News that Yahoo and AOL are in deal talks fired up the technology sector Thursday morning, lifting the Nasdaq and keeping the broader market in the black, despite some dour March retail sales.
European Central Bank President Jean-Claude Trichet warns of “strong, upward short-term inflation pressures," after ECB policymakers vote to leave the bank’s key interest rate unchanged at 4%.
NEW YORK (Reuters) - The Nasdaq composite index jumped 1 percent on Thursday as shares of Apple Inc rose following positive brokerage comments on Apple's profit outlook, but other major indexes were little changed due to concerns about the economy.
Dr. Arlyn Scherbenske, a veterinarian on the sparsely populated plains of North Dakota, is directly responsible for the health of every dog, cat, sheep, horse, cow and canary within a 45-mile radius
NEW YORK (Reuters) - An early Easter holiday, chilly weather and recession-wary consumers combined to deliver dismal March sales results for U.S. retailers.
Rite Aid Corp. shares dropped 8% on Thursday after the drug-store chain swung to a fourth-quarter loss and warned that this fiscal-year results are tracking below Wall Street targets due to the “challenging economic environment.”
Interest rates are cut to 5% from 5.25% by the Bank of England to shore up the UK's slowing economic growth. Source: BBC News | Business | World Edition | 10 Apr 2008 | 2:43 pm
NEW YORK (MarketWatch) -- Energy stocks fell in early action Thursday, pulling back as crude-oil prices edged down from their record high above $112 a barrel in the previous session.
Faced with tight credit conditions, falling home prices and slumping consumer confidence, the Bank of England on Thursday cut its key interest rate by a quarter of a percentage point, to 5%.
Struggling airline Silverjet says it is in takeover talks with unnamed suitors, sending its shares up 36%. Source: BBC News | Business | World Edition | 10 Apr 2008 | 2:41 pm
The High Court rules that the SFO acted unlawfully by dropping a corruption probe into a £43bn Saudi arms deal. Source: BBC News | Business | World Edition | 10 Apr 2008 | 2:40 pm
SAN FRANCISCO (MarketWatch) – Crude futures fall after hitting a record high of $112.21 in the previous session, as government data showed U.S., the world’s largest oil consumer, imported less oil in February.
LONDON/NEW YORK (Reuters) - Lehman Brothers Holdings Inc has liquidated three floundering investment funds that lost value and ended up taking $1 billion of assets onto its balance sheet, according to a filing with the U.S. Securities and Exchange Commission.
Retail shares were holding up well in early Thursday action even after generally disappointing March same-store results – especially among those chains reliant on discretionary purchases.
The euro falls from its new record high against the dollar after the European Central Bank holds its benchmark steady. The Chinese yuan hits a new high against the greenback.
Wall Street stocks were mixed morning as improved profits forecasts from Wal-Mart played against fears that first-quarter corporate earnings will take a pummelling after a run of poor results and rising oil prices Source: FT.com - US homepage | 10 Apr 2008 | 2:35 pm
Federal-Mogul Corporation (OTCBB: FEMO) has recently exited from bankruptcy, and has traded OTC on the Bulletin Board since. Today, the company has announced that it will leave the OTC market and head over to the NASDAQ Global Market on April 23, 2008. Its new proposed stock ticker symbol will be "FDML." Federal-Mogul also recently announced that it will report its first quarter 2008 results on April 22, 2008. Since emerging from bankruptcy, this has traded in a range from 418.00 to $27.00, and shares closed yesterday at $19.40. Because of acquisitions made, this company ended up with something to the...
US Treasury Secretary Henry Paulson says that the economy has "turned down sharply". Source: BBC News | Business | World Edition | 10 Apr 2008 | 2:27 pm
AP - Rite Aid Corp., the nation's third biggest drugstore chain, reported Thursday that it lost $960.4 million in its fourth quarter, mostly the result of a non-cash income tax charge, as it worked to absorb more than 1,800 stores acquired last year. Source: Yahoo! News: Business | 10 Apr 2008 | 2:23 pm
WASHINGTON (Reuters) - The U.S. trade deficit widened unexpectedly in February as imports of consumer and other goods set a record and grew faster than exports, which hit a record for the 12th consecutive month, a U.S. government report showed on Thursday.
Reuters - Stocks were little changed on Thursday
as reports of sluggish sales at major retailers heightened
concerns about the economy's health and the impact of the
housing slump on consumers, offsetting Wal-Mart Stores Inc's
raised outlook.
The 2007 Glastonbury Festival generated more than £73m, according to a report into the economics of the event. Source: BBC News | Business | World Edition | 10 Apr 2008 | 2:05 pm
City experts welcomed the Bank of England's decision to cut interest rates by a quarter point to 5pc today but warned homeowners against premature celebrations as the reduction is unlikely to feed through to mortgage rates quickly. Source: Telegraph Business | 10 Apr 2008 | 2:05 pm
It's tough to watch your funds losing value in a tough market, but cashing out an IRA before you've reached retirement age is going to hurt you even more.
WELLINGTON/TOKYO (Reuters) - Airlines lined up on Thursday for compensation after Boeing Co announced a further six-month delay for its new 787 Dreamliner plane.
