• Schwab in talks to buy TD Ameritrade - CNBC
    Reuters Videos

    Schwab in talks to buy TD Ameritrade - CNBC

    Big brokerage buyout reportedly in the making. CNBC reports Charles Schwab is in talks to buy TD Ameritrade. A deal would enable the combined companies to control a majority of the discount brokerage market with total assets of $5 trillion. Fox Business pegged the value of the deal at $26 billion, which would imply a 18% premium to Ameritrade's market valuation. Neither companies responded to Reuters' requests for comment. A deal could be seen as a response to the price wars that have disrupted the industry. Startups like Robinhood are quickly grabbing market share by eliminating commissions on stock trades. That prompted Schwab to scrap commissions on online trading of stocks, ETFs, and options. TD Ameritrade and other rivals quickly followed suit. Also pressuring the discount brokers: low interest rates. That reduces the amount they earn off customer balances. News of a potential deal drove TD Ameritrade shares up 25% at the market open Thursday. Schwab shares rose nearly 12%.

  • Schwab Nears Deal to Buy TD Ameritrade
    Bloomberg

    Schwab Nears Deal to Buy TD Ameritrade

    Nov.21 -- Charles Schwab Corp. is nearing a deal to buy TD Ameritrade Holding Corp, according to a person familiar with the matter, reshaping a beleaguered online brokerage sector that’s seen fierce competition from new entrants amid price pressure and alternative ways to invest for clients. Bloomberg's Annie Massa reports on "Bloomberg Markets."

  • Bill Gates Touts Benefits of Open Research in AI
    Bloomberg

    Bill Gates Touts Benefits of Open Research in AI

    Nov.21 -- Microsoft Corp. co-founder Bill Gates discussed protectionism in technological research around topics like artificial intelligence. Gates argued that open systems will inevitably win out over closed ones. He speaks with John Micklethwait at Bloomberg's New Economy Forum in Beijing.

  • Why NFL great Joe Theismann is trading risky stocks
    Yahoo Finance

    Why NFL great Joe Theismann is trading risky stocks

    Yahoo Finance talks investing with NFL great Joe Theismann.

  • Bloomberg

    Microsoft Delays Its AirPods Rival Until After the Key Holiday Season

    (Bloomberg) -- Microsoft Corp. delayed the launch of its Surface Earbuds, missing the 2019 holiday shopping season. The software giant is the latest company to stumble in a race to catch up with Apple Inc.’s popular AirPods.The Surface Earbuds will come out in spring 2020, not this year as previously planned. The announcement was made by Panos Panay, the company’s chief product officer, on Twitter.The wireless earbuds were announced earlier this year, and like AirPods, are cord free. The Microsoft version has a circular shape, integrates with a voice assistant and can be used to control Microsoft software like PowerPoint.At $249, the Surface Earbuds are priced the same as Apple’s new AirPods Pro, but the delay means Microsoft will be missing out on a key category this holiday season.Google has also been working to upgrade its wireless earbuds. That product will also be missing this holiday season. The company is aiming for a release in the spring at a price of $179.To contact the reporter on this story: Mark Gurman in San Francisco at mgurman1@bloomberg.netTo contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Alistair Barr, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    Regulators Warn Banks About Tech Risks During Goldman-Apple Flap

