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Netflix crosses $100 billion market capitalization as subscribers surge

(Reuters) – Netflix Inc (NFLX.O) snagged 2 million more subscribers than Wall Street expected in the final three months of 2017, tripling profits at the online video service that is burning money on new programming to dominate internet television around the world.

The results drove Netflix to a market capitalization of more than $100 billion for the first time. Shares jumped 9 percent to over $248 in after-hours trading on Monday after rallying throughout the month and rising 53 percent last year. (

The company has signed up more than half of all U.S. broadband households and is building its customer base in 190 countries by spending billions on programming.

Netflix picked up 6.36 million subscribers in international markets from October through December, when it released new seasons of critically acclaimed shows “Stranger Things” and “The Crown” as well as Will Smith action movie “Bright.” That topped Wall Street expectations of 5.1 million, according to FactSet.

Along with 1.98 million customer additions in the United States, the company ended the year with 117.58 million streaming subscribers around the globe, despite a price hike in October.

“Netflix is pouring more and more money into making content, and it is directly translating into more subscribers,” BTIG analyst Richard Greenfield said. “They see a huge opportunity and they are moving as fast as they can to attack it.”

The company also said it took a $39 million non-cash charge for “unreleased content we’ve decided not to move forward with.” A source familiar with the matter said the charge was related to content starring Kevin Spacey, with whom Netflix cut ties after he was accused of sexual misconduct.

Netflix temporarily halted production of “House of Cards” to write out Spacey’s character and decided not to release the film “Gore,” which starred Spacey as Gore Vidal.

Spacey has apologized to one of his accusers, and according to his representatives is seeking unspecified treatment. Reuters was unable to independently confirm the accusations.

The charge is one of the first signs of costs faced by companies in the wake of a widespread campaign against sexual harassment.

Netflix turned a DVD-by-mail business into an online competitor of movie channel HBO. As it grew it began licensing its own original shows to ensure a stream of new offerings if studio suppliers ended deals.

In fact, Walt Disney Co (DIS.N) is making a major push into online streaming and will pull its first-run shows and movies from Netflix in 2019 as Hollywood fights for audiences.

Netflix plans to spend up to $8 billion this year on TV shows and movies to fend off Disney, Inc (AMZN.O), studios-owned Hulu and local competitors that are jumping into online video, and it is turning more and more to high-budget projects, such as the roughly $90 million “Bright.”

In 2017, Netflix recorded its first full-year profit in international markets. The company has said it is aiming for steady improvements in profitability overseas this year.

“We believe our big investments in content are paying off,” Netflix said in a quarterly letter to shareholders.

Netflix is raising its marketing budget faster than revenue is growing and will spend about $2 billion this year. The company expects negative cash flow in 2018 of $3 billion to $4 billion, up from $2 billion in 2017.

Last October, Netflix raised prices for two of its three main subscription plans to help fund the substantial content investment. The earnings report showed customers took it in stride.

“Consumers are tolerant as long as something’s improving,” Netflix CEO Reed Hastings, on a post-earnings webcast, said of the price increase.

For the December quarter, Netflix reported diluted earnings-per-share of 41 cents, even with the expectations of analysts polled by Thomson Reuters I/B/E/S.

Revenue for the three months totaled $3.286 billion, in line with forecasts.

Looking ahead, Netflix forecast streaming customer additions of 6.35 million for the first quarter, above analysts’ expectation of 5.01 million, according to FactSet.

Investors appear confident in Netflix’s ability to grow. Netflix recently traded at 91 times expected earnings for the next 12 months, versus Amazon at 152 times earnings and Disney at 17 times earnings, according to Thomson Reuters data.

Netflix also said Monday that Rodolphe Belmer, CEO of global satellite company Eutelsat, had joined the company’s board.

  • Netflix takes $39 million charge after Kevin Spacey scandal

Reporting by Lisa Richwine in Los Angeles and Aishwarya Venugopal in Bengaluru; Editing by Peter Henderson and Lisa Shumaker

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"The real home run… comes when a… gold deposit is located, developed and mined"

New Jersey acquired the exploration and mining lease over the 218-acre Buckskin claim group for annual payments of $12,000 and a 2% NSR on future production.

CEO and president John Swallow said the NSR demonstrated the recognised value to nearby landowners of the company having an operating mine and mill within the district.

