einhorn, einh . this is "nightly business report" with tyler mathisen and susie gharib. brought to you in part by. >> thestreet.com, with stephanie link who shares her marketing picks with action alerts plus, the multi-million dollar portfolio she manages with jim cramer, you can learn more at thestreet.com. and apple slices, the company announces a rare slip, potentially broadi inening the stock's appeal to individual investors. tonight, the company's largest shareholder and the world's most famous investor, warren buffet, reveals the shocking way he voted. and sticker shock, the

plunge in home prices we have all that and more tonight on "nightly business report" for wednesday, april 23rd. good evening everyone, i'm susie gharib. and i'm bill griffith in for tyler mathisen. we begin with huge news for apple which just released the second quarter earnings, now announcing plans to buy back shares, raising the dividends by 8%. and then the surprise, a 7 for 1 stock slip which would make shares about $7 apiece. apple beat wall street estimates by taking in $11.62 a share, with profits up 7%, revenues also beat on sales of iphone, but sales of ipad tablets were below forecast. shares were halted in late trade on apple pending release, but when they opened after the close

shares initially soared by about 7%, josh lipton joins us outside headquarters in cupertino, california, and also spoke to ceo tim cook earlier today. josh? >> reporter: yes, here in cupertino, california, i did get the chance to speak to ceo tim cook this afternoon just to run through the numbers, apple reporting, certainly pleasing investors 43.7 million iphones. that was more than the street was looking for and tim cook told me it was really broad based there, good sales, strong demand he also said from china mobile. tim cook also told me listen, we realize we have more money than we need. so we see apple extending the program over $130 billion, increasing the re-purchase authorization to 90 billion, boosting the dividend to 18%. and as you mentioned bill, all this announcement for the 7%

stock split. and tim cook telling investors who want to own apple shares, he wants stock to be as accessible as apple products. and analysts and traders certainly want to hear more about new products and what is on the way. tim cook says he is not ready to give more clarity on new products and services. but there are pipeline products that he is excited about. all the cash they're sitting on, what about acquisitions? listen, tim cook says they have done a lot of acquisitions in the last 18 months and he is on the prowl to do more. back to you. thank you so much, josh lipton, joining us to talk more about apple, max, what do you think of all of this? i mean, here we have a big stock split. you have got big stock buy back

and a dividend. does this make apple the darling of wall street again? >> thanks for having me, susie, always a pleasure to join you, i think certainly we see apple making a lot of efforts to appeal to investors. historically apple had such appeal they sort of sat back and let the adoration pour in. they're buying back shares and splitting them to make them about $75 each. and they're giving them every indication, those who wait it out with them, during a period where they release fewer new whiz bang products whether it is phones or tablets, will be richly rewarded by a company who continues to sell an unbelievable amount of premium products and has continued to have an historical brand, increasingly in their new partnership with china mobile, the absolute status brand in china. the largest and most fast growing of the major markets.

later today, carl icahn who has been on tim cook's case about the buy back tweeted out he was pleased with the results. with the buy back, the stock split, but with a gentle prod says he will also be happy when he sees more products from apple. something i know you agree with, right? >> absolutely it is a good point. we should remember he was prodding for a huge buyback, and what we saw was the largest company becoming even bigger. so he is pretty happy about that. that being said, apple has phones, $750 for the 5, about to be the 6, the big story for apple if they could sell basically small phones, how many full size phones can they sell and the good news is we'll get a look at that with the 5.4" models that they expect to come out with in q4 and it couldn't

be a moment too soon. the sooner the better. >> as you know, max, tim cook is not good about giving out clues about what the big bang products might be. we all know about the phones but what do you think that investors and consumers need to see come out of apple to make the success story of apple long-term? >> so i think consumers need to see apple as a very profitable massive company with one of the most valuable brands in the world, that is trading in a pretty appealing valuation. against many of their peers, none of who are that profitable, still at a discount, lower multiple to earnings and sales. it is fairly reasonably priced even if all their gadgets are not. i think we have to see one other thing. we have to see apple take the sort of leadership position again. possibly with mobile payments. they have a chance there because the fingerprint reader that is on the 5 s phone now, the top of

