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Last Call: Angry Birds Maker Rovio Is Booted From One-Hit Wonder Club

Angry Birds iPhone app
Source: Apple
Angry Birds iPhone app

Tonight we begin with a question:

What do the following have in common?

a) Soft Cell, the group which sang “Tainted Love”

b) Buster Douglas, boxer who defeated Mike Tyson in 1996

c) Gottlieb, the company which created the videogame Q*bert,

d) Joseph Heller, author of Catch 22

— Below, why Rovio won’t be making the above list

Market Musings With CNBC Market Guru Robert Hum

  • Recap: Dow at 12,573.27, -31.26 (-0.25%); S&P at 1,334.76, -6.69 (-0.50%); Nasdaq at 2,866.19, -21.79 (-0.75%)
  • Dow loses over 100 points, then flirts with gain, but closes down for 6th straight day
  • Dow, S&P have first 6-day losing streak since May 18
  • Major averages on pace for worst week since week ended June 1
  • Euro falls below $1.22 for first time in 2 years

The Word on the Street Tonight

Banks’ Libor Costs May Hit $22 Billion/FT-Brooke Masters & Alex Barker: “Twelve global banks that have been publicly linked to the Libor rate-rigging scandal face as much as $22bn in combined regulatory penalties and damages to investors and counterparties, according to Morgan Stanley estimates. The analysis, which the authors admit is “crude”, assumes that 11 more banks will be penalized like Barclays , which paid $456m last month to US and UK authorities for attempting to manipulate the London Interbank Offered Rate, the benchmark for $360tn in derivatives, loans and mortgages.”

Pew! Pew! US Videogame Sales Fall for 7th Month/AP: “A new report says U.S. retail sales of videogame hardware, software and accessories fell for a seventh consecutive month. Sales declined 29 percent in June to $700 million. Sales of console and portable software — the videogames themselves — fell 29 percent from a year earlier to $329 million. Sales of hardware fell 45 percent to $201 million. That was offset partly by a 4-percent increase in sales of accessories, to $170 million.”

Activist Investor Sets Sights on P&G/WSJ-Emily Glazer: “Procter & Gamble Co. is in the cross hairs of activist investor William Ackman, a sign that hedge funds are feeling more emboldened to demand changes in management and strategy at the nation's largest companies. By investing in the consumer-products giant, which has a market value of $175 billion and a broad investor base, Mr. Ackman appears to be preparing to try his activist-investing strategy on an unusually large scale. His purchases give him a stake of just over 1% in the company, a small platform from which to seek change.”

Elisabeth Murdoch Drops CEO Job at Shine/WSJ-Shalini Ramachandran: “Elisabeth Murdoch, the daughter of News Corp. Chairman and Chief Executive Rupert Murdoch, has given up the CEO position at Shine Group, a U.K. television-production company she founded and sold to News Corp. last year. Ms. Murdoch, 43 years old, will remain chairman of Shine, focusing on developing strategy and leading the creative parts of the company, Shine said in a written statement. It named the company's chief operating officer, Alex Mahon, as CEO, taking "responsibility for day to day management" of Shine. Ms. Mahon, 38 years old, joined Shine in 2006.”

J.P. Morgan Earnings: What to Watch/WSJ- David Benoit: “J.P. Morgan is due Friday morning to report its second quarter results in the choppiest waters the biggest bank in the country has seen in some years. The bank is so full of news that Chairman and CEO Jamie Dimon, along with his CFO Doug Braunstein, will host a 2-hour conference call tomorrow morning at 7:30 a.m., shortly after the results hit. Here’s what we’ll be looking for in the morning: …The Whale’s trading loss…Clawbacks…Loan loss reserves …Revenues …The share price.”

HSBC Reveals Problems With Internal Controls/NY Times – Landon Thomas & Mark Scott: “HSBC , the largest financial institution in Europe, has become the latest British bank to reveal major internal-control problems, saying that senior officials would apologize to U.S. lawmakers next week for not cracking down soon enough on money-laundering activities in America. The money laundering, which a U.S. Senate subcommittee indicates was linked to terrorism and drug deals, could result in HSBC’s paying fines of up to $1 billion, according to analysts.”