    (Bloomberg) -- Banks that use complex models for lending better be able to explain why some borrowers are granted credit and others aren’t, regulators said Thursday.Otherwise, one regulator at the Consumer Financial Protection Bureau warned, they’ll face an uphill climb when battling accusations of discriminatory lending. The subject has overshadowed the introduction of Goldman Sachs Group Inc.’s credit card for Apple Inc.“If you’re facing those allegations, the first step is to understand why the algorithm in the decision-making process led to two different outcomes for apparently similarly situated applicants,” Albert Chang, counsel in the bureau’s innovation office, said Thursday at an industry conference in Manhattan. “And if you don’t have that ability to explain the decisions, it’s awfully hard to rebut that allegation of discrimination.”Prominent Silicon Valley executives publicly complained this month about receiving significantly higher credit limits on their Goldman-backed Apple credit cards than their wives, despite having similar incomes and credit scores. That revived long-held concerns about algorithms illegally treating borrowers differently because of race, gender or other characteristics.The controversy, which continues to play out on Twitter as more borrowers allege bias by Goldman, has dogged the storied Wall Street institution and marred its foray into banking for the masses. The New York State Department of Financial Services launched an investigation, and for the first time in years the bank has become the subject of nightly news broadcasts.“There’s no gender bias in our process for extending credit,” Goldman Sachs Chief Executive Officer David Solomon told Bloomberg TV in an interview on Thursday from the New Economy Forum in Beijing.Firms have promoted the use of algorithms in lending decisions as an antidote to biased human underwriters. What’s more, lenders say, using complex models to process loan applications is quicker, cheaper and more efficient when pricing credit, and enables more people to borrow more money at better terms.But regulators who enforce fair-lending laws continue to push banks to address the risk that complex models may cement the kind of bias they are meant to stamp out.Carol Evans, an associate director in the Federal Reserve’s consumer and community affairs division, urged lenders to be more forthcoming with their overseers.Bankers shouldn’t have the attitude of, “‘I know you don’t understand our models, but trust us,’” Evans said. “I don’t think that’s worked well for financial services in the past.”To contact the reporter on this story: Shahien Nasiripour in New York at snasiripour1@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Dan Reichl, Steve DicksonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Jeffrey Gundlach Says ‘Mayor Pete Killed It’ at Democratic Debate
    Bloomberg

    Jeffrey Gundlach Says ‘Mayor Pete Killed It’ at Democratic Debate

    (Bloomberg) -- Count billionaire Jeffrey Gundlach among the finance-industry titans taking note of presidential candidate Pete Buttigieg.“Mayor Pete killed it tonight,” tweeted Gundlach, whose DoubleLine Capital oversees more than $140 billion, after Wednesday night’s Democratic debate.He joins fellow billionaire investors Paul Tudor Jones, Michael Novogratz and Blackstone Group Inc. Vice Chairman Tony James in showing support for -- or at least being impressed by -- the 37-year-old mayor of South Bend, Indiana. Novogratz, a former Goldman Sachs Group Inc. partner, has said he likes Buttigieg even if he’s skeptical he can win, and Jones, founder of Tudor Investment Corp., has called the candidate “my man.”Buttigieg, a former McKinsey & Co. consultant once considered a long-shot candidate, is the emerging front-runner in Iowa, the first caucus state, with a 7 percentage-point lead over the pack, according to RealClear Politics. He received high marks for his debate performance in Atlanta on Wednesday as scrutiny increased along with his poll numbers.A moderate candidate such as Buttigieg may prove more enticing than progressives such as Senators Elizabeth Warren and Bernie Sanders as Democratic voters seek a viable opponent to President Donald Trump in 2020, particularly among swing voters who will play a crucial role in the general election.Wall Street in particular has plenty of reason to be turned off by Democratic candidates on the far left. Sanders and Warren -- both of whom have spurned donations from private, large-dollar fundraisers -- have called for tighter bank regulations and higher taxes on the wealthy, and repeatedly attacked big financial firms and their executives, with billionaires Leon Cooperman and Lloyd Blankfein called out by name in a recent Warren campaign ad.Gundlach was among the few money managers to predict Trump’s victory in the 2016 election. These days, he frequently criticizes the president’s economic policies, such as driving up the federal deficit. Asked to elaborate on his post-debate tweet, Gundlach said it shouldn’t be read as a Buttigieg endorsement.“I have never endorsed a political candidate,” he said Thursday in an emailed statement. “I am not doing so now nor will I in the 2020 presidential race.”He has criticized the prospects for other Democratic candidates, including Warren, former Vice President Joe Biden, Senators Kamala Harris and Cory Booker, and former Massachusetts Governor Deval Patrick. Wednesday’s tweet was Gundlach’s second favorable one about Buttigieg this month, though the last was more equivocal.“Mayor Pete is very smart,” Gundlach wrote on Nov. 7. “His Hunger Games ‘let them kill each other’ strategy is perfect. Can you name a single policy Pete’s advocating?”(Updates with Gundlach comments in seventh, eighth paragraphs.)\--With assistance from Amanda Gordon and Sonali Basak.To contact the reporter on this story: John Gittelsohn in Los Angeles at johngitt@bloomberg.netTo contact the editors responsible for this story: Sam Mamudi at smamudi@bloomberg.net, Daniel Taub, Alan GoldsteinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Schwab’s Deal to Buy TD Ameritrade Boosts Billionaire Founders
    Bloomberg

