Verizon Begins Idearc Lawsuit and 4 Hot Stocks Buzzing Now

Citigroup, Inc. (NYSE:C) stated on Monday that its Q3 earnings saw a drop of a $4.7 billion loss concerning the joint venture brokerage business Morgan Stanley Smith Barney. Last month, Citigroup made an agreement to sell its part of the joint venture, starting with a 14 percent stake, to Morgan Stanley. Citigroup stated that when it was writing down the cost of the rest of its interest in the brokerage business. The loss was offset a bit by a boost in mortgage lending and buoyed by a capital markets rebounds. Citigroup is the the nation’s third-largest bank, and it reported a net income reaching $468 million, or 15 cents a share, on revenue of $14 billion, versus net income of $3.8 billion, or $1.23 a share, in the quarter a year earlier.

Sprint Nextel Corp. (NYSE:S) and SoftBank have entered into a series of definitive agreements beneath which SoftBank is to invest $20.1 billion in Sprint, $12.1 billion of which is to be distributed to Sprint stockholders and $8 billion is to be used for new capital to strengthen Sprint balance sheet. Through the transaction, nearly 55 percent of current Sprint shares will be exchanged for $7.30 per share in cash, and all other shares are to be converted into shares of a new publicly traded entity, New Sprint. After closing, SoftBank will own about 70 percent and Sprint equity holders are to own about 30 percent of the shares of New Sprint on a fully-diluted basis. The transaction was approved by both company’s boards, and completion of the transaction is subject to Sprint stockholder approval, customary regulatory approvals and the satisfaction or waiver of other closing conditions. The companies believed that the closing of the merger transaction will occur in mid-2013. SoftBank is to create a new U.S. subsidiary, New Sprint, which is to invest $3.1 billion in a newly issued Sprint convertible senior bond after the announcement. The convertible bond is to have a 7-year term and 1.0 percent coupon rate, and will be convertible, subject to regulatory approval, into Sprint common stock at $5.25 per share. Immediately before the merger, the bond is to be converted into Sprint shares, which will become a wholly-owned subsidiary of New Sprint. After Sprint stockholder and regulatory approval, and the satisfaction or waiver of the other closing conditions to the merger transaction, SoftBank will continue to capitalize New Sprint with $17 billion more, and it will effect a merger transaction in which New Sprint is to become a publicly-traded company and Sprint will survive as its wholly-owned subsidiary.

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Verizon Communications Inc. (NYSE:VZ will begin defending a $9.5 billion lawsuit today brought by creditors of former subsidiary Idearc Inc., which is the directory business that went bankrupt after it was spun off by Verizon. Creditors argue that Verizon was aware that the directory business was failing, and it engineered a spinoff transferring $2.4 billion in cash out of the subsidiary and saddled it with $9 billion in debt.

Cyclacel Pharmaceuticals, Inc. (NASDAQ:CYCC) will discuss new data from a continuing, multicenter, Phase 2 randomized trial of oral sapacitabine capsules, which is the company’s top product candidate, in older patients diagnosed with intermediate-2 or high-risk myelodysplastic syndromes, or MDS, after the failure of front-line hypomethylating agents, such as azacitidine, or Vidaza, and/or decitabine, or Dacogen. Recently, the data were discussed at two separate sessions at The Eighth Annual Hematologic Malignancies 2012 Conference scheduled to take place Oct 10 to 14, in Houston, Texas. The current median overall survival for all 63 patients in the Phase 2 study is 252 days or about 8 months. Median overall survival for 41 out of 63 patients with 10 percent or more blasts in their bone marrow is 274 days, or about 9 months.

Amazon.com Inc. (NASDAQ:AMZN) is in talks to purchase the company that supplies chips for its Kindle tablet computer, according to Israeli financial newspaper Calcalist, which may indicate a step forward in the smartphone sector. The report stated that any deal for the smartphone chip business of Texas Instruments Inc (NYSE:TI) would likely have a worth of billions of dollars and has the ability to make Amazon a direct rival to Apple Inc and Samsung Electronics Co Ltd, also designers of their own chips. “It would make sense, as the chip is a critical component and Amazon has an existing relationship with TI,” stated Ovum analyst Nick Dillon.

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