Striking it right in Guyana

Striking it right in Guyana

RESOURCEStocks Southern Gold QA: Simon Mitchell

RESOURCEStocks Southern Gold QA: Simon Mitchell

RESOURCEStocks QA: Westgold's Peter Cook

RESOURCEStocks QA: Westgold’s Peter Cook

“In my opinion, the real ‘home run’ from the lease comes when a mineable gold deposit is located, developed, and mined,” he said.

The company also staked about 700 acres of unpatented mining claims, giving it control of more than 4,500 acres along the historic mining belt.

Exploration vice president Rob Morgan, who was appointed mid-month, said the Buckskin addition demonstrated a number of characteristics found at Golden Chest.

The company produced 2,609oz and sold 2,564oz of gold in the first nine months of 2017 and recorded a net income of US$144,407 in the third quarter.

It developed and started the Golden Chest openpit last year and added an underground mine in the fourth quarter.

Shares in the company, which traded around US12c-13c for much of last year, were up 1.23% to 16.5c.

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Rapid Redbeard resource for Millennium

Both Redbeard and Golden Gate are at the company’s Nullagine project, which produced 72,800 ounces of gold in 2017.

The company is evaluating a significant upgrade of the Nullagine processing plant to support an expansion of its operations.

RESOURCEStocks QA: Mustang's Christiaan Jordaan

RESOURCEStocks QA: Mustang’s Christiaan Jordaan

PolarX marks its spot

PolarX marks its spot

Striking it right in Guyana

Striking it right in Guyana

80% Increase In Tonnage  Maiden Measured JORC Estimate

80% Increase In Tonnage Maiden Measured JORC Estimate…

The pure play cobalt vehicle

The pure play cobalt vehicle

Redbeard contains 245,700 tonnes at 2.6g/t gold for 20,600oz and the resource covers only 490m of the 2.1km known strike length.

CEO Peter Cash said the resource delivery in record time was an exceptional achievement by the exploration team.

Highlights from drilling at the Golden Gate mining centre intersected high-grade mineralisation below existing openpits, included 11m at 17.6g/t gold within 13m at 15.42g/t from 90m, and showed potential for future underground mining or pit cut-backs.

Cash said Millennium had an aggressive exploration commitment for 2018 with four rigs operating on multiple areas aiming to increase resources and support the expansion studies.

The company is scheduled to start mining this quarter at Nullagine’s first ever underground mine after announcing a 22% increase to the Bartons Underground mineral resource earlier this month and a maiden reserve of 270,000 tonnes at 4.5g/t gold for 39,000 ounces.

Millennium shares have traded between A14-34.5c over the past year and last traded at 18.5c intraday, capitalising the company close to A$150 million (US$120 million).

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Exclusive: Ackman cuts staff, shuns limelight as he seeks to turn around fund

BOSTON (Reuters) – William Ackman is cutting almost a fifth of staff and looking to lower his public profile as he seeks to turn around Pershing Square Capital Management after three straight years of losses, people familiar with the move told Reuters on Monday.

The billionaire hedge fund manager, who recently suffered big losses on Valeant Pharmaceuticals International Inc (VRX.TO) and Herbalife Ltd (HLF.N) and lost a proxy fight with Automatic Data Processing Inc (ADP.O), will spend more time investing and stop being the firm’s No. 1 marketer, the people said.

The first step in turning around Pershing Square is laying off 10 people, shrinking the firm to 46 employees from 56, to oversee the roughly $9 billion in assets the firm manages for clients, the people said.

That is about half the assets he had at Pershing Square’s peak in 2015. Most of the reduction will involve back-office employees, although one investment team member is also leaving.

Ackman also plans to go silent, at least for awhile, the people said, a major change in style for one of Wall Street’s most voluble investors.

The 51-year-old hedge fund manager, who made his name with winning bets on Allergan Plc (AGN.N), Canadian Pacific Railway Ltd (CP.TO) and others, became one of the world’s most visible activist investors through lengthy public appearances. He hosted hours-long conferences in Manhattan to answer every question about his short bet against Herbalife and his plan for drugmaker Valeant to buy rival Allergan.

Ackman plans to curtail all of his own marketing and public relations meetings associated with running a big hedge fund, said the people familiar with the matter, who were not authorized to discuss the changes publicly.

Instead, Ben Hakim, a partner who joined Pershing Square in 2012, will do the traveling and bulk of talking to clients. Ackman will stay in the office, concentrating on financial analysis.

Pershing Square spokesman Francis McGill declined to comment.


