Business Blog Posts

The increase, albeit small, follows Gross's move to ratchet up bearishness in March by taking his initial short position in U.S. government-related debt, which includes Treasuries, TIPS, agencies, interest rate swaps, Treasury futures and options and FDIC-guaranteed corporate securities.

The $240 billion Total Return fund also raised its cash position to 37 percent in April from 31 percent in March, added Pacific Investment Management Co, which oversees $1.2 trillion in assets.

The Total Return fund took down its mortgage exposure to 24 percent in April from 28 percent the previous month.

Last Friday, Gross told Reuters that the only way he would purchase Treasuries again is if the United States heads into another recession.

Since the news that Gross had turned more bearish on government debt, reflecting his growing worries over the country's fiscal deficit and debt burden, Treasury prices have been soaring.

Gross told Reuters on Friday: "Treasury yields are currently yielding substantially less than historical averages when compared with inflation. Perhaps the only justification for a further rally would be weak economic growth or a future recession that substantially lowered inflation and inflationary expectations."

(Editing by Andrew Hay, Gary Crosse)

The third-largest U.S. bank by assets saw its shares fall 2.4 percent to $44.11 on Monday. The reverse split has the stock in double-digits for the first time since November 2008, but the gambit has a mixed track record.

"I doubt the stock is going to go back to the level it was pre-reverse split, but Citi has its work cut out for them," said Jason Weisberg, managing director at Seaport Securities Corp in New York.

Often, companies will engineer a reverse split to keep from being delisted because their stock price has fallen through $1 a share. Many of those companies still don't survive.

For larger companies, the odds are better, though they often take a short-term hit.

Data from Birinyi Associates Inc shows Russell 1000 stocks that have enacted a reverse split since 1990 have seen an average decline in their stock price of 1.6 percent 30 days after the split.

A number of big-cap names have been successful, including Priceline.com (PCLN.O), which did this in 2003 when shares were less than $5 a share. It now trades at about $530 a share.

Larger companies often engineer a reverse split to boost their share price to attract institutions, some of which are prohibited from owning low-priced stocks. This often makes shares less volatile as well.

"You can call it the peer pressure factor -- all of their competitors are in the double digits while their stock was in the single digits," said Mohannad Aama, managing director at Beam Capital Management LLC in New York.

"Over time they do increase institutional ownership -- that may have been the main driving factor."

Some continue to struggle post-split. Brocade Communications (BRCD.O) did a 1-for-100 reverse split that bumped its stock to about $8 a share from 80 cents in June 2007; shares are currently at $6.29. Ciena (CIEN.O) is down about 28 percent since its September 2006 split.

Priceline.com was an exception, though the stock took a few years to take off. Shares of insurer American International Group Inc (AIG.N) fell in 2009 after a 1-for-20 reverse split, although the stock has rebounded since.

Citigroup, which saw its shares hit a nadir of 97 cents in March 2009 in the wake of the financial crisis, may be another -- but it depends on company performance.

"It could be the exception that proves our rule," April Klein, a professor at New York University's Stern School of Business, said.

Klein co-wrote a 2008 study with Emory University's Goizueta Business School finance professor James Rosenfeld showing that those that conduct reverse splits often suffer poor market and operating performance for years post-split.

"Most of the companies on our list were not 'too big to fail.' Also, there was no delisting threat here," Klein said.

With shares at a higher price, the company may be held to a higher standard.

"Why would anybody own Citigroup when they can own JPMorgan for the same share price?" said Mark Sebastian, chief operating officer of Option Pit Mentoring, an options education firm in Chicago.

"JPMorgan is a much better company. Now there is actual price risk for the stock when it wasn't at $4.50."

The shares are trading in the mid-$40s for the first time since October 2007 when the bank started to recognize billions of dollars of losses on bad loans.

Citigroup shares fell on the day in March when the bank announced its reverse split, and industry observers had forecast they would fall again on Monday.

(Additional reporting by Jen Rogers in New York and Doris Frankel in Chicago; Editing by John Wallace, Kenneth Barry and James Dalgleish)

LinkedIn Corp said on Monday it would offer 7.84 million shares in its initial public offering.

LinkedIn, which attracts professionals and job seekers with 100 million worldwide members, priced its IPO at between $32 and $35 a share. It is generating significant interest as one of the first social networking companies to start the process of being publicly traded -- ahead of the much-anticipated Facebook IPO.

