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BREAKFAST WITH THE FOOL
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J.P. Morgan (NYSE: JPM) announced the resignation of CFO Peter Hancock after only 14 months on the job. According to the company, he's leaving to "pursue entrepreneurial interests." The departure spurs further speculation that the nation's fifth-largest bank is a potential takeover target. Chief Administrative Officer Thomas Ketchum will assume Hancock's duties effective immediately.
Goldman has been searching for ways to develop its market-making capabilities. The acquisition gives the company an industry presence in executing stock orders on exchange floors, the Nasdaq, and the options market. It also provides market traction in executing trades for brokers and independent traders.
In the past, Goldman has focused on institutional clients -- such as mutual funds and pensions -- and steered away from smaller investors. However, retail investors have an increased presence in the market these days due to the Internet and the evolution of online trading. Large financial institutions understand the direction of securities trading and are seeking ways to increase market-making capabilities.
Speculation about a possible deal between Charles Schwab (NYSE: SCH) and Goldman had circulated at one point. Schwab is the top discount broker, and its market-making unit is the second largest on the Nasdaq. The investment bank also held discussions with market maker Herzog Heine, which Merrill Lynch (NYSE: MER) purchased for nearly $1 billion in June.
Spear, Leeds & Kellogg is the fourth-largest market maker of Nasdaq stocks. It has a strong client list composed of hedge funds and day traders, something that Goldman doesn't. According to The Wall Street Journal, it earned $845 million on $2.7 billion in revenues for the nine months ended June 30.
Specialties chemical maker and fuel seller Cabot Corp. (NYSE: CBT) announced plans for a share buyback. The company's board of directors has authorized the repurchase of up to 10 million shares, or about 15% of its outstanding shares. Chairman and CEO Samuel Bodman indicated the move is a continuation of the company's strategy to increase earnings per share by improving operating results and reducing the outstanding share base.
According to an article in Monday's edition of The Wall Street Journal, Hewlett-Packard (NYSE: HWP) is the leading candidate to acquire the consulting arm of PricewaterhouseCoopers. The deal is reportedly worth between $17 billion and $18 billion, but still four to six weeks away. The acquisition would improve H-P's services that help clients choose large computer systems.
The maker of the Zip storage drive Iomega Corp. (NYSE: IOM) announced its board of directors had approved a share buyback of up to $150 million in common stock and the redemption of outstanding notes. The company indicated the share repurchase is an attempt to increase the investment value of the stock, which has increased 30% this year.
Albertson's Inc. (NYSE: ABS) will have to compensate up to 150,000 former and current employees for back pay. The reimbursement results from the settlement of eight class-action lawsuits filed in 1997 by United Food and Commercial Workers. The settlement was approved Friday by a federal judge.
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