Ackman plans to announce the personnel changes and new direction on Thursday at the firm’s annual client dinner at the New York Public Library.

That dinner, and another similar event in London, will become the once-a-year chance for pension funds, endowments and wealthy investors to see and hear Ackman discuss performance and lay out his strategy, the people said. This time, Ackman will detail how his private funds lost between 1.6 percent and 3.2 percent in 2017.

For months, Ackman has been promising a comeback. In the first few weeks of this year, Pershing Square’s funds are up about 2 percent while the stock market has been setting new records, with the SP 500 Index gaining more than 5 percent year-to-date.

As Ackman’s fame and investing prowess grew over the years with successful bets on Canadian Pacific, General Growth Properties and Air Products and Chemicals Inc (APD.N), Pershing Square’s assets also grew. But investors traditionally pull 10 percent to 15 percent of capital from a hedge fund every year, making it more difficult for larger firms to keep replacing assets.

New clients often demand an audience with the boss, but Ackman has told people he is putting an end to that practice. He still plans to communicate with investors through letters and quarterly calls, and occasionally make public statements about investments.

Hakim and Pershing’s investor relations team will be available to handle day-to-day queries that Ackman previously spent a significant amount of time on.

In making the changes, Ackman wants the firm to operate more as it did in 2012, when he won a big proxy contest at Canadian Pacific, people familiar with the matter said. Pershing Square then employed 46 people and managed $11 billion. The firm’s staff peaked at 70 people in 2016.

One member of the investment team is among the job cuts, people familiar with the matter said.

David Klafter, a senior lawyer at the firm, will join the investment team to handle legal matters associated with the firm’s bets, which usually total only about a dozen.

Pershing Square’s investment team has historically had between eight and 10 members and will stay at its current size of 10 people, the people said.

Ackman also laid off his driver, saying he can walk or take the subway to his Midtown Manhattan office, the people familiar with the matter said. The staff were told the news of the layoffs late last week.

Reporting by Svea Herbst-Bayliss; Editing by Lauren Tara LaCapra and Bill Rigby

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What debt ceiling worries? Markets hum along

NEW YORK (Reuters) – Government shutdown? So yesterday. Debt ceiling? Yawn.

Investors and traders are taking in stride that the partisan fight in Washington which resulted in the first government shutdown in over four years may snowball into a showdown over raising the cap on how much the federal government can borrow beyond its statutory limit of $20 trillion.

Analysts and investors saw little chance Republican and Democratic lawmakers would allow a government default that would roil financial markets – even if the road to a deal to raise the debt ceiling will likely be a bumpy one.

“There may be a lot of noise, but a deal will be done,” said Sean Simko, head of global fixed income at SEI in Oaks, Pennsylvania.

Still, Monday’s proposed patch to reopen the government through Feb. 8 might mark the start of a high-stakes game when the government is expected to run out of cash by early April.

The U.S. government shutdown, combined with the possibility of a default, might be the catalyst that shakes investors’ confidence and pares their appetite for stocks and other risky assets, analysts said.

“If the two issues become linked, it will get the market a bit nervous,” said Gennadiy Goldberg, interest rates strategist at TD Securities in New York.

GRAPHIC-U.S. shutdowns on markets :

GRAPHIC-Rising U.S. debt burden :

Goldberg cautioned it is too early to tell whether Congress would rely on more temporary funding measures to operate federal agencies and pay government workers and contractors, or it could reach a bipartisan deal for a longer-term funding agreement.

“If they get a deal done before the debt ceiling deadline, that would be good for the market,” Goldberg said.


On Monday, Wall Street stocks opened slightly lower, the dollar hit three-year lows and Treasury yields were marginally lower. They all reversed course after a temporary funding plan was announced and moved toward a vote in the Senate.

The House of Representatives would also need to vote on the plan, and President Donald Trump would need to sign the measure before the shutdown can end.

“The market is barely reacting,” said Eric Stein, co-director of global income group at Eaton Vance Management in Boston. “The markets are getting desensitized when these things happen multiple times.”

Before the latest shutdown, government funding elapsed for 16 days in October 2013 during a standoff between conservative Republican House members in a bid to use the budget process to delay or defund the implementation of the Affordable Care Act, commonly known as Obamacare.

The most significant showdown on the debt ceiling was back in August 2011, which led the Standard Poor’s rating agency to strip its top-notch AAA-rating on the United States.

If the latest shutdown were to drag on, it would inflict damage on the economy in which thousands of federal workers would go on furlough and the government would suspend payments on discretionary expenses.

