The Smart Trader

by
Joe Expert

PricewaterhouseCoopers LLP is being sued for at least $1 billion as a result of alleged professional malpractice towards MF Global Holdings Ltd in 2011. PwC has come under fire as MF Global’s administrator identified the auditor’s consultancy as “flatly erroneous” in its recent bankruptcy plan. MF Global was a major global financial derivatives broker prior to its October 2011 downfall. The firm also provided over the counter products such as CFDs, FX and spread betting. Spread betters may recall SpreadEx.com’s acquisition of MF Global’s client list in early 2013 as the firm began to unwind.

by
Joe Expert

Facebook Inc. announced on Tuesday that it has reached a $2 billion agreement to buy Oculus VR, the maker of a virtual reality headset. The acquisition, coming hot on the heels of Facebook’s landmark $19 billion takeover of WhatsApp Inc. (Facebook buys WhatsApp..), marks its first foray into hardware products. The deal will be comprised of $400 million in cash and $1.6 billion worth of Facebook stock (equating to 23.1 million shares). In addition, a further $300 million cash and stock incentive could be earned on “the achievement of certain milestones”.

by
Joe Expert

The US Federal Reserve’s first meeting under the leadership of Janet Yellen has proceeded predominantly as expected. Yellen confirmed that the Fed intends to continue the process of ‘tapering’ its bond buying initiative. A further $10 billion will be shaved off monthly Fed bond purchases as forecast on this page (Wall Street simmers..) yesterday evening. This represents the third consecutive tightening of Fed stimulus efforts. Yellen also revealed a Fed decision to discard its original plan to use the unemployment rate as a benchmark for bumping interest rates. Outgoing Fed chair Ben Bernanke had previously stated that overnight borrowing costs would be increased once a 6.5% unemployment rate had been reached.

by
Joe Expert

US stocks performed well on Wall Street Tuesday ahead of Wednesday’s first Federal Reserve policymaking meeting under the stewardship of Janet Yellen. The Dow Jones gained almost 90 points while the S&P 500 climbed 0.72%. Major European and Asian markets also recorded gains amidst investor expectations of bullish Fed policy announcements. It is hoped that Yellen will address three main areas of concern for Wall Street investors:

by
Joe Expert

Chiquita Brands International and Irish tropical fruit company Fyffes announced a $526 million merger in a joint statement today. The all stock deal will establish the world’s largest banana company, creating a new entity called ChiquitaFyffes. The new firm will have 32,000 employees and will take in approximately $4.6 billion in annual revenue. Domiciled in Ireland, ChiquitaFyffes’ shares will be traded on the New York Stock Exchange upon the deal’s official finalization. Chiquita presently account for 22% of the global banana market, while Fyffes make up a further 7%. Thus ChiquitaFyffes’ 29% will see it surpass Dole Foods as global leader in banana distribution.