Social media companies including Twitter, Groupon and Zynga have generated significant interest and are seeing multibillion dollar valuations of their shares trading on the secondary markets.

Last week, Renren Inc, one of the biggest social networking companies in China, made its trading debut after a successful IPO -- another indicator of investor interest in the hot social media companies space.

Renren's stock surged 28.6 percent in its May 4 debut.

LinkedIn is offering 4.8 million shares, and the rest will be sold by some of its stockholders.

Shares owned by co-founder and LinkedIn board Chairman Reid Hoffman, who is among those stockholders selling shares in the IPO, would represent about 21.7 percent of voting power after the offering.

Other key stakeholders offering shares include Goldman Sachs, McGraw-Hill Companies Inc and Bain Capital Venture Integral Investors LLC.

Major investors Sequoia Capital, Greylock Partners and Bessemer Venture Partners, which together own about two-fifths of the company, will not be participating in the IPO.

In January, LinkedIn had filed with U.S. regulators for an IPO to raise up to $175 million.

The company expects to receive net proceeds of about $146.6 million from the shares it is offering in the IPO, based on an assumed offer price of $33.50 apiece.

It has applied to list its shares on the New York Stock Exchange under the symbol "LNKD."

LinkedIn earned $15.4 million in 2010 on net revenue of $243 million.

(Reporting by Jennifer Saba in New York and Brenton Cordeiro in Bangalore; Editing by Maju Samuel and Maureen Bavdek)

Hertz first bid for Dollar Thrifty in April, 2010, but following a bidding war with Avis, the Hertz offer was voted down by Dollar Thrifty shareholders in September.

Hertz's second bid for Dollar Thrifty comes at a time when the car rental industry is seeing demand improving, helped by a rebound in the travel and tourism business.

Dollar Thrifty last week reported market-beating quarterly results and raised its profit outlook for the year.

Hertz said it will go direct to Dollar Thrifty shareholders offering $72 a share -- a 3 percent premium to Dollar Thrifty's Friday close -- comprising $57.60 in cash and 0.8546 Hertz shares.

Dollar Thrifty and Avis have been pursuing antitrust clearance since October. Avis' cash-and-stock offer for Dollar Thrifty currently stands at $1.67 billion based on Avis' Friday close.

That protracted process -- Avis already has a budget brand that competes with Dollar Thrifty -- has brought Hertz back into the fray.

"Avis Budget has been unable to produce a viable antitrust remedy, despite an entire year of discussions with the FTC with no end in sight," said Hertz CEO Mark Frissora, referring to the U.S. Federal Trade Commission.

Hertz has said it will sell its low-cost Advantage brand.

Barclays Capital, Lazard, Bank of America Merrill Lynch and Deutsche Bank Securities are acting as financial advisers to Hertz.

Hertz shares hit a 41-month high earlier this month and Dollar Thrifty shares have gained 48 percent so far this year as part of a 14-fold increase in 2 years. On Nasdaq, Avis shares are up 18 percent this year. (Reporting by A. Ananthalakshmi in Bangalore; Editing by Maju Samuel and Ian Geoghegan)

On the earnings front, investors awaited results from AES Corp (AES.N), Sempra Energy (SRE.N), SYSCO Corp (SYY.N) and Tyson Foods (TSN.N).

Oil futures rose 3 percent to above $100 a barrel, helped by bargain hunting from traders and investors after last week's sharp drop. <O/R>

European stocks were down in morning trade as the return of fears over the region's debt crisis sparked a sell-off in the euro zone peripheral stock markets such as Madrid's IBEX .IBEX, down 1.8 percent. .EU

Investors were rattled by rumors that debt-stricken Greece could leave the euro zone, rumors denied on Saturday by Greek Prime Minister George Papandreou.

The euro bounced back against the dollar as some sovereign investors viewed its selloff late last week on concerns about Greek debt as overdone given still favorable interest rate differentials, although technical indicators suggest gains could be temporary.