    Schwab’s Deal to Buy TD Ameritrade Boosts Billionaire Founders

    (Bloomberg) -- Charles Schwab Corp.’s plan to buy TD Ameritrade Holding Corp. for $26 billion is proving a boon for the fortunes anchored by two of America’s biggest brokerages.TD Ameritrade founder Joe Ricketts is set to add $400 million to his $2.4 billion net worth after his firm’s shares rose 21% in Thursday. Charles Schwab’s $8.8 billion fortune will increase by about $500 million based on his company’s gains. The deal is worse news for Thomas Peterffy, chairman of rival Interactive Brokers Group Inc., whose net worth was down about $100 million at 11:50 a.m. in New York.The transaction could be announced as early as Thursday, according to a person familiar with the matter. It would create a firm with roughly $5 trillion in combined assets, consolidating an industry under pressure from a price war that escalated when Schwab last month announced plans to eliminate commissions for U.S. stocks, exchange traded funds and options.The combination may pose a threat to fund managers such as Vanguard Group Inc. and BlackRock Inc., according to Bill Capuzzi, chief executive officer of Apex Clearing, a custodian that focuses on fintech firms.“It signals Schwab is going to continue to lean really hard into the advisory side,” he said. “A gigantic percentage of the advisory world will be leveraging one firm for passive custody and clearing services.”For Schwab, the net worth gain may be particularly sweet. In an October interview, he criticized wealth taxes like those proposed by Democratic presidential candidates Bernie Sanders and Elizabeth Warren as a “negative reward for success.”Other winners from the potential acquisition include Toronto-Dominion Bank, which owns 43% of TD Ameritrade, and Canadian insurer Sun Life Financial Inc. with a 3.9% position as of Sept. 30. Generation Investment Management LLP, the firm co-founded by former U.S. Vice President Al Gore, owned a 2% stake in Schwab at the end of the third quarter.(Updates net worth totals in second paragraph, adds Apex CEO’s comment in fourth.)To contact the reporter on this story: Tom Metcalf in London at tmetcalf7@bloomberg.netTo contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, ;Michael J. Moore at mmoore55@bloomberg.net, Steven CrabillFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Schwab-Ameritrade Faces Tough Antitrust Scrutiny, Analysts Say
    Bloomberg

