General Electric slashes quarterly dividend ahead of restructuring

General Electric will radically shrink to focus on aviation, power and healthcare, betting on sectors it thinks it can make profits in, as the most famous US conglomerate tries to revive its share price after a decade and a half of stagnation.

The 125-year-old company cut its dividend and profit outlook in half as it begins the transition, in a widely expected plan unveiled on Monday by new chief executive John Flannery in New York.

GE shares fell 6 per cent to $19.22, its lowest in more than five years, valuing the entire company at about $168bn, as investors worried how the slimmed-down company would generate cash to justify its stock valuation.

“By the numbers, we see a core operating performance that is below plan, and, currently, a consensus expectations curve that we think remains too high,” said JPMorgan analyst Stephen Tusa.

GE is the worst-performing Dow component this year, down 35 per cent by Friday’s close. GE stock has effectively been dead money since September 2001, when recently retired chief executive Jeff Immelt took over, posting a negative total return even after reinvesting its juicy dividends.

Mr Flannery, who took over as CEO on 1 August, said he was “looking for the soul of the company again” and would focus on “restoring the oxygen of cash and earnings to the company.”

The transition likely means the sale of $20bn of assets. GE will jettison businesses with “a very dispassionate eye,” Flannery said, keeping only units that offer growth, a leading market position and a large installed base.

That could mean exiting businesses like lighting, transportation and oil and gas, closing factories around the globe, analysts said.

GE also plans to cut 25 per cent of corporate staff at its Boston headquarters. It has already started shedding jobs at its software business.

The dividend cut, only the third in the company’s 125-year history and the first not in a broader financial crisis, is expected to save about $4bn in cash annually.

“This dividend cut will be a major disappointment to GE’s (roughly 40 per cent) retail shareholder base,” said RBC Capital Markets analyst Deane Dray.

The cut will save GE $4.16bn in payouts, the eighth biggest dividend cut in history among S&P 500 companies, according to Howard Silverblatt, senior index analyst of S&P Dow Jones Indices. GE also had the biggest cut when it slashed its dividend by $8.87bn in 2009, Silverblatt said.

GE forecast adjusted 2018 industrial free cash flow of $6bn to $7bn, up from an estimated $3bn in 2017.

The move to make GE smaller and nimbler is a turnaround from the previous multi-business approach taken by former chief executives Jack Welch and Jeff Immelt.

Flannery’s changes repudiate much of Immelt’s vision of a “digital industrial” company that builds software to manage and optimize GE’s jet engines, power plants, locomotives and other products.

Conglomerates have long been out of favor on Wall Street, where investors prefer to bet on specific industries rather than a mixed portfolio.

GE forecast 2018 adjusted earnings per share of $1 to $1.07 per share, compared with its earlier estimate of $2 per share. Wall Street was expecting $1.16, according to Thomson Reuters.

The company on Monday cut its quarterly dividend to 12 cents per share, from 24 cents, starting in December.

GE’s dividend cut – a bid to save cash when the company’s cash flow is deteriorating – is the third in its history. The other two cuts came during the Great Depression and the global financial crisis of 2007-2009.

Flannery’s strategy is a turning point for the company, which over several decades built itself into a sprawling conglomerate with interests across media, energy, banking, aviation, railroads, marine engines and chemicals.

GE executives have said that analysts have undervalued the company’s digital business. They argue the digital units should be valued more like Amazon, Google and other fast-growing tech companies.

GE will also cut its board to 12 from 18 members.


Metro Bank launches review of 14-firm lending and securities panel

Metro Bank has started a review of its 14-firm lending and securities panel with the aim of launching the new panel during the first half of 2018.

The current panel is made up of Blake Morgan, Bircham Dyson Bell, Breeze & Wyles, Cripps, EMW, Eversheds Sutherland, Herrington & Carmichael, Hill Dickinson, Howard Kennedy, Hugh James, Lawrence Stephens, MW Sols, Philip Ross and Pitmans.

The roster was first put together in 2012 and was first reviewed in 2014. The bank has five panels in total including commercial, property, employment and litigation panels.

A Metro Bank spokesperson said: “We can confirm that Metro Bank is currently reviewing its lending and securities panel and is due to review its commercial panel at the start of 2018.”

The commercial panel is currently made up of Addleshaw Goddard, Blake Morgan, DWF, Gowling WLG and King & Spalding.

The bank’s general counsel Sally-Ann James is running the review. James was head of contract and commercial at The Co-operative Banking Group until 2010. She joined Metro Bank as GC in 2012.

The bank, which was set up in 2010, is known to go off panel and uses Linklaters as one its main corporate advisers.

Linklaters acted on a number of deals for the bank in 2016, advising on its £1.6bn float on the London Stock Exchange and its £400m equity capital raise prior to the float.

‘If you walk away they’ll come to us!’ James Dyson’s brilliant argument FOR no deal Brexit

Sir James Dyson has said that “the time has come” for the United Kingdom to walk away from the European Union without a Brexit deal.

The sixth round of Brexit talks concluded on Friday with David Davis and Michel Barnier announcing that negotiations were still in the first phase of talks.

Speaking on The Andrew Marr Show, the founder of the Dyson company, claimed the EU was asking for too much in negotiations.

He said: “I don’t think it is the Government’s fault, I think the problem is the people we are negotiating with.

“I think they are demanding billions and billions to leave is quite outrageous. And demanding it before we have negotiated anything is outrageous.