Japan's largest drugmaker offered $8.8bn in cash to acquire Millennium Pharmaceuticals, a US biotechnology company with an approved cancer drug, in the biggest foreign acquisition by a Japanese pharmaceutical company Source: FT.com - US homepage | 10 Apr 2008 | 1:56 pm
The UK's leading economic and business commentators give their reaction to the Bank of England's decision to cut interest rates by 0.25pc to 5pc. Source: Telegraph Business | 10 Apr 2008 | 1:55 pm
(Reuters) - Rite Aid Corp , the third-largest U.S. drugstore chain, posted a fourth-quarter loss due to a big tax charge and merger-related costs, and forecast 2009 results below market estimates, sending its shares down almost 7 percent.
The US trade deficit widened unexpectedly in February, according to the Commerce Department. Source: BBC News | Business | World Edition | 10 Apr 2008 | 1:29 pm
TOKYO (Reuters) - Takeda Pharmaceutical Co Ltd agreed to buy U.S. firm Millennium Pharmaceuticals Inc for $8.8 billion to boost its cancer drug business, in the biggest overseas acquisition by a Japanese drugmaker.
SAN FRANCISCO/NEW YORK (Reuters) - Yahoo Inc, which was widely believed to be running out of alternatives to accepting Microsoft Corp's takeover offer, has become a target of two warring camps of technology giants and their media allies, sources said on Wednesday.
The Serious Fraud Office (SFO) is considering whether to appeal against a High
Court judgement today that ruled it "acted unlawfully" when it
dropped an investigation into bribery and corruption in arms deals between
BAE systems, Europe's largest defence company, and Saudi Arabia. Source: Latest Business News from Times Online | 10 Apr 2008 | 1:22 pm
Millennium Pharmaceuticals Inc. (NASDAQ: MLNM) is being acquired. Takeda Pharmaceuticals in Japan is paying some $8.8 Billion to acquire the biotech, which had a market cap of $5.3 Billion as of yesterday. The cash buyout will come at $25.00 per share, roughly a 50% premium to Wednesday's $16.35 close. Its 52-week trading range was $9.49 to $17.19. This is also more than a 25% premium to any prices this one has seen over the last 5-years. This acquisition will help Takeda go from heart and diabetes into more of a cancer treatment, which will further diversify its operations. Analysts expect...
Reuters - The U.S. trade deficit widened
unexpectedly in February as imports of consumer and other goods
set a record and grew faster than exports, which hit a record
for the 12th consecutive month, a U.S. government report showed
on Thursday. Source: Yahoo! News: Business | 10 Apr 2008 | 1:17 pm
Reuters - The U.S. trade deficit widened
unexpectedly in February as imports of consumer and other goods
set a record and grew faster than exports, which hit a record
for the 12th consecutive month, a U.S. government report showed
on Thursday. Source: Yahoo! News: Business | 10 Apr 2008 | 1:17 pm
I think that the continued problems in the financial markets and the associated tightening of credit conditions will mean that todays 0.25pc cut in interest rates to 5pcis another step towards rates eventually... Source: Infocious RSS raw feed - channel BNPaperBusiness | 10 Apr 2008 | 1:15 pm
I think that the continued problems in the financial markets and the associated tightening of credit conditions will mean that today’s 0.25pc cut in interest rates to 5pcis another step towards rates eventually falling to 3.5pc. Source: Telegraph Business | 10 Apr 2008 | 1:15 pm
Stocks faced a flat start as the fight for Yahoo heated up. Wal-Mart raised its profit plan after a dismal month for most retailers. High jobless claims didn't curb consumers' appetite for imports.
WASHINGTON (Reuters) - The number of U.S. workers applying for unemployment benefits tumbled by a greater-than-expected 53,000 last week, but a closely watched moving average of claims was at its highest in two and a half years, a government report showed on Thursday.
AP - Sharper Image Corp. says its chairman Jerry W. Levin will resign to pursue a possible acquisition of the beleaguered specialty electronics retailer. Source: Yahoo! News: Business | 10 Apr 2008 | 1:10 pm
Wall Street stocks were set for a lower start on Thursday as a run of poor results and forecasts and rising oil prices stoked fears that first quarter earnings will take a pummelling.Less than an hour... Source: Infocious RSS raw feed - channel BNPaperBusiness | 10 Apr 2008 | 1:10 pm
Many have been hoping that the bloodletting in the aisles of Chico's FAS inc. (NYSE: CHS) is coming to an end. If that is the case, it isn't evident in the numbers yet. The womens retail and apparel chain posted a decrease in same store sales at -20.7% for the five-week period ended April 5, 2008. It claims that without the effect of Easter this season, same store sales would have been down in the 18% to 19% range. March total sales results for the five-week period ended April 5, 2008, decreased 15.2% to $162.1 million from $191.2 million. Chico's...
Takeda Pharmaceutical announced an $8.8 billion bid for the U.S. biotechnology company, an all-cash offer that would give Japans top drug maker a key cancer treatment. Source: Infocious RSS raw feed - channel BNPaperBusiness | 10 Apr 2008 | 12:59 pm
Shares in DSG International fell sharply on Thursday after the retailer delivered another profits warning as cash-strapped customers increasingly avoided full-priced goods and sought out bargains instead... Source: Infocious RSS raw feed - channel BNPaperBusiness | 10 Apr 2008 | 12:58 pm
There is plenty of cash available to be invested in the markets and financial institutions. It is simply too frightened to come out and play. According to Reuters "A steady move into cash is also seen in Merrill Lynch's monthly poll of fund managers. Some 51 percent were overweight in cash in March, compared with 48 percent in February and 43 percent in January." One by-product of that is money flowing into 10-year Treasuries should push rates down there, making them less attractive. But, there is so much fear about the future of large financial companies and equities that the...