    Schwab-Ameritrade Faces Tough Antitrust Scrutiny, Analysts Say

    (Bloomberg) -- A potential acquisition of TD Ameritrade Holding Corp. by Charles Schwab Corp. may draw fierce antitrust scrutiny, analysts said.Shares of the two companies rallied on Thursday, with Schwab rising as much as 14% and TD Ameritrade jumping as much as 26%. Even with such a gain, TD Ameritrade shares would still fail to return to levels they’d traded at earlier this year, before a wave of commission cuts roiled the industry. Other companies in the space didn’t fare as well on Thursday, with E*Trade Financial Corp. tumbling as much as 10% as hopes for a deal for that company faded.Here’s a sample of some of the latest commentary:UBS, Brennan HawkenThe very large and surprising deal “carries a lot of execution risk,” particularly regarding legal and regulatory issues, Hawken warned in a note.Hurdles include the “size the combined entity would represent in the discount brokerage space,” even if regulators were to take into account full-service wealth management firms like Morgan Stanley and Bank of America Corp., he said. Schwab cutting commissions and then bidding for its “most hindered” competitor might also draw legal challenges and further anti-competitive scrutiny, Hawken said.Hawken added that E*Trade was “left out in the cold,” and appears vulnerable as it had begun to reflect an M&A premium and the Schwab-Ameritrade tie-up would reduce the number of potential buyers.BofA, Michael CarrierTD Ameritrade’s relationship with holder Toronto-Dominion Bank “creates some complications,” Carrier wrote, including “dis-synergies and a bit tougher regulatory approvals.”Carrier expects merger discussions and activity in the sector in the near term, which is likely to benefit online broker stocks. He sees the Schwab-Ameritrade deal making “strategic sense” as the two have similar business models, particularly regarding retail and registered investment adviser, or RIA, platforms, and TD Ameritrade lacks a permanent CEO.Most firms in the sector, including E*Trade, will likely conduct merger talks given the “pressures on the business, this transaction, game theory, as well as the attractive synergies and accretion,” he said. Shares of companies that get left out may face pressure.KBW, Kyle VoigtThe deal “makes strong strategic sense and provides room for revenue and cost synergies, but a key focus for investors will be the potential for antitrust hurdles,” KBW’s Voigt wrote.Schwab is the number one player in the RIA business, followed by Fidelity, he said, and may hold about half of the market share of RIA custody assets, while TD Ameritrade may have around 15% to 20%. He flagged E-Trade, Fidelity and larger bank brokers like BofA and JPMorgan Chase & Co. in the self-directed retail asset space.Voigt expected E*Trade might drop “meaningfully,” as TD Ameritrade and Schwab were the two most likely acquirers and the stock may have been the “most crowded long in the space, mostly on a takeout potential.”Cowen, Jaret Seiberg“We expect antitrust regulators will approve this deal though it could take until summer,” Seiberg wrote. He sees the biggest risks as “political push-back during the election and a bigger spotlight on payment for order flow.”He noted the deal would come as “intense competition is driving down costs for consumers without apparent harm to the fiscal health of the industry.” Though antitrust regulators “will ask lots of questions and demand significant analysis to ensure the merger does not disrupt this ideal state,” they’ll probably okay the transaction as they’ll have a hard time proving it will harm consumers.Cowen sees no risk of approval going past the 2021 inauguration and becoming an issue for a new administration if President Donald Trump doesn’t win. However, he added that it’s easy to see how the deal might get drawn into an “anti-big business campaign” among Democratic candidates including Senator Elizabeth Warren. “No company wants to become the target of political attacks especially from a potential new president,” he said.Vital Knowledge, Adam CrisafulliNews of Schwab potentially buying TD Ameritrade may weigh on some asset managers as the combined company would be able to exert even more pressure on industry fees, Crisafulli wrote.Bloomberg Intelligence, David Ritter“A sale to Schwab makes strategic sense for TD Ameritrade, but the reported price -- essentially the level before online brokers adopted free stock commissions in October -- indicates the industry’s difficult revenue outlook. TD Bank, owner of more than 40% of Ameritrade, likely endorsed the deal.”National Bank, Gabriel DechaineA Schwab deal to acquire TD Ameritrade may be helpful for Toronto-Dominion Bank’s long-term U.S. strategy, according to Dechaine.Toronto-Dominion may end up with 10% to 15% stake in the combined entity, assuming an “all-stock transaction and no additional deal twists,” he said in a note to clients.“Assuming a smaller stake in a bigger player situation, TD could have a more liquid asset that it could potentially sell to finance a future U.S. regional bank acquisition,” Dechaine said. “As such, it would make it easier for TD to make future acquisitions accretive.”\--With assistance from Doug Alexander and Joshua Fineman.To contact the reporter on this story: Felice Maranz in New York at fmaranz@bloomberg.netTo contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Divya BaljiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Schwab (SCHW) to Buy Ameritrade (AMTD)? Both Shares Higher
    Zacks

    Schwab (SCHW) to Buy Ameritrade (AMTD)? Both Shares Higher

    No dollar amount has been reported as of yet, although assets under management from such a merger would create roughly $5 TRILLION in assets under management.

