Archive for December, 2009

WaMu says tax refund may double, shares soar (Reuters)

Thursday, December 31st, 2009 | Finance News

WILMINGTON, Delaware (Reuters) –
Washington Mutual Inc said it could receive an additional $2.6 billion in tax refunds due to a recently enacted law, sending shares of the bankrupt bank holding company soaring on Thursday.

The added money could also help resolve various legal disputes surrounding the company's collapse last year, one analyst said.

Washington Mutual could receive the additional refund following the enactment in November of a law that permits net operating losses to be carried back for five years, from two years previously. That change would double the company's expected refund, according to a court filing on Wednesday.

The company's preferred shares (WAMPQ.PK) rocketed nearly 50 percent to $59.48 while its common stock (WAMUQ.PK) rose about 11 percent to 13.71 cents, in pink sheet trading.

One analyst said the refund could clear the way for a settlement of the bankruptcy case, which has been bogged down in disputes over claims to company's assets.

"It could be one of the main mechanisms of fostering a settlement. The apportionment of the refund could make all the sides happy," said Kevin Starke, senior vice president at CRT Capital Group in Stamford, Connecticut.

The company's main asset is a deposit of about $4 billion that is also claimed by JPMorgan Chase & Co Inc (JPM.N), which bought Washington Mutual's failed bank operations from a government agency for $1.9 billion last year.

JPMorgan also has said it has a claim on some of Washington Mutual's tax refunds, which until the law change were estimated at up to $3 billion. The refunds and deposit are the company's largest assets.

Earlier this month, an office within the U.S. Trustee asked Washington Mutual to provide a list of its shareholders so it could survey them for their interest in serving on an official committee representing equity holders.

Shareholders are generally the last creditors to receive a distribution and such a committee is usually opposed by the U.S. Trustee unless shareholders can prove they can reasonably expect a distribution after all creditors have been paid.

Washington Mutual said in its operating report for November it had $8.3 billion of liabilities.

Washington Mutual and the U.S. Trustee's office could not be immediately reached for comment.

The case is In re Washington Mutual Inc, U.S. Bankruptcy Court, District of Delaware (Wilmington), No. 08-12229.

(Reporting by Tom Hals; Editing by Tim Dobbyn)

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Electronics Led Jump in Online Holiday Shopping (NewsFactor)

Thursday, December 31st, 2009 | Finance News

More customers chose to point and click rather than park and swipe this Christmas season, with a five percent increase in online shopping over the same period last year, a study by the Internet marketing firm comScore says. By comparison, in-store retail shopping grew only 3.6 percent, according to credit-card spending tracked by Mastercard Advisor's' Spending Pulse.

"Overall this year, we have seen increasing stability in spending, as opposed to the free fall of 2008," noted Michael McNamara, vice president of research and analysis for SpendingPulse.

Cyber Monday A Success

Cyber Monday, the day after the Thanksgiving weekend when online retailers usually offer their best deals and, often, free shipping, raked in $885 million, up five percent from last year's $834 million.

A significant share of the online boost was in electronics sales, which grew by slightly more than 20 percent, with jewelry and watches also producing solid sales. Overall, an estimated $27 billion was spent online.

Steve Koenig, director of industry analysis for the Consumer Electronics Association, attributed the sales boost to better marketing and promotion by retailers.

"Sellers are trying different things other than just the usual loss-leader approach," Koenig said. "They have used a number of market plays old and new to coax consumers to open their wallets, and the data we have so far suggests they have been successful."

One such successful tactic, Koenig said, is bundling, or selling multiple, related products at one price. For example, he said Best Buy offered a Hewlett-Packard PC, monitor, notebook and netbook, plus a wireless router with home installation for about $1,200.

But he said while unit sales climbed this year, the revenue generated fell because of the abundance of lower-priced items.

"There were fewer large-screen TVs, but more midsize models in the 20- to 30-inch range sold," he said. "I also think there is some trading down going on. Instead of buying name brands, people are buying private labels such as the Insignia brand at Best Buy, which can deliver some savings to the consumer."

During the period from Black Friday, the day after Thanksgiving, to Christmas, online spending was up 3.5 percent from 2008, with the data adjusted for an additional shopping day.

Last year, overall online spending dropped three percent.

The data was gathered from a panel of shoppers who agreed to have their spending habits tracked by the marketing company from Nov. 1 through Christmas.

While the data suggest good news about the economic recovery, comScore cautions that while more people appear to have shopped online this year, the average amount they spent was less than last year.

"Online sales growth this year was driven by a continued increase in the number of people buying online, but consumers' economic challenges resulted in a slight decline versus last year in the amount spent per buyer," said comScore chairman Gian Fulgoni. "The season featured a strong start as a result of early retailer promotions and a very strong finish helped by the snowstorms that occurred the weekend of Dec 19-20."

Fulgoni also cited the extension of free shipping later in the season and retailers' use of social-networking tools.

Amazon Most Satisfying

Another study of online shoppers by ForeSee results found that Amazon.com led e-retailers in customer satisfaction, with 87 percent of respondents expressing no regrets about their transactions with the company. That's a four percent jump from last year's rating and a new benchmark for the study.

Overall, e-customer satisfaction with the top 40 retail sites by sales volume was up seven percent from last year.

Increases in satisfaction of 10 percent or more compared to last year were reported by customers who ordered from Macy's, Sony Style, The Gap, The Home Shopping Network, and Overstock.com.

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Wells Fargo grants $25 million in stock bonuses to top execs (Reuters)

Thursday, December 31st, 2009 | Finance News

NEW YORK (Reuters) –
Wells Fargo & Co (WFC.N) said on Thursday it gave Chief Executive John Stumpf and three other top executives stock payouts worth a total of about $25 million, but it said none of these executives will receive a cash bonus for 2009.

Stumpf received 379,600 shares, valued at about $10 million. Chief Financial Officer Howard Atkins, wholesale banking head Dave Hoyt and home and consumer finance head Mark Oman each received 189,800 shares, worth about $5 million.

The stock payouts will vest after three years and only if the San Francisco-based bank meets certain performance goals, the bank said in a statement. The executives will forfeit the payouts if they leave the company for a competitor and they must hold a portion of all their shares for as long as they are employed by Wells Fargo, according to the statement.

Wells Fargo's move follows that of Goldman Sachs Group (GS.N), which earlier this month said it would pay its top managers their 2009 bonuses in stock rather than cash.

Morgan Stanley (MS.N) also is considering proposals to align pay with long-term performance, through measures like awarding compensation based in part on the bank's share performance relative to peers, the Wall Street Journal reported on Tuesday.

U.S. banks broadly are seeking to deflect outrage over bonuses, which have been a hot-button issue since the U.S. government handed out billions of dollars in bailout money to shore up banks during the financial crisis.

Wells Fargo, the fourth-largest U.S. bank by assets, earlier this month returned the $25 billion it received in October 2008 under the government's Troubled Asset Relief Program.

But some bank experts have said that returning government funds and increasing stock-based compensation will not necessarily end public outcry over bankers' large bonuses. If banks including Wells Fargo continue to rebound from the financial crisis, their shares -- and the executives' payouts -- could surge.

Shares in Wells Fargo have recovered from a low of $7.80 at the height of the financial crisis in March but they have fallen almost 8 percent from $29.48 at the start of the year.

Wells Fargo shares were up 1.4 percent, or 38 cents at $27.20 in midday trading on the New York Stock Exchange.

(Reporting by Elinor Comlay; Editing by Tim Dobbyn and Gunna Dickson)

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