the line cell phone now that is going to be on the new models as well, we think, give them a chance to allow people to make really easy transactions the way we've gotten used to in the itunes e-verse and now, with the phone as fingerprint reader and validater. >> all right, a lot of good things coming hopefully. max, thank you so much for joining us, max wolf. and at the closing of the bell tonight, facebook topped wall street estimates thanks this time to mobile ad sales which now account for about 59% of total ad revenue. and a boost in daily average users now over 800 million people every day on facebook. the social networking giant took in 34 cents a share, and easily beat the forecasts of 24 cents. revenues saw a slight beat at $2 and a half billion. shares rose a percent in after

hours trading today. well, a down day on wall street as the major stock indexes broke the numbers. there was weaker than expected revenue from dow at&t. shares of the telecom giant tumbled 4, the dow lost 12, the s&p 4. and shares at boeing up 2 and a half percent thanks to a huge jump in commercial deliveries and much better than expected quarterly earnings. boeing has a back log of 5,000 orders for new jets and not surprisingly it raised the earnings forecast. and executive pay the hot topic at the annual coca-cola meeting today, a controversial plan was up for a vote and lucky for coke, shareholders overwhelmingly passed it, also electing all 15 nominees for the board of director. now, the plan which will

generously pay coke managers if they set performance goals raised a lot of eyebrows with big shareholders earning saying it will transfer $13 billion to management in four years, even warren buffet, one of coke's biggest shareholders disapproved of the plan deciding not to vote today. >> we abstained because we didn't agree with the plan. we thought it was excessive. and i love coke, i love the management and the directors. but -- so i didn't want to vote no. kind of unamerican to vote no at a coke meeting. but they -- i didn't want to express any disapproval of management. but we did disapprove of the plan. >> coke shareholders today also voted down a approval that would require an independent board chairman. meanwhile, warren buffet rejected suggestions today that the u.s. stock market is too

frothy. >> stocks ought to be higher every ten years, i mean there is a plow back of earnings every few years, stocks become more decade after decade not in any precise manner or any manner or resort. but ten years, 20 years, 30 years, stocks will be worth more than they are today. >> mr. buffet said even though the stock prices are up it does not automatically mean that they are over-priced. he made the comments at a lunch today dining with the winners of last year's charity auction. turning to the u.s. economy, a real setback in the housing recovery. sales of newly built homes plunged in march falling more than 14%. those disappointing numbers combined with weaker than existing sales of homes last month are a real blow to the traditional start of the spring real estate season. >> reporter: it is as blatant as the spring blossom. home buyers are facing sticker shock. the price of a newly built home

in march soared to a record-high $290,000, almost in direct response, sales volume dropped 14% to the lowest level in eight months. how could it happen? the hold builders raised prices throughout much of last year because there was so little on the market to buy and because existing home prices were rising as well, thanks to all-cash investors. now as fewer foreclosures come to the market investors pull back and construction holds well below historical norm. sales cannot match the hype nor the hope for the spring season, tight credit is not helping either. >> lending standards a praisal policies are hurting the recovery of the entire housing market. >> first-time home buyers continue to be side lined, hit particularly hard by the combination of tough credit and higher prices. but there may be more to their absence than that. >> you have people that are more

comfortable living with their parents for longer. you have people that would rather rent, they're not interesting in owning like previous generations. >> much of the activity in housing today is coming from a smaller pool of buyers on the high end of the market. they have the cash and the credit to play. the rest of the market, which is the bulk of potential buyers are faced with that toxic cocktail of both high prices and a high barrier of entry for getting a mortgage. for "nightly business report," i'm diana oleg in washington. and amazon seals the deal to stream some older and very popular hbo shows. but will netflix be the one to pay the price? that story next. app

