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  Wednesday, 23 Apr 2014 | 11:57 AM ET

In Aereo case, Supreme Court behind the times

Posted By: CNBC.com staff
U.S. Supreme Court building in Washington, D.C.
Getty Images
U.S. Supreme Court building in Washington, D.C.

The Supreme Court is hearing an important case regarding TV streaming rights, but apparently its members haven't much of a clue as to how technology works these days.

From Chief Justice John Roberts not knowing the difference between email and a pager to Justice Stephen Breyer admitting he didn't understand the movie "The Social Network" that chronicled the birth of Facebook, the Supremes showed that while they may know the law, they don't know the 'Net, according to an account from New York magazine.

The case involves TV networks trying to stop Aereo from streaming their content over its website to paying customers.

There were at least eight fairly significant technology flubs by the justices, as chronicled by nymag.com in a post you can see here.

»Read more
  Tuesday, 22 Apr 2014 | 3:31 PM ET

David Einhorn takes stake in HFT-antidote IEX

Posted By: Lawrence Delevingne
David Einhorn
Scott Eells | Bloomberg | Getty Images
David Einhorn

Count David Einhorn on team Michael Lewis.

"Michael Lewis's new book 'Flash Boys,' like all his books, is a fun read and is based on a true story. It brings attention to some areas of the market that can improve further, and a few areas of possible abuse," Greenlight Capital, which Einhorn heads, said in an investor letter Tuesday.

Read MoreThe fight that stopped trading on the NYSE

"There are many legitimate and even beneficial aspects to computerized trading, including market making and statistical arbitrage, yet there are also some areas that are ripe for reform. Most glaring is the latency arbitrage that is used to identify the presence of large institutional orders for the sole purposed of legally front-running them."

»Read more
  Tuesday, 22 Apr 2014 | 2:07 PM ET

Einhorn: Bubble brewing, shorting momentum stocks

Posted By: Lawrence Delevingne

David Einhorn has a clear warning for technology investors: we're in a bubble.

"Now there is a clear consensus that we are witnessing our second tech bubble in 15 years," Greenlight Capital said in an investor letter Tuesday. "What is uncertain is how much further the bubble can expand, and what might pop it."

The firm said there were several indications of the over-exuberance, including the rejection of conventional valuation methods; short sellers forced to cover their positions because of losses; and "huge" first-day stock appreciations after their initial public offerings.

"The current bubble is an echo of the previous tech bubble, but with fewer large capitalization stocks and much less public enthusiasm," the letter said. The firm said it was shorting a group of undisclosed "high-flying momentum stocks."

»Read more
  Tuesday, 22 Apr 2014 | 1:15 PM ET

How one trader made $280,000 overnight on FURX

Posted By: CNBC.com staff
Traders work the floor of the New York Stock Exchange.
Getty Images
Traders work the floor of the New York Stock Exchange.

One of the hottest topics of market conversation Tuesday was Bill Ackman's move to join Valeant in a takeover bid for Allergan. But there also was another huge move in pharma overnight that didn't garner near the attention.

One astute trader picked up $250,000 overnight by buying options in Furiex Pharmaceuticals, which develops drugs used in compound development and collaboration and saw its shares spike, according to an analysis by Andrew Keene of KeeneOnTheMarket.com.

Read how the trade broke down here.

»Read more
  Wednesday, 23 Apr 2014 | 9:40 AM ET

I did not front-run Allergan stock, Ackman says

Ackman: Partnership with Valeant is not front running
William Ackman, Pershing Square Capital Management, explains how his partnership with Valeant is structured. And J. Michael Pearson, Valeant chairman & CEO, discusses why he partnered with Ackman instead of pursing Allergan alone. Creating shareholder value is our job, says Pearson.

Activist investor Bill Ackman told CNBC on Wednesday his partnership with Valeant Pharmaceuticals to try to buy Allergan for $46 billion does not violate securities law.

This arrangement, in which Ackman bought a 9.7 percent stake in the Botox maker at the behest of Valeant, was not front-running and not insider trading, Ackman said in a "Squawk Box" interview.

He said his lawyer—Robert Khuzami, former director of enforcement at the SEC—vetted the Valeant partnership and deemed it legal.

"The way the rules work is you're actually permitted to trade on inside information ... as long as you didn't receive the information from someone who breached … fiduciary duty or duty of confidentiality, et cetera," Ackman said.

"Valeant basically came to us and said, 'Look, if you can help us buy Allergan we can work with you.' We said, 'Great,' and we formed a partnership," he said. "The partnership has various terms. It gives us the right and permission from the company to go buy a stake in Allergan."

The founder of the Pershing Square Capital Management hedge fund—with $13 billion in assets under management—said he was not in the market buying Allergan stock before that.

»Read more
  Monday, 21 Apr 2014 | 2:24 PM ET

Investors scared to death of stocks: Bullish sign?

Posted By: Jeff Cox
Fighting investor fear
CNBC's Jeff Cox discusses why investors are still afraid of the market.