  • Schwab Seizes on Industry Turmoil With Plan to Buy TD Ameritrade
    Bloomberg

    Schwab Seizes on Industry Turmoil With Plan to Buy TD Ameritrade

    (Bloomberg) -- First, Charles Schwab Corp. upended the retail brokerage business by cutting commissions to zero. Now, it’s seizing on the turmoil it unleashed to acquire one of its biggest rivals, TD Ameritrade Holding Corp.Just weeks after Schwab stunned competitors by letting customers trade stocks for free, the company is moving to tighten its grip on the industry with talks to acquire TD Ameritrade, according to a person familiar with the matter.The deal would give Schwab, America’s original discount broker, even more sway over the industry it pioneered nearly a half-century ago -- and an edge in the intensifying battle for ordinary investors’ dollars, and the investment adviser business. The tie-up would result in a $5 trillion titan, but analysts say it could attract antitrust scrutiny.“An acquisition of TD Ameritrade would expand Schwab’s roster of active traders and solidify its leading position serving independent advisers,” said David Ritter, a financials analyst with Bloomberg Intelligence.A transaction could be announced as early as Thursday, the person said, asking not to be identified because the discussions are private. The companies didn’t immediately respond to emails and phone calls seeking comment.TD Ameritrade jumped about 20% at 10:33 a.m. in New York trading, the most since 2008. Schwab gained 8.1% after earlier rising as much as 14%.Shares of E*Trade Financial Corp., which analysts have speculated TD Ameritrade might want to buy, fell 9%. A deal between its two rivals could leave smaller brokerage E*Trade contending with a more formidable competitor than ever.Schwab’s move to zero commissions forced other brokerages to follow suit and triggered a slump in the shares of firms, with TD Ameritrade among the hardest hit. It swept away a revenue stream and rekindled speculation that online brokerages might have to cut deals to survive the increased industry pressure.TD Ameritrade has relied more on commissions than some competitors, drawing 36% of its net revenue from commissions in 2018, compared to 7% at Schwab.For founder Charles Schwab, ending commissions has been a longtime goal.“I hated commissions,” Schwab said at the Impact 2019 conference in San Diego. “I hated them then. I hate ’em now. I took ’em away.”Schwab had also hinted he was open to deal-making.“I don’t know whether we’ll be successful in that pursuit, but in the industry you’re going to see more consolidation, more firms getting together,” he in an interview with Bloomberg Radio in October. “You just have to have that scale and volume. So we’re prepared to do it if the opportunity arises. If not we’re perfectly happy to go it alone.”A deal between the two companies could face anti-trust scrutiny, Keefe, Bruyette & Woods analyst Kyle Voigt wrote in a client note Thursday.Schwab and TD Ameritrade are both top custody service providers to independent financial advisers, which could give authorities pause. Voigt estimates Schwab has about a 50% market share of registered investment adviser custody assets, while TD Ameritrade may have up to 20%.An acquisition would come at a time of transition for TD Ameritrade. The Omaha-based brokerage said in a surprise announcement in July that Chief Executive Officer Tim Hockey would leave no later than the end of February 2020, rekindling questions of whether it would pursue a deal. Hockey denied that his departure had anything to do with a potential deal at the time. Toronto-Dominion Bank, Canada’s second-largest lender by assets, owns a 43% stake in TD Ameritrade.Todd Rosenbluth, director of ETF research at CFRA Research, said that a tie-up of the two firms could help address the burn of zero commissions with increased scale.“It would reduce the likelihood that investors bounce around,” he said. “They’d have a go-to destination.”Rosenbluth added that the same principle would apply for independent advisers, who increasingly choose between the two firms for clearing and trading services.“There’s scale benefits for them to provide,” he said.\--With assistance from Doug Alexander and Felice Maranz.To contact the reporters on this story: Annie Massa in New York at amassa12@bloomberg.net;Matthew Monks in New York at mmonks1@bloomberg.netTo contact the editors responsible for this story: Sam Mamudi at smamudi@bloomberg.net, Alan MirabellaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Charles Schwab Takes Charge in Brave New Zero-Fee World
    Bloomberg

