Morning Coffee – Bank of America, Sirius XM & Microsoft


This morning we look at financials and feature Bank of America ( BAC ) as company of the day. The bank settled with a group of investors regarding losses on loans originally worth $105 billion. This settlement also covers loans totally $424 billion and so the $8.5B payout (around $5 billion after tax breaks) seems small compared to some early estimates that reached $50 billion. The stock has suffered in recent weeks in part due to concerns on this payout, and so this removes a major overhang on shares. We also look at Sirius XM (NYSE:SIRI) content acquisition cost as it pays out around $200 million annually to dealers like Ford ( F ), GM ( GM ) and others. Finally we take a look at Microsoft (NASDAQ:MSFT) Office as our quiz of the day.

Company of the Day - Bank of America

Bank of America is one of the leading financial institutions in the U.S. and provides a range of products and services like credit cards, mortgages, auto loans, commercial loans, investment banking services and wealth management. Its announcement today settles a longstanding fight between large investors that have invested in mortgage deals of Bank of America as well as Countrywide and Merrill Lynch, which the bank acquired in 2007 and 2008 respectively.

See our full analysis here

Forecast of the Day  - Content Acquisition Costs

The number of Sirius XM's (NASDAQ:SIRI) automotive subscribers has been rising consistently over the past few years led by an increase in light vehicle sales in the U.S. as well as new vehicle penetration. We recently wrote how strong automobile sales have helped Sirius XM increase its subscriber growth by 9% y-o-y in Q1 2011. (See Strong Auto Sales Drive Sirius XM Subs Growth) We believe Sirius XM's automotive subscribers will continue to grow aided by the long-term deals signed with big auto-makers like General Motors ( GM ), Ford ( F ), and Hyundai. The global economic recovery and tax incentives will also boost car sales thereby benefiting Sirius XM.

See our full analysis here

Quiz of the Day  - Microsoft

Steve Ballmer, Microsoft CEO, recently unveiled its new online version of Office. How much does Office contribute to Microsoft's stock?

  1. 47%
  2. 57%
  3. 37%
  4. 27%

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Investing Ideas , Stocks , US Markets

Referenced Stocks: BAC , C , F , GM



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