. well, the battle to stream video into your living room just ramped up a bit with a breakthrough deal that could help amazon prime take on industry giant netflix. morgan brennan has more tonight. >> hbo striking a license deal with amazon marking the first time hbo has ever allowed its content to be streamed by an on-line video provider, it means that private subscribers will get access to tv shows like the sopranos and fix feet under. but you can't watch movies like game of thrones. competitors like netflix can't ink a similar deal. this marks a shift for hbo which has clung to a premium model where viewers had to subscribe to cable or pay more for digital downloads on platforms like

itunes. >> i think these guys like money margins better than they care about their entities. just like others program to each other, have their networks and are selling to each other's networks that is the dynamic that will be involved here. >> the new announcement shows prices will tumble. while the agreement with hbo is certainly a win for amazon the company still has a long way to go before it gobbles up market share. according to broad bandçó equipment provider, netflix accounted for more than 30% of all video streaming during prime viewing hours during 2013. amazon, less than 2%. for "nightly business report," i'm morgan brennan in los angeles. and shares of delta soared after the airline posted better than expected earnings and gave an upbeat guidance, and that is where we begin tonight's market focus. the airline's earning beat came despite the fact it had to cancel more than 17,000 flight

because of bad weather during the quarter. it lost $90 million in revenue because of those cancellations. but the stocks still popped 6% to $37.09. dow chemicals cost cutting efforts helped it drive a 65% increase in its first quarter. the chemical maker sawp'ñx[á m expand in its units that make coating, plastics and crop protection products. and the ceo said the economy is helping to grow some of dow's business. shares rose to $31.47. meanwhile, the reports that starbucks may buy stocks in soda stream, last month there were reports that it would sell a stake of itself to a large beverage company. now the reports are that starbucks is that company and wants a 10% stake in soda stream, as we said, up 10%,

closed at $77.04. and znga reports a lost, the game-maker's revenue passed expectations. also the company's founder, mark pinkus will step down and remain as chairman. shares of znga rose in the after-hours session. and shares of valiant and allergan are also getting a lot of attention today. there are fresh questions about the hostile takeover valued at around $50 billion. and it is not only that the offer came from the unlikely team of bill ackman and the canadian drug maker, valiant pharmaceuticals but also the way the offer came to be. >> it is an unusual case where a hedge fund partners with a company. that is what happened with

valiant. now, the unlikely partnership happened this year, ackman and michael pearson struck up a pact on allergan. that happened on the 25th. and you're seeing a stock price here, a purchase of 174,000 shares kicked things off. then 122,000 shares the next deal, working out to be $76 million worth of allergan shares in just two days, ackman switches up the strategy and starts to buy options to increase his share of the stock at allergan. by april 11th, he controlled over 5% of the stock which was important because it meant that ackman had to tell regulators about this position within ten days. but he didn't stock there. he kept buying the options and had a stake by april 21th, for your numbers fans out there that is a 9% worth at allergan's

stake, on the day that they announced the hostile bid. a takeover like nothing we've ever seen before. and that is what makes it snow unique. and a potential deal described as bold, raising questions about the potential conflict of interest. but no matter how it is described or the types of questions it has raised we need to point out that this maneuver is legal. and today, bill ackman defended teaming up with valiant. he insisted there is no frontrunning or insider trading involved. >> the way the rules with, you're actually permitted to trade on insider information as long as you didn't receive the information from somebody who breached the fiduciary duty or confidentiality, et cetera. what we did was say if you can help us acquire allergan we would like to work with you. we said great, we formed a

partnership with various terms and gives us the&@nyñ right and position to go buy stake in allergan. >> allergan has adopted a so-called poison pill. a shareholder rights claim that prevents them from buying more shares in the company as the board gets more time to consider whether to reject or get more information on this bid. let's explore a little bit more whether bill ackman's stake in allergan is legal or illegal. let's turn to a former lawyer with the fcc, so adam, is this insider trading and if not, should investors be troubled0]% that it is legal? >> it is trading on inside information, but the securities laws prohibit fraud not trading on inside information. because mr. ackman got the information from valiant, not