The latest evidence that some people just can't get enough comes from investors who say they're still afraid of the stock market—despite a stunning 180 percent gain over the past five years.

In a survey by Bankrate.com released Monday, fully 73 percent of respondents say they're no more inclined to put capital to work in equities than they were a year ago, even with a low rate of returns on other investments like savings accounts and certificates of deposit.

The number is consistent with the 2013 and 2012 surveys—which saw readings of 76 percent—and comes even though the S&P 500 stock index surged 29 percent last year.

»Read more
  Saturday, 19 Apr 2014 | 1:00 PM ET

Historically miserable earnings cycle may not matter

Posted By: Jeff Cox
Great growth expectations
Are economic growth expectations too high? CNBC's Jeff Cox explains.

Talk about disregarding bad news: Investors have been all but ignoring a fairly miserable earnings season as hopes proliferate that in the end it's only a blip on the profit radar.

The market actually has risen modestly during a reporting period in which profits are up a scant 2 percent, according to Thomson Reuters I/B/E/S, and expectations among analysts remain that the overall season could see a net loss for companies on the S&P 500.

In fact, Jeff Kleintop, chief market strategist at LPL Financial, pointed out in a recent report that the total earnings "cycle"—from the recession trough in the second quarter of 2009 to the current level—is the weakest in 55 years, dating to the late days of the Eisenhower administration.

But like many of his Wall Street brethren, Kleintop believes the current low is only a temporary lull before a stronger economy free of winter's clutches triggers stronger corporate profits.

»Read more
  Tuesday, 22 Apr 2014 | 10:12 AM ET

Morning six-pack: What we're reading Tuesday

Posted By: Jeff Cox
Bill Ackman
David Grogan | CNBC
Bill Ackman

Happy Tuesday. Keep your eye on the prize and watch out for the activist investor looking to snag your Morning Six-Pack.

One of the kings of activist investors, Bill Ackman, is in on the prowl and about to land perhaps the biggest fish of his career as Valeant gets set to make a major move on Allergan and all of its Botox and breast implant glory. (Wall Street Journal)

Alan Mulally, whose reign at Ford will be remembered for the way he demonstrated that you can run a successful auto company without needing the government to hold your hand and pay your bills, is expected to leave sooner than expected. (Economic Times)

»Read more
  Monday, 21 Apr 2014 | 2:53 PM ET

Loeb to Sotheby's: My directors are better

Posted By: Lawrence Delevingne
Dan Loeb to nominate three for Sotheby's board.
Simon Dawson (L) Mike Clark (R) | Getty Images
Dan Loeb to nominate three for Sotheby's board.

Dan Loeb continued his battle against Sotheby's with a new letter promoting Third Point's board nominees over the art house's slate.

"We are convinced that having an owner's perspective in the boardroom yields better results, that this board is in dire need of fresh insights, and that our candidates are more qualified than the company's emissaries we are seeking to replace," Loeb wrote in the letter released Monday.

"We are confident that adding three shareholder voices to this twelve-person board will do more to improve Sotheby's long-term growth and increase its share price than would rubber-stamping the company's latest set of hand-picked nominees."

Shareholders will formally vote on the new board at Sotheby's annual stockholder meeting May 6, but proxy cards were sent at the end of March, prompting Third Point to position itself early. Institutional Shareholder Services, which advises stock owners, will likely release its recommendation on the fight this week.

Third Point's director nominees are Loeb himself, plus turnaround expert Harry Wilson and jewelry executive Olivier Reza. Sotheby's nominees are private equity advisor Jessica Bibliowicz, retail mall developer Robert Taubman, and restaurateur Daniel Meyer.

»Read more
  Saturday, 19 Apr 2014 | 12:30 PM ET

Luxury rental market surging in metro New York

Posted By: Stephanie Landsman
Luxury rental boom ... in Jersey
CNBC's Stephanie Landsman discusses how the luxury rental boom isn't confined to New York City and its boroughs, but that developers are seeing new opportunities in New Jersey.

After renting a two-bedroom apartment on New York City's Lower East Side for several years, 32-year old Lea Ann Willett and her husband craved more amenities and space, and floors that didn't creek.

Buying a condo in Manhattan wasn't an option. The Willetts wanted to avoid dealing with co-op boards and the general risks associated with owning in the New York market.

So the couple branched out and decided to rent a two-bedroom apartment in a brand new high-end building in Brooklyn Heights—equipped with a washer and dryer in each unit, stainless steel appliances and a virtual doorman. Plus, the subways and an Equinox gym are just steps away.

"It is such an investment in your health and well-being," said Willett, who loves the idea of being the first person to live in the apartment. "It definitely felt like the right move."

»Read more

About NetNet

  • NetNet is where you'll find the low-down and the high jinks of Wall Street. It's the place for insider stories, trader gossip, and tales of the foibles of the moneyed crowd and the culture of finance.Wall Street news and commentary served fresh all day long.

 

  • Jeff Cox is finance editor for CNBC.com.

  • Lawrence Develingne

    Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.

  • Stephanie Landsman is one of the producers of CNBC's 5pm ET show "Fast Money."

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