Tokyo stocks fell for a second straight session on Monday, dragged down by a plunge in Chubu Electric (9502.T) after Prime Minister Naoto Kan called for the closure of its nuclear plant due to worries that a large earthquake could trigger another nuclear crisis. .T

Apple (AAPL.O) has overtaken Google (GOOG.O) as the world's most valuable brand, ending a four-year reign by the Internet search leader, according to a new study by global brands agency Millward Brown.

An unexpectedly strong report on U.S. payrolls helped equities bounce back on Friday from four days of losses, tempering worries that stocks could suffer the sharp declines seen this week in commodities.

The Dow Jones industrial average .DJI gained 54.64 points, or 0.43 percent, to 12,638.81. The Standard & Poor's 500 .SPX added 5.10 points, or 0.38 percent, to 1,340.20. The Nasdaq Composite .IXIC rose 12.84 points, or 0.46 percent, to 2,827.56. For the week the Dow lost 1.3 percent, the S&P fell 1.7 percent and the Nasdaq Composite dropped 1.6 percent.

(Reporting by Blaise Robinson; Editing by Hans Peters)

In a sign that markets were still cautious, European shares are set to open between 0.6 to 0.9 percent lower, according to financial bookmakers.

Hiring by U.S. companies quickened to its fastest pace in five years in April, a report showed on Friday, helping the dollar gain versus the euro and heavily sold commodities like silver and oil retrace some of their losses.

"Certainly Friday felt like the end of the panic liquidation," said a metals trader at an Australian bank in Sydney.

While last week's violent moves were seen more driven by unwinding of speculative positions rather than a sudden weakening of the otherwise favorable global economic outlook, traders said the sheer scale of the decline may introduce more two-way volatility into the market in the near term.

The Reuters-Jefferies CRB index .CRB, a global benchmark for commodities prices, suffered its biggest weekly drop since late 2008 while silver and crude oil registered record single-day falls on Thursday.

Two days before the U.S. jobs data, redemptions spearheaded by institutional investors in commodity funds hit their highest weekly total on record with funds focusing on gold and precious metals heavily hit by outflows, fund-tracker EPFR Global said.

On Monday, though, prices of copper, wheat and oil rose, with the latter boosted by intensifying conflict in Libya.

"When you see a 30 percent retracement in the likes of silver, you will see some buying, but we are now entering a period of more two-way action as opposed to earlier when you bought commodities and watched it go higher," said Andrew Robinson, a macro, commodities and FX analyst at Saxo Markets.

BOON FOR GROWTH

Even as Brent crude rose above $110 a barrel after losing $16 last week in its biggest ever decline in dollar terms, Deutsche Bank's Alan Ruskin said the temporary benefit of the sharp drop in oil prices along with the jobs data should prove to be a short-term boon for global growth.

This is because the growth impact of lower energy prices for major energy consumers like the United States and China will overwhelm the negative growth implications for energy producers.

The bounce in commodities also boosted the region's stock markets.

Australia's benchmark index .AXJO ended 0.3 percent higher while Hong Kong's stocks .HSI rose nearly a percent, led by energy and banking counters. Japanese .N225 stocks ended down.

MSCI's index of Asia Pacific shares outside Japan .MIAPJ0000PUS was up nearly 1 percent before pulling back somewhat. It fell nearly 3 percent last week.

"We have probably seen the worst of the unwinding last week," said Wing Fung Financial Group analyst Mark To.

"We will see a rebound today, but it's too soon to say whether today is the beginning of an uptrend with people waiting on China inflation data due on Wednesday."

Beijing is expected to release April inflation data this week with economists polled by Reuters expecting the figure to come in slightly lower on falling food costs.

In currency markets, the euro was under pressure after posting its biggest weekly loss versus the dollar due to the deepening euro zone debt problems.

While Greece has denied speculation it is quitting the euro zone, the European Union is under pressure to renegotiate its financial bailout, with an Irish minister saying any concessions given to Athens should mean better terms for Dublin as well.

The single currency was last at $1.4415 on short-covering, after having slumped to a three-week low around $1.4308, and is now well below a 17-month peak above $1.4900 hit last week.

A revival in demand for risky assets saw demand for safe haven instruments such as bonds cool with ten-year Japanese bond yields edging a shade higher to 1.14 percent.

US Treasuries weakened slightly as traders took profits after Friday's drop which was fueled by speculation of Greece's exit from the euro zone economy. Ten-year yields were up by three basis points to 3.18 percent.