Buying Google, Suing Banks
Google reports quarterly profits that were higher than Wall Street
EWS AT A GLANCE
Google beat analysts’ already bullish earnings expectations for its third quarter, with profits rising 46 percent to $1.07 billion. Google added a record 2,130 new employees in the quarter, but said its hiring spree was winding down. (AP in Yahoo! Finance) Shares of Google rose $6.14 in regular trading, closing at $639.62, and jumped as high as $660 in extended trading after the results were announced. (Bloomberg) “We are looking very hard to find something negative to say about this quarter, but it’s very difficult,” said Sanford C. Bernstein analyst Jeffrey Lindsay. “Google improved on all fronts we were hoping it would improve on.” (Los Angeles Times, free registration required)
Bear Stearns, HSBC scrutinized
Massachusetts regulators are investigating whether Bear Stearns improperly traded in two in-house hedge funds before they collapsed last summer, The Wall Street Journal reports. The collapse of the two funds cost investors $1.6 billion and helped spark the global credit crunch. (AP in CNNMoney.com) In other legal action resulting from the credit crisis, San Francisco-based real estate fund Luminent Mortgage Capital is suing HSBC, according to The Journal. Luminent claims that the British bank profited off it by improperly undervaluing, then purchasing, nine subprime-mortgage bonds the fund put up as collateral. (Reuters)
Airlines reap rewards, passengers suffer
Airlines are reporting huge profits from last quarter, even as many fliers remember the quarter more for its record levels of lost baggage, bumped passengers, and delays. With fares relatively low, airlines were able to increase their profits by squeezing more passengers into planes and cutting costs. “I’m aghast there isn’t more public outcry over this,” said Kate Hanni of the California-based Coalition for an Airline Passengers’ Bill of Rights. “They’re making money hand over fist at the expense of passengers.” The good times for the airlines might be short-lived, however, as spiking fuel costs threaten future profits. (Los Angeles Times, free registration required)
Patriots win ticket reseller names
The New England Patriots won a court order for the names of fans who bought or sold Patriots tickets through online reseller StubHub. The Patriots threatened to revoke the season tickets of those on the list, because reselling tickets for a profit violates team rules. And tickets often sell for well above face value—a pair of $125 Patriots-New York Jets tickets were selling for $1,300 apiece yesterday. Given the Patriots’ recent trouble over illicitly filming opposing teams, “clearly there is a lack of understanding about what privacy is,” said Ari Schwartz of the Center for Democracy and Technology. (AP in BusinessWeek.com)
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