million in punitive damages to the $300.2 million in compensatory damages it had already levied against Genentech, after deciding that the company bilked City of Hope out of licensing revenue from a technology developed by the cancer center. The penalty won't break the bank for Genentech, which has $1 billion in cash. Genentech will appeal the verdict, a process that will probably take more than a year. Is FedEx (FDX) foreshadowing prolonged pain for the U.S. economy? Despite doubled profits in the fiscal fourth quarter, the shipping giant saw its stock price plunge 14%, to $48, on June 25. FedEx investors are concerned about the possibility of weak profits for the first quarter ending Aug. 31, and for the full year. The Memphis company said that it didn't expect an economic recovery until early next year. The reason: Its customers in the manufacturing, high-tech, and wholesale sectors have yet to ramp up delivery spending. Manufacturers represent 40% of FedEx' domestic express-delivery business. Meanwhile, FedEx' lower-cost ground-delivery operations saw volume increase 21% in the fourth quarter, a sign that its customers are remaining cost-conscious. UAL (UAL) is testing just how far the government will go to bail out the airline industry. The parent of United Airlines, the world's No. 2 carrier, asked the Air Transportation Stabilization Board on June 24 to guarantee $1.8 billion in loans. UAL ended the first quarter with $2.9 billion in cash, and it won pay cuts from its 11,000 salaried workers and 9,200 pilots totaling $950 million over three years. But the airline says it needs new loans so it can pay off $1 billion in debt due by early 2003, spend $500 million for spare parts and other capital gear, and cover losses of $5 million a day. So far, the board has backed loans for only one major carrier, America West Airlines. Northrop Grumman's (NOC) plan to acquire all of TRW (TRW) for $7 billion was dealt a blow when three other bidders emerged for the company's prized defense-electronics and space businesses. TRW may seek higher offers from the interested parties, which now include General Dynamics (GD), Raytheon (RTN), and BAE Systems (BAESY). TRW announced plans on June 18 to sell its aeronautical-systems unit to Goodrich for $1.5 billion. The company is considering a sale or spin-off of its third major business, auto parts. Northrop and partner Lockheed Martin meanwhile won an $11 billion contract to develop a new line of stealth ships and aircraft for the U.S. Coast Guard. Immunogen (IMGN) got a double dose of bad news on June 24 about its experimental cancer drugs. First, development partner GlaxoSmithKline (GSK) announced it would conduct no further clinical trials of Cambridge (Mass.)-based ImmunoGen's cantuzumab mertansine, an antibody that delivers chemotherapy directly to the heart of cancer cells. The reason wasn't given, and ImmunoGen says it will try to renegotiate its pact with Glaxo. Hours later, Genentech said it would delay human testing of a similar drug licensed from ImmunoGen until it had conducted more animal and lab tests. The dual announcements caused ImmunoGen's stock to drop 46% on June 24, to $2.15 a share. -- Supervalu (SVU) will take a charge of up to $21 million to account for inventory misstatements.

-- (PCLN) said it expected second-quarter earnings of 3 cents a share.

-- CMS Energy (CMS) has hired a law firm to review its energy-trading operations. Even before the WorldCom (WCOM) scandal, AOL Time Warner's (AOL) stock was a laggard. On June 26, it sank 11.49%, to $13.63, because, like WorldCom, it uses earnings before interest, taxes, depreciation, and amortization (EBITDA) as its preferred financial measure. Can it be long before media moguls ditch EBITDA?

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