Reuters - Yahoo Inc ,
which was widely believed to be running out of alternatives to
accepting Microsoft Corp's takeover offer, has become
a target of two warring camps of technology giants and their
media allies, sources said on Wednesday.
Lehman Brothers has closed three investment funds valued at $1bn because of 'market disruptions' and spent $800m on buying up distressed assets Source: FT.com - US homepage | 10 Apr 2008 | 12:52 pm
Lehman Brothers, the fourth biggest US investment bank, said that it had liquidated three investment funds in its first quarter after "market disruptions".The value of the assets held by these funds was... Source: Infocious RSS raw feed - channel BNPaperBusiness | 10 Apr 2008 | 12:52 pm
DETROIT (Reuters) - Hayes Lemmerz International Inc , a maker of wheels and other automotive components, posted a wider 2007 net loss on Thursday due to an increase in asset impairment charges.
Goldman Sachs has made a change in its oil services sector expectation this morning: It has raised Halliburton (NYSE: HAL) to Buy from Neutral and has raised 2008 EPS estimates by about 2.5% and raised 2009 EPS estimates by almost 2%. This has been some time now, but Halliburton was Jim Cramer's #3 Value Pick for 2007. Weatherford International Ltd. (NYSE: WFT) was downgraded from Buy to Neutral, and Weatherford's EPS estimates for 2008 and 2009 have been lowered slightly. Estimates were also raised for Smith (NYSE: SII), Schlumberger (NYSE: SLB), Baker Hughes (NYSE: BHI). Shares of Halliburton are indicated...
The pound hits another low against the euro, driven by an interest rate cut from the Bank of England. Source: BBC News | Business | World Edition | 10 Apr 2008 | 12:35 pm
After the Bank of Englands lowered its rate to 5 percent, the European Central Bank left its benchmark rate at 4 percent amid rising inflation in the euro zone. Source: Infocious RSS raw feed - channel BNPaperBusiness | 10 Apr 2008 | 12:30 pm
A cut in interest rates from the Bank of England will do little to help revive Britain's commercial property market, experts said today. Source: Infocious RSS raw feed - channel BNPaperBusiness | 10 Apr 2008 | 12:30 pm
A cut in interest rates from the Bank of England will do little to help revive Britain's commercial property market, experts said today. Source: Telegraph Business | 10 Apr 2008 | 12:30 pm
The UK's leading economic and business commentators give their reaction to the Bank of England's decision to cut interest rates by 0.25pc to 5pc. Source: Infocious RSS raw feed - channel BNPaperBusiness | 10 Apr 2008 | 12:27 pm
The UK's leading economic and business commentators give their reaction to the Bank of England's decision to cut interest rates by 0.25pc to 5pc. Source: Telegraph Business | 10 Apr 2008 | 12:27 pm
Jean Pierre Garnier, the head of Glaxo Smith Kline, will bow out of the
pharmaceutical giant on a sour note after being granted options that will
see him benefit from a potential £2.5 million bonus long after he has left
the company. Source: Latest Business News from Times Online | 10 Apr 2008 | 12:25 pm
The European Central Bank keeps interest rates in the eurozone at 4% as inflation concerns persist. Source: BBC News | Business | World Edition | 10 Apr 2008 | 12:24 pm
Just when it looked like Gap Inc. (NYSE: GPS) was starting to bottom out, it appears that was only a resting point. Thing go from bad to worse. Gap Inc. March Comparable same store sales came in at -18% with a total company store sales down 12%. We were only looking for -7.7% to -8%. Old Navy, which we have referred to as one of the lamest brands in the country, posted same store sales of -27%. We have taken some heat for saying this dog of a chain should be spun out of the company. No one would likely...
The Bank of England's Monetary Policy Committee (MPC) will have faced an extremely difficult decision today, but, ultimately, we at the ITEM Club believe they made the right one by cutting interest rates... Source: Infocious RSS raw feed - channel BNPaperBusiness | 10 Apr 2008 | 12:01 pm
The Bank of England's Monetary Policy Committee (MPC) will have faced an extremely difficult decision today, but, ultimately, we at the ITEM Club believe they made the right one by cutting interest rates to 5pc. Source: Telegraph Business | 10 Apr 2008 | 12:01 pm
These are the top individual analyst calls we are focusing on this Thursday morning in pre-market trading: ADC Telecom (NASDAQ: ADCT) raised to Buy at Deutsche Bank. AmerisourceBergen (NYSE: ABC), Cardinal Health (NYSE: CAH), and McKesson (NYSE: MCK) were all downgraded to Hold from Buy at Citigroup. Cirrus Logic (NASDAQ: CRUS) Cut to Perform from Outperform at Oppenheimer. Cheniere Energy (NYSE: LNG) cut to Equalweight from Overweight at Lehman. Hain Celestial (NASDAQ: HAIN) Cut to Underweight at JP Morgan. Intuitive Surgical (NASDAQ: ISRG) started as Buy at Lazard; started as Market Outperform at JMP Securities. Nationwide Financial (NYSE: NFS) Raised...