    Charles Schwab Takes Charge in Brave New Zero-Fee World

    (Bloomberg Opinion) -- You have to hand it to Charles Schwab Corp. As the market leader in the online brokerage industry, the company seems to have realized the inevitable endgame of zero fees and consolidation and decided that it really ought to get on with it.Schwab, just seven weeks after rocking Wall Street by announcing plans to eliminate commissions for U.S. stocks, exchange-traded funds and options, is now set to buy rival TD Ameritrade Holding Corp. for $26 billion, according to reports Thursday. The combined company would have an impressive $5 trillion of assets and be better equipped to step forward into this new, no-fee world than competitors such as E*Trade Financial Corp. and Interactive Brokers Group Inc. The concept of a first-mover advantage usually applies to marketing, but it’s a relevant way to think about Schwab’s strategy, too. By staying ahead of the competition, Schwab is reshaping the discount brokerage space on its terms rather than waiting to react to any changes. Bloomberg News’s Annie Massa smartly broke down the various brokerage companies’ commissions as a percentage of net revenue in 2018, which makes it obvious why Schwab chose to take the plunge toward zero fees: It stands to reason that Schwab’s calculus went something like this:Yes, our stock price will take a big hit when we announce that we’re eliminating commissions (it did, dropping to the lowest since 2016 last month). But the short-term pain will be worth it because our rivals will have no choice but to follow suit (as they did within days). Because they depend on fees much more than we do, investors should sell our competitors’ shares to a greater extent (this happened, too).  That will put us in a position to more cheaply execute the next phase of our plan, which is to grow. (It’s possible Schwab already had this deal in mind after TD Ameritrade announced in July that Chief Executive Officer Tim Hockey would leave by the end of February 2020.)Investors expressed approval of Schwab’s decision, lifting its shares as much as 13.9% on Thursday to the highest in more than a year. It’s not as if purchasing TD Ameritrade will solve all that ails the company and the online brokerage industry. But, like the consolidation in the mutual-fund space, it ensures survival. And in an era of rapid technological change on Wall Street, living to see another day and having the size and scope to keep pace with advancements is critically important. What’s next for Schwab? My Bloomberg Opinion colleague Nir Kaissar posited last month that the only option seems to be a more urgent push into financial advisory services. That will most likely be more of a grind for the company compared with the big splashes of the past two months. Schwab is competing with other market stalwarts like Fidelity Investments and Vanguard Group Inc., which are more difficult to push around than its discount broker rivals.Still, even if this is the last big move for now from Schwab, it has been a whirlwind couple of months. In two sweeping moves, the company has radically reshaped an industry and positioned itself to remain the market leader for the foreseeable future.To contact the author of this story: Brian Chappatta at bchappatta1@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Economic Data Deluge
    Zacks

