Jet plunges over 31% after suspension of all flights. Mindtree announces dividend payout worth INR530cr. Microsoft unveils digital-only Xbox. Pinterest prices IPO at $19 per share. FCC Chairman opposes China Mobile’s bid to enter the US. Amazon to shut down Chinese marketplace business. Apple sued in the US for concealing a slump in demand for iPhones.
Moving on to the top Business stories of the day.
Jet plunges over 31% after suspension of all flights. Gitanjali Gems headed for liquidation.
Nose-Dive: Jet stock plunged over 31% as the domestic carrier temporarily suspended all flights with no cash to run operations any further.
However, the lenders said that they are reasonably hopeful of a successful bidding process for stake sale.
No Rescue: The bids received for Jet Airways will be opened on May 10. However, if none of them are accepted by the lenders, then the airline will be taken through bankruptcy proceedings.
Jet’s fall is a story of the fall of its founder. Read the story of the rise and fall of India’s oldest private airline here.
Paradise Lost: The Committee of Creditors to Gitanjali Gems, promoted by Mehul Choksi, has decided to liquidate the company to recover dues worth INR12,558cr it owes to 31 banks and financial institutions.
Meanwhile: Choksi is in Antigua and facing extradition over the INR14,000cr PNB fraud along with his nephew Nirav Modi.
The development comes after the CoC failed to approve extensions for a corporate insolvency resolution process.
In six years, Gitanjali Gems has gone from being one of the best known jewellers to facing liquidation. More on how it all unraveled here.
Mindtree announces dividend payout worth INR530cr.
Celebratory Cheers: Mindtree on Wednesday announced interim, final and special dividends for its shareholders, totalling INR27 per share, subject to approval by shareholders.
If the dividend proposal receives approval from shareholders, Mindtree will pay a total dividend of INR384cr to the public shareholders, with the special dividend of INR285cr. The promoters will get INR60cr.
This is the highest ever dividend announced by Mindtree since its inception two decades ago and have been declared to commemorate completion of 20 years of the company’s operations apart from crossing the $1bn revenue milestone in the last financial year.
Ward Off Evil: The move comes shortly after L&T announced its plan to launch an open offer to buy an additional 31% in Mindtree after agreeing to purchase Café Coffee Day founder V.G. Siddhartha’s 20.32% stake in the firm. L&T also said it would buy 15% stake in Mindtree separately from the open market. This would see L&T buy up to 66.32% in Mindtree
To Buy or Not to Buy: While some speculate that the payout may push up the acquisition cost for L&T, others have noted that the special dividend does not move the needle much for investors and that “those who want will still tender.”
Microsoft unveils digital-only Xbox.
No Discs: Microsoft has unveiled its Xbox One S All-Digital Edition. The device would be available starting May 7 for $249.
Xbox One S All-Digital Edition has been designed for "digital natives", in particular, people who buy most of their stuff over the internet, including video games.
Bonus: The Xbox One S All-Digital Edition will come pre-loaded with three games — Minecraft, Forza Horizon 3 and Sea of Thieves.
Read more on how Microsoft's gaming comeback is on the way here.
Pinterest prices IPO at $19 per share. FCC Chairman opposes China Mobile’s bid to enter US.
Aiming High: Image sharing platform, Pinterest has priced its initial public offering at $19 a share, above its original proposed price range of $15 to $17 a share.
The strong demand for the IPO will perhaps ease investor concerns about the stampede of tech unicorns racing to go public this year after Lyft's somewhat lackluster debut. More on this here.
Block the Move: Federal Communications Commission (FCC) Chairman Ajit Pai said that he opposes a bid from China Mobile to provide telecommunications services in the US. The FCC will vote on the company’s application next month.
China Mobile had filed an application in 2011 to offer international calling services in the US. The proposal had undergone a lengthy review by federal national-security officials.
“...it is clear that China Mobile’s application to provide telecommunications services in our country raises substantial and serious national security and law enforcement risks...therefore, I do not believe that approving it would be in the public interest”, noted Mr. Pai.
Amazon to shut down Chinese marketplace business, focus more on India. Apple sued in US for concealing a slump in demand for iPhones.
Shutting Down: Amazon is set to shut down its Chinese marketplace business in July as it shifts its focus to offering mainland consumers overseas products rather than goods from local sellers.
The move is perhaps suggestive of Amazon’s struggle to contend with local players such as Alibaba and JD.com.
Amazon will keep running its other businesses in China, including Amazon Web Services, Kindle e-books, and cross-border operations that help ship goods from Chinese merchants to customers abroad.
Sued!: A lawsuit filed in the US has alleged that Apple violated the country's Securities Exchange Act by hiding a slowdown in the demand for iPhones, especially in China.
The lawsuit claimed that Apple knew in November its iPhone sales were hit, but refrained from revealing it to investors then, leading to loss.
The lawsuit seeks class-action status, to bring in everyone who bought Apple common stock between November 2, 2018 and January 2, 2019.
The suit alleged that Apple and Cook's "materially false and misleading statements" in November propped up the company's stock, "which continued to trade at artificially inflated prices".
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