The Bank of England has cut interest rates today to 5pc to head off a deeper slowdown in as UK economic growth slows. Source: Telegraph Business | 10 Apr 2008 | 11:50 am
Since everyone else has a date for the Apple (NASDAQ: AAPL) iPhone launch, why not offer another? According to intoMobile, the faster and thinner versions of the iPhone will come out in June at the Apple WWDC, two months from now. The website says that Apple has already ordered 10 million of the units from Taiwan-based Hon Hai The sooner the better, Apple's iPhone running on the AT&T (NYSE: T) 2.5G network is considered too slow for some. A 3G product will bring those buyers from the sidelines. In addition, Samsung and Nokia (NYSE: NOK) have come out with 3G...
The Bank of England's monetary policy committee cut interest rates to 5 per cent, acting to offset the effects that renewed strains in money markets are having on household and corporate borrowers Source: FT.com - US homepage | 10 Apr 2008 | 11:43 am
Wal-Mart (NYSE: WMT) beat Wall St. expectations for same-store sales raising optimism that the world's largest retailer is turning around and may post strong earnings for the quarter and the year. March same-store sales in the US rose 1.1%. Global revenue was up almost 8% to $36.97 billion. International revenue rose almost 19% to $9.47 billion. Wal-Mart raised guidance. "Because of the Easter calendar change and its potential positive impact on the April sales period, we expect comparable store sales without fuel for the April four-week period in the United States to be between one and three percent," said Tom...
Wal-Mart Stores has set the tone for what is expected to be weak March sales reports from the nation's biggest retail chains.
The world's biggest retailer says sales excluding gasoline at U.S. stores open at least a year rose 0.7 percent in March, less than analysts' forecasts. Wal-Mart blamed cold weather, which hurt apparel sales, and an early Easter.
But the company was more optimistic about April and raised its forecast for the first quarter.
"Because of the Easter calendar change and its potential positive impact on the April sales period, we expect comparable store sales without fuel for the April four-week period in the United States to be between one and three percent," said Tom Schoewe, executive vice president and chief financial officer. "This guidance is slightly higher than our comparable sales guidance of the previous two months, which has been flat to two percent."
Citing better management of its inventory, Schoewe said Wal-Mart was raising its forecast for first-quarter earnings from continuing operations to 74 cents to 76 cents per share, up from an earlier forecast of 70 cents to 74 cents per share.
As a Banc of America Securities analyst wrote this week, a "tough economy is Wal-Mart's sweet spot.''
Despite the beating it has taken in Chrysler, private equity fund Cerberus has about $7 billion on the sidelines to put into bank assets, many of which are going for a fraction of their face value. One expert commented in The New York Post "I think what you're going to see is the deep- value buyers coming in to get $1 for 50 cents," said Rick Maples co-head of in vestment banking and head of the financial institutions group at boutique investment firm Stifel Nicolaus. In a perverse way it is good news for banks. At least someone will buy...
Shares in Silverjet rose 40pc in early trading this morning after the business class airline said that it was in takeover talks. Source: Telegraph Business | 10 Apr 2008 | 11:02 am
The Bank of England sparked applause in financial markets and relief among
homeowners across the country today when it cut interest rates for the
second time this year and the third in five months. Source: Latest Business News from Times Online | 10 Apr 2008 | 11:00 am
Oil prices crept upward Thursday after settling at record high in the previous session on an unexpected drop in U.S. crude inventories. The U.S. Energy Information Administration's... Source: Infocious RSS raw feed - channel BNewsBusiness | 10 Apr 2008 | 10:58 am
World oil prices rallied on Thursday, after striking an all-time record above 112 dollars per barrel when the market was lifted by tumbling US energy reserves and weakness of the dollar,... Source: Infocious RSS raw feed - channel BNewsBusiness | 10 Apr 2008 | 10:55 am
DuPont is raising its first-quarter estimates to about $1.29 per share from $1.14 to $1.19 per share just last month. The chemicals maker cited strong growth in its agricultural sector... Source: Infocious RSS raw feed - channel BNewsBusiness | 10 Apr 2008 | 10:53 am
Stocks were poised to open lower Thursday as investors, eager to see how much U.S. consumers are paring back their spending, waited for sales figures from the nation's major retailers. Source: Infocious RSS raw feed - channel BNewsBusiness | 10 Apr 2008 | 10:52 am
The euro hit record peaks against the dollar and sterling on Thursday, boosted by favourable interest rate differentials ahead of monetary policy decisions in the eurozone and Britain,... Source: Infocious RSS raw feed - channel BNewsBusiness | 10 Apr 2008 | 10:52 am
The euro hit a record high point above 1.59 dollars on Thursday, boosted by favourable interest rate differentials ahead of a monetary policy decision from the European Central Bank,... Source: Infocious RSS raw feed - channel BNewsBusiness | 10 Apr 2008 | 10:51 am
Japan's Takeda Pharmaceutical is bidding $8.8 billion for American biotech Millennium Pharmaceuticals Inc. in what would be the largest buyout this year by a Japanese company. Takeda... Source: Infocious RSS raw feed - channel BNewsBusiness | 10 Apr 2008 | 10:49 am
Reuters - Lehman Brothers Holdings Inc
has liquidated three floundering investment funds that
lost value and ended up taking $1 billion of assets onto its
balance sheet, according to a filing with the U.S. Securities
and Exchange Commission.
