Some of NextCard’s 800,000 customers may be surprised when they try to swipe their Visa cards Wednesday when federal regulators are closing all accounts as a result of the online credit card issuer’s financial failure.
Regulators had been trying to sell the accounts for more than four months. The FDIC struck a deal last week to sell about 200,000 NextCard (NXCD) accounts to Merrick Bank for $126 million. Merrick Bank, a subsidiary of CardWorks, will take over the 200,000 accounts by the end of September.
With the decision to close the remaining 800,000 accounts, the taxpayer-backed FDIC expects to lose $300 million to $400 million on the failure of NextCard’s bank.
All customers with closed accounts will be required to pay off their outstanding balances under the interest rates previously in effect. The FDIC didn’t disclose the total loans outstanding in the closed accounts. NextCard’s total loans outstanding during 2001 averaged $1.9 billion, including the 200,000 accounts being sold to Merrick Bank, according to SEC filings.
Nokia makes a deal: Nokia (NOK) said Japanese rival Matsushita (MC) will buy its software for smartphones, which send e-mails, pictures and play games, boosting the world’s largest handset maker’s software position.
The deal is another victory for Nokia as it moves beyond handset manufacture into software design. In May it signed up Germany’s Siemens (SI) to buy its mobile software.
It also deals a blow to Microsoft’s (MSFT) ambitions to crack the software market for mobile phones.
Possible Streaming merger: VoiceStream Wireless, controlled by Deutsche Telekom (DT), is in talks to merge with AT&T Wireless Services, a move that would create the second-largest cellular phone company in the United States, The Wall Street Journal said.
Those close to the current talks say executives from VoiceStream and AT&T Wireless (AWE) have been discussing a deal that would combine the companies and make VoiceStream the dominant shareholder, the paper said.
Citing people involved in the discussions, the paper said any deal could be valued at $10 billion, though it emphasized talks are “very preliminary” and may not result in any merger.
Hynix rebuffs Micron: Hynix Semiconductor said it was not in sale or merger talks, a day after rival Micron Technology said it was open to restarting negotiations with the troubled South Korean chipmaker.
Hynix shares surged after Micron CEO Steve Appleton suggested a landmark deal between the two companies remained possible.
Hynix shares rose by a daily 15 percent limit to $0.57 and have jumped 233 percent in the last nine sessions on retail buying ahead of a restructuring plan due this month.
But analysts question cash-strapped Hynix’s ability to stand alone as rivals Micron (MU), Samsung and Infineon Technologies (IFX) invest in smaller, more profitable geometries (chip-cutting technology) that produce more chips per wafer.
Media monopoly?: Media firm tom.com said it may raise its holding in Hong Kong’s No. 2 TV broadcaster Asia Television, a day after agreeing to buy a near one-third stake in a deal that shook shares in the sector.
Tom.com said it had agreed to buy a 32.75 percent stake in ATV, which operates one Cantonese and one English channel and is a distant No. 2 in Hong Kong to Television Broadcasts. The deal includes half of ATV’s website.
However, analysts said approval for the acquisition could take up to a year because tom.com must obtain a cross-media waiver, since tom.com’s controlling shareholder and Asia’s richest businessman, Li Ka-shing, owns a local radio station, Metro Radio.
The government said tom.com’s purchase would breach Hong Kong rules forbidding excessive control of the media by one party, and it will need a special exemption from the city’s chief executive before it could proceed.