Morgan Stanley analysts estimated each week of a shutdown would subtract 0.2 percentage point from economic growth.

Rating agencies Fitch and Moody’s said a shutdown may hurt the economy but would not have an impact on their ratings on the world’s largest economy as long as it makes its debt payments on time.

Reporting by Richard Leong; Editing by Daniel Bases and Jonathan Oatis

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Icahn, Deason join forces to demand Xerox explore options

(Reuters) – Hedge fund managers Carl Icahn and Darwin Deason joined forces on Monday to push Xerox Corp (XRX.N) to explore strategic options, oust its “old guard”, including its CEO, and negotiate better terms for its decades-long deal with Japan’s Fujifilm.

Icahn and Deason – respectively the No.1 and No.3 Xerox shareholders with a combined stake of over 15 percent – plan to nominate four board members if their demands were not met, they said in a joint letter to Xerox shareholders.

Xerox shares were up 2.5 percent in late afternoon trading on Monday.

Declining demand for office printing has limited prospects of the 50-year-old JV, which is 75 percent owned by Fujifilm Holdings Corp (4901.T) and sells photocopy products and services in the Asia-Pacific region.

Chief Executive Jeff Jacobson is “incapable” of leading Xerox or negotiating a better deal with Fujifilm, while the company’s veteran directors “are unwilling to make the tough decisions necessary to prevent the Xerox ship from sinking,” Icahn and Deason said.

Three of Xerox’s 10 board members have held their post for more than a decade. Jacobson, who joined Xerox in early 2012, is also a board member.

In a statement, Xerox said: “The Xerox Board of Directors and management are confident with the strategic direction in which the Company is heading and we will continue to take action to achieve our common goal of creating value for all Xerox shareholders.”

The Wall Street Journal reported on Sunday Icahn and Deason were pushing the company to consider options, including selling itself.

Icahn’s interest in Xerox goes back to 2015, when he disclosed his stake and called the shares “undervalued”.

Jacobson became CEO in January last year after Xerox split itself in two. One part retained the legacy name and printer operations, and the other became a publicly listed business process outsourcing company called Conduent Inc (CNDT.N).

Since the split, Xerox has reported declining sales in every quarter.

Its shares have risen 38 percent since Jacobson took the reins, compared with the roughly 46 percent gain in the SP 500 technology index .SPLRCT over the same period.

But Xerox’s stock gains include a near 20-percent jump on the first trading day as the new Xerox.

The stock is also up about 7.5 percent since Jan. 10 when the Journal reported Xerox and Fujifilm were in deal talks that could include a change in control of Xerox, but not a full takeover.

Reporting by Muvija M in Bengaluru; Editing by Sayantani Ghosh and Savio D’Souza

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Facebook should pay ‘trusted’ news publishers carriage fee: Murdoch

(Reuters) – Media mogul Rupert Murdoch on Monday called on Facebook to pay “trusted” news publishers a carriage fee, similar to the model used by cable companies, amid efforts by the social media company to fight misinformation on its platform.

“Facebook and Google have popularized scurrilous news sources through algorithms that are profitable for these platforms but inherently unreliable,” Murdoch, who controls the Wall Street Journal as executive chairman of News Corp (NWSA.O), said in a statement.

Facebook Inc (FB.O) Chief Executive Mark Zuckerberg said on Friday his company would fight misinformation and sensationalism on its platform by using member surveys to identify “trustworthy” outlets.

“There has been much discussion about subscription models but I have yet to see a proposal that truly recognizes the investment in and the social value of professional journalism,” Murdoch said.

The quality of news on Facebook has been called into question after alleged Russian operatives and spammers spread false reports on the site, including during the 2016 U.S. election campaign.

Facebook and Google did not immediately respond to requests for comment.

Reporting by Munsif Vengattil in Bengaluru; editing by Sai Sachin Ravikumar

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Wall St. touches records as Senate deals to end shutdown

(Reuters) – U.S. stocks advanced on Monday as each of Wall Street’s main indexes touched a record intraday level after U.S. senators struck a deal to end the federal government shutdown.

U.S. senators voted to move forward on legislation that would reopen the federal government until Feb. 8. Funding legislation cleared a procedural hurdle in the Senate and was expected to pass a full Senate vote promptly, allowing government to re-open.