Europe's main stock markets weakened on Thursday in cautious trading before key European interest rate decisions, and after oil prices hit a record high above 112 dollars per barrel,... Source: Infocious RSS raw feed - channel BNewsBusiness | 10 Apr 2008 | 10:43 am
LONDON (Reuters) - Futures fell on Thursday, pointing to a lower open on Wall Street after Lehman Brothers liquidated three of its funds and investors awaited a clutch of data to shed fresh Source: Infocious RSS raw feed - channel BNewsBusiness | 10 Apr 2008 | 10:37 am
The Chinese currency strengthened beyond Rmb7 to the dollar for the first time since 1994 as China's economic growth speeds on under inflationary pressure Source: FT.com - US homepage | 10 Apr 2008 | 10:37 am
Saudi Arabian Oil Minister Ali Al-Naimi said here on Thursday that there were not enough buyers of oil to justify an increase in oil production, despite high prices. Speaking Source: Infocious RSS raw feed - channel BNewsBusiness | 10 Apr 2008 | 10:29 am
Adidas can stop other manufacturers putting stripes on sleeves, the European Court of Justice rules. Source: BBC News | Business | World Edition | 10 Apr 2008 | 10:23 am
The British government unlawfully bowed to foreign threats in scrapping a high-profile investigation into arms deals between BAE Systems and Saudi Arabia, the High Court has ruled, putting fresh pressure on ministers to reopen the probe Source: FT.com - US homepage | 10 Apr 2008 | 10:13 am
Thomas Cook, the travel group, declared today that it would be cutting back on
holidays to short haul destinations in Europe as a result of the plunge in
value of the pound against the euro. Source: Latest Business News from Times Online | 10 Apr 2008 | 9:13 am
The Hong Kong budget airline Oasis stops flying and applies for liquidation, leaving passengers stranded. Source: BBC News | Business | World Edition | 10 Apr 2008 | 8:49 am
Shares in Silverjet, the business-class only airline, soared 43 per cent to
21.75p after it said it was in takeover discussions after receiving a bid
approach. Source: Latest Business News from Times Online | 10 Apr 2008 | 8:07 am
Yahoo!, the internet search engine under threat of a $44.6bn hostile takeover
from Microsoft, is understood to be talking with Time Warner about a
potential white knight deal.$ Source: Latest Business News from Times Online | 10 Apr 2008 | 7:21 am
DSG International's new chief executive John Browett today issued his second
profit warning in under four months over a slump in demand for anything but
cut-price promotional goods at the Currys and PC World chains. Source: Latest Business News from Times Online | 10 Apr 2008 | 7:11 am
RWE, the German power giant that owns npower in the UK, has tabled an £11
billion indicative cash offer for British Energy, the nuclear generator. Source: Latest Business News from Times Online | 10 Apr 2008 | 7:04 am
They knowingly scheduled more flights than airports can handle, inspector general says. Northwest reportedly booked 56 departures in a 15-minute window at one airport.
The record number of delayed and canceled flights in 2007 can partly be blamed on airlines knowingly scheduling more flights than airports had the capacity to handle, according to a report released Wednesday by the Department of Transportation's inspector general.
Hundreds more are expected as wiring bundles are checked on its entire fleet of MD-80s.
More than 100,000 air travelers across the nation wrestled with flight cancellations, long lines and ruined vacation plans Wednesday as American Airlines continued to ground planes for maintenance inspections and said more disruptions were coming in the days ahead.
The selection of Sue Naegle is latest move in a management overhaul for the premium channel having a rocky year. She helped give HBO its last big hit, "Six Feet Under."
After a year of high drama in its executive ranks that often was more compelling than some of its programs, HBO on Wednesday broke with tradition by welcoming an outsider -- television agent Sue Naegle -- as its new entertainment president.
A surprise decline in U.S. crude supplies pushed oil futures to $112.21 a barrel Wednesday before settling at $110.87, both records that could doom drivers to even higher pump prices.
A report implying that the TV anchor would be exiting early isn't true, it says.
CBS News shot down a report Wednesday that implied that anchor Katie Couric was preparing to leave the network and her post on its flagship evening newscast as soon as next January, saying no such decision had been made.
The Dow Jones industrial average sheds 49 points, with transportation and technology sectors particularly hard hit.
Wall Street extended its losses Wednesday as a rise in oil prices and a profit warning from United Parcel Service raised investors' anxiety about the well-being of the economy.
Despite setbacks for a rival drug, Alfred Mann is optimistic that he'll get the diabetes treatment to market.
With the zeal of a young entrepreneur, 82-year-old Los Angeles billionaire and philanthropist Alfred Mann has bet nearly half of his estimated $2.2-billion fortune that he can develop an inhaled version of insulin for the nation's 5 million diabetics.
The two are said to be close to a deal that would create an online ad giant. It could save Yahoo from a takeover by Microsoft.
Internet pioneers Yahoo Inc. and AOL were closing in on a deal late Wednesday that would combine their businesses into an online advertising giant, according to four people familiar with the talks.