Lexmark revises financial outlook/Marketwatch: “Lexmark International, Inc. today announced that second quarter 2012 financial results will be lower than expected. Based on a preliminary analysis of second quarter financial results, the company currently expects second quarter revenue to decline about 12 percent year over year. This compares to the guidance that the company previously provided in April for the second quarter of an expected revenue decline between 7 to 9 percent year over year. GAAP earnings per share are now expected to be in the range of $0.53 to $0.55, or $0.87 to $0.89, excluding approximately $0.34 for restructuring-related and acquisition-related adjustments. This compares to the GAAP earnings per share guidance that the company previously provided for the second quarter of $0.65 to $0.75, or $0.95 to $1.05, excluding approximately $0.30 per share for restructuring-related and acquisition-related adjustments.”

Moody's downgrades Italy by two notches, warns might cut further/Reuters: "Moody's Investors Service on Friday downgraded Italy's government bond rating by two notches to Baa2 from A3, and warned it could cut it much further if the country were to lose access to debt markets. The move left Italy's rating just two notches above junk status and could raise its borrowing costs ahead of a bond sale due later on Friday. The news knocked the euro down around a quarter of a cent to $1.2190 in Asian trade.”

Google CEO Page recovering, was in office this week/Reuters-Liana Baker & Lisa Richwine: “Google Inc CEO Larry Page, absent from the Internet company's biggest public events for weeks, is recovering from an unspecified ailment that caused him to lose his voice and was in the office on Monday, Executive Chairman Eric Schmidt said. Page has stayed out of the public eye since last month, when he was a no-show at an annual shareholders' meeting after having "lost his voice," Schmidt explained at the time. His prolonged absence has raised questions about the health of the 39-year-old Google co-founder and the mystery condition affecting his voice.”

Tonight’s question:

What do the following have in common?

a) Soft Cell, the group which sang “Tainted Love”

b) Buster Douglas, boxer who defeated Mike Tyson in 1996

c) Gottlieb, the company which created the videogame Q*bert,

d) Joseph Heller, author of Catch 22

Answer: They are all one-hit wonders – and here is why Rovio won’t make the list:

Angry Birds maker hits No 1 with new brand/Reuters-Tarmo Virki: "The first non-Angry Birds game in more than two years from Rovio Entertainment hit No. 1 on download charts on Thursday, showing the Finnish start-up behind the world-famous gaming franchise was more than a one-hit wonder. Rovio, the maker of Angry Birds games - in which players use a slingshot to attack pigs who steal the birds' eggs - has been valued by analysts at $6 billion (3.88 billion pounds) to $9 billion, roughly on par with struggling cross-town phone maker Nokia ."

Economic Data

830am et Jun PPI

955am et July (pre) Consumer Sentiment

**End-June reading

Earnings

Before the bell:

JPMorgan Chase, Wells Fargo

Key Guests

Sharyn O'Halloran, Columbia University (640a)

John Allison, Wake Forest University (700a)

Sallie Krawcheck, Fmr Bank of America President (700a)

Rep. Jan Schakowsky, D-IL (730a)

John Kanas, Fmr North Fork Bancorp CEO (800a)

Steve Crawford, Centerview Partners Co-Founder (800a)

Michael Leven, Las Vegas Sands President (840a)

Reince Priebus, RNC Chairman (1120a)

Stephen Roach, Yale University Senior Fellow (1230p)

Barbara Reinhard, Credit Suisse Managing Director (200p)

Timothy Sloan, Wells Fargo CFO (310p)

Jeffrey Saut, Raymond James Chief Investment Strategist (400p)

Stephen Gallagher, Societe Generale Managing Director (400p)

Marc Faber, Marc Faber Limited (745p)

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