“The only way politics affects what the market does is if they end of having a negative impact on the economy and corporate earnings and so far that hasn’t been the case,” said Michael Arone, Chief Investment Strategist at State Street Global Advisors in Boston.

“The market has been more than willing to ride the tailwind of better global growth and higher corporate earnings, not only in the U.S. but globally.”

Earnings growth of 12.4 percent is expected for the quarter, according to Thomson Reuters data. Of the 55 companies in the SP 500 that have reported earnings through Monday morning, 80 percent have topped expectations, well above the 72 percent beat rate for the past four quarters.

The Dow Jones Industrial Average .DJI rose 65.67 points, or 0.25 percent, to 26,137.39, the SP 500 .SPX gained 13.41 points, or 0.48 percent, to 2,823.71 and the Nasdaq Composite .IXIC added 48.93 points, or 0.67 percent, to 7,385.31.

Halliburton Co (HAL.N) climbed 6.06 percent after posting a much bigger-than-expected quarterly profit in the fourth quarter, benefiting from a shale-driven surge in U.S. oil production.

The Nasdaq biotech index .NBI rose 2.83 percent and was on pace for its best day since June 21 after a flurry of merger activity in the sector with French drugmaker Sanofi (SASY.PA) and U.S.-based Celgene (CELG.O) splurging a combined total of more than $20 billion.

Shares in U.S. hemophilia specialist Bioverativ (BIVV.O) soared 61.69 percent after Sanofi agreed to buy the company for $11.6 billion.

Juno Therapeutics (JUNO.O) jumped 26.74 percent after Celgene agreed to buy the biotech for about $9 billion in cash.

In other MA news, AIG (AIG.N) said it would buy reinsurer Validus Holdings (VR.N) for $5.56 billion, sending the target’s shares up 44.18 percent.

Industrial stocks were one of the few laggards, as woes continued for General Electric (GE.N), down 0.82 after BofA-Merrill Lynch downgraded its stock. GE fell below $16 for the first time since 2011 and is down nearly 8 percent for the year.

Shares of Netflix Inc (NFLX.O), a major contributor to the recent stock rally, were up 2.25 percent ahead of its quarterly results after market closes.

Advancing issues outnumbered declining ones on the NYSE by a 1.38-to-1 ratio; on Nasdaq, a 1.10-to-1 ratio favored advancers.

The SP 500 posted 107 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 181 new highs and 14 new lows.

Reporting by Chuck Mikolajczak; Editing by Nick Zieminski

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U.S. says audit watchdog staff helped KPMG pass audit inspections

WASHINGTON (Reuters) – The U.S. government on Monday announced criminal and civil charges against three former staffers of an audit watchdog for allegedly providing confidential information to help accounting firm KPMG pass regulatory inspections.

Three ex-KPMG executives also were charged for encouraging disclosure of the data on Public Company Accounting Oversight Board (PCAOB) audit inspections, the U.S. Securities and Exchange Commission and Justice Department said in separate filings.

The incidents allegedly occurred between 2015 and 2017, the government said.

“These accountants engaged in shocking misconduct – literally stealing the exam – in an effort to interfere with the PCAOB’s ability to detect audit deficiencies at KPMG,” said Steven Peikin, co-director of the SEC’s enforcement division.

The government charged that the PCAOB and KPMG employees conspired to share information about which audits the watchdog would be reviewing, giving KPMG an opportunity to shore up those particular products before facing scrutiny.

The PCAOB is a private non-profit corporation that monitors the audits of public companies. The government alleged that KPMG was eager to boost its performance under PCAOB inspections, noting the company received roughly twice as many comments on its audits in 2014 than its competitors.

The company recruited and hired PCAOB staff, and the SEC said some of those hires took confidential information about planned inspections with them to their new jobs, or obtained information from former colleagues still at PCAOB who were seeking their own jobs with KPMG.

In a statement on Monday, SEC Chairman Jay Clayton called the charges “disturbing.” But he said he did not believe the improper actions compromised the integrity of the KPMG audits embroiled in the scandal.

Last year, KPMG said it had fired six people over the PCAOB leaks, which the company had identified and brought to the government’s attention. The company hired outside legal counsel to investigate the matter and took “remedial actions” to prevent a recurrence, KPMG spokesman Manuel Goncalves said on Monday in an email.

Peikin said the enforcement action was unrelated to a December shake-up of the PCAOB in which the SEC named a new head for the watchdog and four new board members.

Reporting by Pete Schroeder; Editing by Richard Chang and Paul Simao

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