    Economic Data Deluge

    Economic Data Deluge

  • Bloomberg

    PayPal Slips as Wall Street Questions Benefits of Honey Deal

    (Bloomberg) -- PayPal Holdings Inc. fell as much as 1.9% early Thursday after the payments company said it will acquire online coupon site Honey Science Corp. for about $4 billion, its largest-ever acquisition. Some analysts praised the deal’s strategy and growth potential, but others flagged the steep price and wondered whether Honey was the best M&A target for PayPal.Here’s a sample of the latest commentary:SunTrust, Andrew JeffreyJeffrey in a note recommended that investors stay on the sidelines as “this is not the deal PayPal needs to secure its position among premium valued network stocks.”Instead, SunTrust views Honey as a “sort of ‘shoot-the-moon’ attempt to more deeply entrench PayPal in the consumer e-commerce experience while also bolstering its merchant value proposition. Unfortunately for investors, the company is paying a large premium, in our opinion, for an unproven solution which does little to advance its ability to monetize beyond e-commerce.”Though PayPal can probably “elegantly integrate Honey into its core app and Venmo,” it may not “significantly advance the company’s market share amid rising competition,” he said. The deal also “does nothing to extend PayPal’s physical world reach, where 85%-plus of all transaction volume occurs.” Jeffrey did flag one positive: Honey is a small acquisition relative to PayPal’s market cap, which may limit downside risk. He rates shares hold, with a price target of $105.Raymond James, John Davis“While the strategic rationale makes a great deal of sense as it touches both the consumer and merchant side of PayPal’s platform and the cross sell opportunities are significant, it certainly didn’t come cheap,” Davis wrote. “Any way you slice it, $4 billion is a lot to pay for a company making little to no money.” Rates shares outperform, with a target price of $122.MoffettNathanson, Lisa EllisThe acquisition is “strategically attractive” for PayPal, as it’s imperative for the firm to strengthen its network by enhancing merchant and consumer value propositions as the “wallet wars” wage on, Ellis wrote in a note.Buying Honey is “well aligned with this critical strategic priority,” as Honey’s tools will strengthen PayPal’s suite of merchant services while integrating Honey’s services into PayPal and Venmo apps will boost consumer engagement, she said.Ellis views the $4 billion price as “consistent with comps for other small, high growth firms in payments and tech,” like PayPal’s iZettle deal. She rates shares buy, with a target price of $135.BofA, Jason KupferbergKupferberg views the deal as “strategically compelling” as PayPal can leverage the high-growth asset to “generate meaningful revenue synergies over time.” That’s even as the $4 billion value “represents a steep revenue multiple,” he said.The purchase also “represents a new breed of acquisition,” he added, as PayPal has in the past mostly acquired payments companies but now seeks to go “deeper into the e-commerce ecosystem by moving up to the front-end of the shopping experience as opposed to being on the back-end at checkout.” He flagged that Honey is working with 30,000 merchants including Expedia, Macy’s, Priceline and Sephora.Kupferberg expects PayPal will update its outlook on its fourth-quarter earnings call in January to include Honey. He doesn’t see the proposed deal changing the company’s capital allocation policy, as PayPal “has the balance sheet flexibility for continued share repurchases and additional M&A.” Keeps buy rating, target $127.(Updates share trading in first paragraph.)To contact the reporter on this story: Felice Maranz in New York at fmaranz@bloomberg.netTo contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Steven Fromm, Janet FreundFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • HP (HPQ) to Post Q4 Earnings: What's in Store for the Stock?
    Zacks

    HP (HPQ) to Post Q4 Earnings: What's in Store for the Stock?

    HP's (HPQ) fourth-quarter fiscal 2019 results are likely to reflect high demand in the commercial PC market. However, weakness in the Printing business might have posed a threat to the stock.

  • The Zacks Analyst Blog Highlights: Apple, Comcast, NVIDIA, GlaxoSmithKline and Global Payments
    Zacks

    The Zacks Analyst Blog Highlights: Apple, Comcast, NVIDIA, GlaxoSmithKline and Global Payments

    The Zacks Analyst Blog Highlights: Apple, Comcast, NVIDIA, GlaxoSmithKline and Global Payments

  • VMware (VMW) to Report Q3 Earnings: What's in the Cards?
    Zacks

    VMware (VMW) to Report Q3 Earnings: What's in the Cards?

    VMware's (VMW) third-quarter fiscal 2020 results are expected to reflect continued enterprise deal wins, portfolio strength and partnerships with the likes of AWS and IBM.

  • PayPal Acquires Honey Science, Boosts E-commerce Presence
    Zacks

    PayPal Acquires Honey Science, Boosts E-commerce Presence

    PayPal Holdings (PYPL) acquires a private e-commerce company, Honey Science, for approximately $4 billion.

  • Investing.com

    StockBeat: AMD Slumps on Downgrade as Analyst Warns of Profit-Taking Ahead

    Investing.com - Advanced Micro Devices (NASDAQ:AMD) has racked up impressive gains this year. Before Thursday, shares were up more than 120%. But one Wall Street analyst downgraded AMD Thursday and warned that investors are likely to cash in on the chipmaker's rally in the year ahead.

  • 90-Day US License Extension to Boost Chip Stocks: 5 Picks
    Zacks

    90-Day US License Extension to Boost Chip Stocks: 5 Picks

    Department of Commerce grants 90-day license extension to U.S. firms, allowing them to sell non-sensitive products to Huawei.