allergan, it is not fraud. so the -- mr. ackman knows more than other investors in the market? but he got the information legitimately from valiant. >> but you have to admit, it smell s bad, back in the '80s, e got information on others who attempted to buy the company, shares would pop, company would buy those shares back from that person. we call that green mail, i'm not saying that is where bill ackman is going with this, but there is a precedent on him making a bid, and profiting. is there a need for a new rule to prohibit that kind of trading? what do you think? >> well you mentioned in your lead-in to the story that the green mail practices of the '80s, part of the reaction to that was the innovation of the poison pill, which protects companies to a considerable

extent from having to pay green mail. once they have adopted the poison pill they can sit still and ignore mr. ackman if they do not want to proceed with the merger. so the question would be whether investors should be entitled to know about large accumulations of stock being assembled by activist investors. the sec has had the authority to require disclosure faster than it currently does. it now says ten days after you pass the required trigger the sec has the authority to shorten that period but they have never exercised it including during the '80s when a lot of people would have favored that move. >> do you think they will make a change on that calendar date, and also related to that if they don't is this trend of activist investors teaming up with corporations who do perhaps hostile takeovers, is this good or bad for the individual

investor? >> so will the sec act? my guess is probably not. they have had over 40 years to act in similar trends before and they didn't act. so i would be surprised if they did now. for individual investors, this cuts two ways. yes, they would like to know when activist investors are accumulating large blocks of stock. but there is an important effect from hostile takeovers in disciplining management, right? the companies that are subject to hostile takeovers are the ones that have under-performed in some way. and if that threat is hanging over every public company it is not just the activist investors who can profit from that. but the average retail investor benefits if public companies are run better because executives are afraid of a hostile

takeover. >> well, it is a whole new interesting conversation i'm sure we'll hear more about. thank you so much, adam, adam pritchett. and coming, do you want to follow the herd into stocks? when the market stumbles are you ready to get out? advice on long-term financial goals coming up. retirees looking to safeguard their money and stretch out their nest egg in the next few years of course are hit with a variety of analysis and coverage.

so how do you cut through all the clutter and formulate a retirement plan and stick with it? sharon epperson takes a look tonight. >> reporter: it is easy to get caught up in market girations, but analysts say people get overly williamspoover ly worried. >> we tend to get very scared or happy when the market is high or low. >> emotions can unravel your investment strategy but only if you act on them. with a barrage of information from your television or internet, how do you cut through and make a sound strategy? begin by formulate a sound financial plan and stick to it. >> if you have a financial plan you should stick to it, probably lowering your equity rate when everybody is the most

enthusiastic about the stocks, and waiting at the trough when everybody is most scared. you should stick to that plan. >> reporter: look for investment nuggets that may go against consensus. >> one has to recognize the whole point of investing is finding something that other people don't know. so if you're just reading a research report, or you're listening to an analyst on tv or your financial adviser comes to you with a story and it is a story, how is that view different from consensus? that one step of looking for the little nugget, what has the person found that everybody else has not will allow you to eliminate probably 98% of the investment ideas that are thrown at you because most of them are just stories. >> reporter: remember that you're saving and investing for the long haul, your retirement may be decades away. and even if you're recently retired your nest egg may have to last ten to 20 years so don't

take too much risk even when the market is soaring or panic and take all your money out on a big dip. >> 2008 was a big lesson for most of us, if you hung on and didn't sell and didn't panic, you have more money. but people who stayed in and continued to invest are the ones who did the best. >> bottom line, stay invested but don't expect all the news about the financial markets and investments today to necessarily guide future performance. for "nightly business report," i'm sharon epperson. >> and that is "nightly business report" for studetonight. i'm susie gharib, thanksgiv tha for for joining us. >> i'm bill griffith, have a great evening.

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