The administration backs write-downs by lenders, but critics seek more action.
With the Senate poised to take new action on the mortgage crisis and the House at work on far more sweeping proposals, the Bush White House is grudgingly giving ground on its ideological opposition to government intervention in the marketplace.
Yahoo ratcheted up its efforts to improve its negotiating position in the face of an unsolicited takeover bid from Microsoft amid signs that it was edging towards a three-way alliance with Google and AOL Source: FT.com - US homepage | 10 Apr 2008 | 4:43 am
ASCAP, the oldest organization representing songwriters and artists in the United States, is set unveil a "bill of rights" for songwriters and composers to ensure that musicians get paid for music distributed on the Web.
The document, which ASCAP plans to unveil Thursday morning in Los Angeles at its annual conference, the ASCAP Expo, comes as the music industry is moving to dramatically reshape its future. [The full text of the bill of rights can be found here.]
"Given the many issues surrounding the music industry today, it can be all to easy to overlook the source of it all—individual songwriters, lyricists, and composers," Phil Crosland, ASCAP’s executive vice president for marketing, told Portfolio.com. "Our goal is to support all music creators, reminding lawmakers, the general public, and music creators themselves of the rights inherent in their art."
In the face of widespread music piracy and rapidly declining CD sales, the recording industry is facing its biggest crisis ever.
ASCAP's artist bill of rights—part of a 32-page position paper—says bluntly: "The creative people who bring vital art forms like music to life have the right to share in the profits generated by their work and earn a living from uses of their work."
It goes on to state that the "protection of copyright in the musical realm is vital to the creator who hopes to make a living from his or her passion to create. Without this protection, many who dream of focusing their talents and energies on music creation will be economically unable to do so—which means artistic expression is lost both today and to future generations."
ASCAP is a membership association of over 300,000 U.S. composers, songwriters, lyricists, and publishers of every kind of music.
The organization will also launch a webpage "allowing ASCAP members and other music creators to sign on with their support of the bill of rights electronically," the group said, in a statement. "ASCAP will be collecting the physical signatures of many high-profile songwriters and composers attending the Expo over the next few days."
The recording industry's wrenching transition into the digital age has been exposed during the last few weeks, as the major labels have made very public moves to show that they are willing to embrace new Web-based business models.
But independent musicians, such as the outspoken singer-songwriter Samantha Murphy, have expressed skepticism about the new digital business models, wondering if they will be left out in the cold. Related Links Paying the Piper Future Pop Bite of the Apple
ASCAP's Bill of Rights for Songwriters and Composers:
We have the right to be compensated for the use of our creative works, and share in the revenues that they generate.
We have the right to license our works and control the ways in which they are used.
We have the right to withhold permission for uses of our works on artistic, economic or philosophical grounds.
We have the right to protect our creative works to the fullest extent of the law from all forms of piracy, theft, and unauthorized use, which deprive us of our right to earn a living based on our creativity.
We have the right to choose when and where our creative works may be used for free.
We have the right to develop, document, and distribute our works through new media channels while retaining the right to a share in all associated profits.
We have the right to choose the organizations we want to represent us and to join our voices together to protect our rights and negotiate for the value of our music.
We have the right to earn compensation from all types of "performances," including direct, live renditions as well as indirect recordings, broadcasts, digital streams, and more.
We have the right to decline participation in business models that require us to relinquish all or part of our creative rights—or which do not respect our right to be compensated for our work.
We have the right to advocate for strong laws protecting our creative works, and demand that our government vigorously uphold and protect our rights.
Reports Wednesday night pointed to Microsoft enlisting Murdoch's News Corp. to support its $45 billion bid to acquire Yahoo.
It's unclear what News Corp., the owner of the New York Post and Fox News Channel, can offer Microsoft in its bid to buy Yahoo, but it's likely a strategic partner to offset dramatic moves made earlier in the day by the struggling internet company.
The reports capped a tumultuous afternoon that saw Yahoo begin to take the wraps off plans to combine its Web business with AOL, share its ad business with Google, and undertake a massive stock buyback to thwart Microsoft's months-long takeover effort, which has recently started to veer toward a more hostile bid.
The battle lines are now drawn—if not clearly because Murdoch's MySpace social networking site relies on Google to serve its Web advertising—for a protracted fight for a dominant internet presence involving Murdoch, Yahoo chieftain Jerry Yang, Microsoft boss Steve Ballmer, Google wunderkinds Larry Page and Sergey Brin, and newly minted Time Warner C.E.O. Jeff Bewkes.
News of Murdoch's potential interest in a deal came at the end of a tumultuous day in the battle for Yahoo. Earlier, the beleaguered Web giant, scrambling to find an alternative to Microsoft's hostile takeover bid, announced that it had sealed a deal with Google allowing its archrival to serve ads on its network.
In a statement issued late Wednesday, Yahoo said it would "begin a limited test of Google's AdSense for Search service, which will deliver relevant Google ads alongside Yahoo's own search results."
"The test will apply only to traffic from Yahoo.com in the U.S. and will not include Yahoo's extended network of affiliate or premium publisher partners," the company said. "The test is expected to last up to two weeks and will be limited to no more than 3 percent of Yahoo search queries."