“I would walk away, I think that is the only way to deal with them.

“I have been dealing with the EU and the EU countries for the last 25 years, on IEC standards and energy labels and all that kind of thing, there’s no way to deal with them, you have to walk away.

“If you walk away they’ll come to us because they want to export all their products to us. They will come back to us.

“We are in a very very strong position, incredibly strong position. We shouldn’t give them any money, we should just walk away and they will come to us.”

Sir James instead the UK had been very “reasonable” in talks so far, but the European Union were simply not budging.

“We have tried very hard, we have been very reasonable. They have been incredibly unreasonable,” he said.

“I think it is now the time, the time has come to walk away.”

During his BBC interview, Sir James, also highlighted that the EU market was “slowest-growing”.

He said: “There is fantastic opportunity outside Europe, there is an opportunity within in Europe, but Europe is the slowest growing area in the world, all the other areas are much fast growing.”

After the sixth round of Brexit talks concluded on Friday with Michel Barnier, the EU’s chief suggested talks could drag on into the next year if the bloc’s demands were not met.

The Frenchman gave the UK a two-week deadline to offer clarification on the financial settlement to get talks moving by December.

He said: “Only sufficient progress – that is to say sincere and real progress – on the three main key issues of these negotiations will enable the triggering of the second phase of our negotiation.”

David Davis said it was time for the European Union and the United Kingdom to both show some “flexibility, imagination and willingness” to deal with the deadlock in talks.

The European Union have reiterated that it will not begin trade talks with Britain unless “sufficient progress” has been made in its key three issues of the Irish border, citizens rights and the divorce settlement.

Former SpaceX worker reveals 7 perks Elon Musk gives employees

Elon Musk, the founder and CEO of SpaceX, is a notorious workaholic.

During high periods of stress he’s been known to sleep on the floor of his factory so he can work nearly around the clock, and hates having his time wasted with unnecessary meetings.

But many people still want to work for him at SpaceX.

Part of that might be related to the perks that Musk offers his employees. Former employee Josh Boehm worked from Musk at SpaceX and shared on Quora how he encouraged employees to put up with the long hours.

1. The office perks start out relatively simple — Musk provides free dinners, coffee, and froyo to employees.

2. Despite requiring a lot from employees, Musk takes the time to send encouraging emails and deliver speeches to employees.

3. The next perk, an in-house masseuse, is a little more lavish and probably helps with the stress of working long hours.

4. Celebrity spottings are another perk. “I saw Jennifer Aniston having lunch with Elon at the table across from me, ran into Joseph Gordon-Levitt in the bathroom, and had other people like Will Smith and Morgan Freeman come through the factory while I was working,” Boehm said.

5. Well-known people, like actor George Takei and co-founder of Reddit Jeremy Edberg, give private talks to employees.

6. Musk has bought out all the tickets in a particular show in a movie theater for movies like Gravity and The Martian “which is a lot more fun when SpaceX buys out all the tickets and you watch with a bunch of smart-asses who are actually rocket scientists!” according to Boehm.

7. But the biggest perk is the culture of SpaceX itself and the opportunity to work in a rocket factory. Employees would gather “outside of mission control for the launches, which was an amazing experience to be a part of when you’ve all been working your butts off for that moment,” Boehm said.

Law Firm Announces a Class Action Filed on Behalf of Antares Pharma, Inc

The Klein Law Firm announces that a class action complaint has been filed on behalf of shareholders of Antares Pharma, Inc. (NASDAQ: ATRS) who purchased shares between December 21, 2016 and October 12, 2017. The action, which was filed in the United States District Court for the District of New Jersey, alleges that the Company violated federal securities laws.

In particular, the complaint alleges that throughout the Class Period, defendants made materially false and/or misleading statements and/or failed to disclose that (1) Antares had provided insufficient data to the U.S. Food and Drug Administration in connection with its New Drug Application (“NDA”) for Xyosted; (2) accordingly, Antares had overstated the approval prospects for Xyosted; and (3) consequently, Antares’ public statements were materially false and misleading at all relevant times.

On October 11, 2017, the Company received a letter from the U.S. Food and Drug Administration stating that the agency had “identified deficiencies that preclude the continuation of the discussion of labeling and post marketing requirements/commitments” for its product candidate Xyosted. Then on October 20, 2017, Antares announced receipt of a Complete Response Letter from the FDA regarding the New Drug Application for Xyosted. The Company stated that the FDA could not approve the NDA in its present form due to concerns that Xyosted “could cause a clinically meaningful increase in blood pressure” and also noted the FDA’s concerns “regarding the occurrence of depression and suicidality.”

Shareholders have until December 22, 2017 to petition the court for lead plaintiff status.

Twitter halts ‘broken’ verified-profile system

Twitter has suspended its verified-profile scheme and described it as “broken”, following complaints over the type of accounts being verified.

Typically, prominent people, including musicians, journalists and company executives, get a blue icon on their profile after proving their identity.

However, some far-right and white-supremacist accounts have now also been verified.

Twitter founder Jack Dorsey said the scheme would now be “reconsidered”.

In a statement, the company said: “Verification was meant to authenticate identity and voice, but it is interpreted as an endorsement or an indicator of importance.

“We recognise that we have created this confusion and need to resolve it.”

The company said no further “general” accounts would be verified, while it worked on a fix.

Twitter has been making a series of changes to address abuse and harassment on the social network.

Last week, it published a rewritten version of its rules, which it said would make them easier to understand.