The daily business briefing: February 22, 2017
Verizon negotiates lower price for Yahoo sites after breach, Wells Fargo fires four managers over accounts scandal, and more
Verizon and Yahoo agree to lower price after massive breach
Verizon Communications said on Tuesday that it still planned to buy Yahoo's core internet business, but that it had negotiated a lower price following two cyberattacks in which 1.5 billion accounts were breached. Verizon, the nation's No. 1 wireless carrier, said it shaved $350 million from the original $4.83 billion acquisition price. The original deal was announced in July, but it was held up after the hacking, as Verizon reconsidered how much the Yahoo sites were worth. Verizon was not expected to back out entirely, as it is in a race with its main rival, AT&T, to improve its content offerings and find new ways to grow in a crowded wireless market.
Wells Fargo fires four managers over fraudulent accounts scandal
Wells Fargo fired four senior managers, including its consumer credit solutions head, on Tuesday over a scandal in which employees created accounts for customers without their knowledge. The executives were dismissed based on findings in the bank board's ongoing investigation. None of the fired executives will receive a 2016 bonus, and all will forfeit their vested and unvested options. Regulators in September hit Wells Fargo with a $185 million fine over the case, in which employees possibly opened more than two million fraudulent accounts. Government investigations are ongoing.
Popeyes and Restaurant Brands shares rise after acquisition announcement
Popeyes Louisiana Kitchen shares jumped by 17 percent on Tuesday after Restaurant Brands, the parent of Burger King and the Tim Hortons doughnut and coffee chain, announced that it was buying the Cajun fast-food chain for $1.8 billion. The price valued Popeyes at $79 a share, a 20 percent premium on Popeyes' Friday closing price. The deal gives Restaurant Brands a greater presence in the popular but crowded market for chicken franchises, and its shares rose by 7 percent Tuesday after the announcement. There had been speculation that it had been considering another chain, El Pollo Loco, and that company's stock fell by more than 1 percent on Tuesday.
Stocks rise overseas as investors await Fed minutes
Global stocks hit all-time highs on Wednesday following another record day on Wall Street for the major U.S. stock indexes on Tuesday. The dollar also gained as investors awaited the release of Federal Reserve minutes early Wednesday afternoon, hoping for clues on the timing of the U.S. central bank's next interest rate hike. Stocks have been on a tear in 2017 as shares were buoyed by solid earnings reported by companies in Europe and the U.S., as well as President Trump's promise to lower taxes and cut federal regulations. U.S. stock futures struggled early Wednesday as investors waited for signs from the Fed minutes.
Lakers name Magic Johnson as head of basketball operations
The Los Angeles Lakers on Tuesday promoted Hall of Famer Earvin "Magic" Johnson to be its new president of basketball operations, firing both longtime general manager Mitch Kupchak and executive vice president of basketball operations Jim Buss in the process. Lakers president and co-owner Jeanie Buss, Jim Buss' sister, said the shakeup was necessary to bring the team, now flailing with the NBA's third-worst record at 19-39, back to a level of competitiveness "our fans rightly deserve." The drastic changes came just two days before the league's trade deadline, heaping extra pressure onto Johnson, who helped the Lakers win five titles in the 1980s as a player, and recently rejoined the team as an advisor.