The pact between Yahoo and Google could lead to an escape hatch for Yahoo if the two companies determine that such an arrangement—on a much broader scale—could be profitable.
Yahoo's decision to test-drive a search-advertising partnership with Google is the surest indication yet of Yahoo C.E.O. Jerry Yang's desperation to find an alternative to Microsoft, which has been threatening a hostile takeover move.
If Yahoo outsourced its search advertising to Google, the company would essentially be admitting defeat in the search-advertising wars that have been running for almost a decade.
But it remains to be seen if the Google-Yahoo partnership will pass regulatory scrutiny, given Google's overwhelming dominance in the search-ad market. In February, Glenn Manishin, a top tech antitrust lawyer at Duane Morris, told a UBS conference call that a Yahoo-Google search tie-up would be "much more problematic" than the Microsoft-Yahoo merger itself.
The reason is simple. Google commands nearly 70 percent of the search market, while Yahoo holds almost 20 percent. Combining the two companies' search engines would create a virtual monopoly in search.
Manishin said the one exception would be if Yahoo stood before the Department of Justice and argued that it was a "failing company" and thus needed the deal to avoid "financial distress." In other words, Jerry Yang would have to convince the D.O.J.—and European regulators—that Yahoo needs a deal with Google in order to stave off bankruptcy.
While Yahoo is getting slaughtered by Google in search, it is hardly in "financial distress." In fact, it earns over $1 billion per year, and was attractive enough for Microsoft to offer $45 billion for it.
And given Google's attitude toward the Microsoft-Yahoo deal—warning that the tie-up would in effect create an internet monopoly—Microsoft would waste no time in pointing out, correctly, the anticompetitive implications of a Yahoo-Google search pact.
Microsoft general counsel Brad Smith said Wednesday the agreement "would consolidate over 90 percent of the search-advertising market in Google's hands."
"This would make the market far less competitive, in sharp contrast to our own proposal to acquire Yahoo," Smith said in a statement. "We will assess closely all of our options. Our proposal remains the only alternative put forward that offers Yahoo shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers." Related Links Dangerous Liaison Yahoo Takes the Offensive in Microsoft Battle Google Wins One
Industry-wide action by US regulators underlines their concerns that investors could have been misled by claims that short-term bonds were liquid and safe Source: FT.com - US homepage | 10 Apr 2008 | 2:58 am
Blue Chip New Zealand Ltd is joining 20 other related companies in voluntary liquidation.
The collapse of the companies has left many creditors with huge mortgages over investment properties.
The latest move was announced today... Source: New Zealand Herald - Business | 10 Apr 2008 | 2:51 am
Telecom chief executive Paul Reynolds says the company's earnings will likely be lower over the next two years, but that will be followed by a return to growth as pressures ease.
In a statement coinciding with Telecom's annual... Source: New Zealand Herald - Business | 10 Apr 2008 | 12:30 am
The world's leading banks publicly accepted much of the blame for the credit crisis, as the International Monetary Fund slashed its estimates for global growth and warned that the US downturn will last longer than most people expect Source: FT.com - US homepage | 10 Apr 2008 | 12:24 am
The North American leg of the troubled Olympic torch relay descended into farce after San Francisco officials made a last-minute change to the torch's planned relay route Source: FT.com - US homepage | 9 Apr 2008 | 11:03 pm
Two of the most colourful characters in English football were arrested
yesterday by police investigating alleged corruption in the game. David
Sullivan, the Birmingham City co-owner, and Karren Brady, the club’s
managing director, were questioned by City of London Police on suspicion of
conspiracy to defraud and false accounting. It is understood that the
transfer of Aliou Cissé from Birmingham to Portsmouth in 2004, handled by
Willie McKay, the agent, is at the centre of the investigation. Source: Latest Business News from Times Online | 9 Apr 2008 | 11:00 pm
The local sharemarket was down at opening today following two days of profit taking.
The benchmark NZSX-50 index was down 12.98 points to 3562 at 10.15am.
United States stocks fell on Wednesday after United Parcel Service Inc... Source: New Zealand Herald - Business | 9 Apr 2008 | 10:45 pm
Air New Zealand and Qantas are likely to seek compensation from Boeing following the announcement of a two-year delay in delivery of their 787-9 Dreamliner aircraft on order
Air New Zealand has eight 787-9 aircraft on firm order... Source: New Zealand Herald - Business | 9 Apr 2008 | 10:00 pm
CANBERRA - Federal Treasurer Wayne Swan says he is "in step" with recent decisions of the Reserve Bank of Australia to raise interest rates repeatedly in an attempt to bring inflation under control.
The bank has lifted rates eight... Source: New Zealand Herald - Business | 9 Apr 2008 | 9:30 pm
The manufacturing sector's overall activity declined for the first time in over two years, a survey released today shows.
The Bank of New Zealand-Business NZ Performance of Manufacturing Index (PMI) for March was 48.3, seasonally... Source: New Zealand Herald - Business | 9 Apr 2008 | 9:00 pm
The oil price jumped to a fresh record high of US$112 a barrel overnight on a drop in US inventories and signs of strong demand from China and India.
Opec is now expected to have annual revenues of US$1 trillion because of the... Source: New Zealand Herald - Business | 9 Apr 2008 | 8:45 pm
Every year more advertising moves online and away from newspapers. And now there's a website that's aiming to bury newspapers' business in death notices. Curt Nickisch reports. Source: Marketplace | 9 Apr 2008 | 8:30 pm
Best estimates are that about 15% to 20% of the world's economy happens off the books. Journalist Mischa Glenny takes a tour of the underground economy in his new book, "McMafia." He talks about it with Kai Ryssdal. Source: Marketplace | 9 Apr 2008 | 8:30 pm
The cost of the Iraq war is estimated at between $1 trillion and $3 trillion. But commentator Robert Reich says as big as that number is right now, it's going to hurt us more in the future. Source: Marketplace | 9 Apr 2008 | 8:30 pm
A new website is posting the financial disclosure records that federal government employees in senior positions are required to fill out. Jeremy Hobson reports. Source: Marketplace | 9 Apr 2008 | 8:30 pm
A new survey says most middle-class Americans are worse off financially today than they were four years ago. Kai Ryssdal talks with David Leonhardt of The New York Times about the squeeze middle-class families are feeling. Source: Marketplace | 9 Apr 2008 | 8:30 pm
Restaurant Brands has reported full year net profit, excluding non trading items, up 69 per cent to $11 million.
The results for the year to the end of February reflected an end of losses from Pizza Hut Victoria, the sale of which... Source: New Zealand Herald - Business | 9 Apr 2008 | 8:30 pm
American Airlines canceled more than 1,000 flights today for safety checks on its planes, as part of the FAA's recent crackdown on airline safety. Ashley Milne-Tyte reports on how much these cancellations will cost airlines and travelers. Source: Marketplace | 9 Apr 2008 | 8:29 pm
Unconfirmed reports say Citigroup is close to selling $12 billion in loans, at a sizable loss, that it wants to get off its books. How much are bad loans worth and why would anyone buy them? Bob Moon reports. Source: Marketplace | 9 Apr 2008 | 8:29 pm
The chairman of listed finance company Cynotech has predicted more failures in the sector and said his company would continue to proceed with caution.
Chairman Allan Hawkins said his board was "not really happy" with its full year... Source: New Zealand Herald - Business | 9 Apr 2008 | 7:40 pm
These are dark days for fliers, and today was a particularly gloomy one.
American Airlines said that it would cancel more than 1,000 flights for wiring inspections, inconveniencing 85,000 passengers and unnerving the rest of us.
At a moment when new planes could not be more welcome, Boeing announced further delivery delays for its 787 Dreamliner.
Deliveries for the hotly anticipated new plane are now running as much as 18 months behind schedule, which begs the question: How much should air travelers care about Boeing's delay at the gate?
Of course, Boeing's new 787s would not be replacing the planes grounded by American on Wednesday. The 787 is a long-haul plane used for international flights, whereas the Federal Aviation Administration’s concerns are with Boeing's MD-80s, a short-haul plane no longer in production.
There are only two U.S. airlines that have placed Dreamliner orders to date. Northwest has a contract for 18, and Continental has 25 on order.
In any case, industry analysts don't see any threat of old or unsafe planes staying in service as airlines wait for new equipment. The 787s have been purchased mainly as additions to relatively new fleets of long-haul aircraft, rather than as replacements for aging planes.
"It's unlikely that you're going to have aircraft go past their 'expiration date,'" says Richard Aboulaffia, who covers airlines for the Teal Group.
But while safety may not be an issue, are there additional costs from the delays that will be passed on in the form of ticket prices?
Airlines awaiting 787s have three courses of action: They can live with a smaller fleet; keep planes in service for longer; or find comparable planes to bridge the gap—Boeing's 767 and 777 models are close to the Dreamliner in size, as is Airbus' A330.
Continental ordered eight new 777s from Boeing in February, and Virgin Atlantic is in talks with Boeing to have 777s lent to them for the short term.
"Airlines will still do whatever they were planning to do, just with a different plane," says Michael Derchin, an analyst with FTN Midwest Securities. "And at some point, they will sit down with Boeing and go over what's a fair compensation."
Both Derchin and Aboulaffia believe that it will be Boeing, rather than the airlines and their customers, that will end up footing many of the added equipment costs of the delay.
But there's an extra cost component associated with delivery delays that Boeing's not likely to cover: The revolutionary element of the 787 is its outstanding fuel economy, as the plane is expected to use as much as 20 percent less fuel than comparable aircraft.
Now airlines (and their passengers) will have to wait longer to start experiencing those fuel-cost savings.
Labour productivity increased 2.6 per cent last year, the strongest growth since the turn of the century.
But when it comes to productivity statistics that is just about the only good news lately.
Otherwise they tell a picture... Source: New Zealand Herald - Business | 9 Apr 2008 | 7:15 pm
In the hypercompetitive world of commercial spaceflight, you need deep pockets just to stay in the game.
That's why some customers and investors are losing confidence in Rocketplane, which spent 2007 getting outflanked by better-funded competitors and being buffeted by bad publicity -- instead of launching its first suborbital flight, as the company had promised just a few years earlier.
In October 2004, when Reda Anderson plunked down her deposit and made the first reservation to be flown to the edge of space, she had a reasonable expectation that she'd be the first civilian "pioneer" (she dislikes the term "tourist") to take that ride. She signed up with the company that was then called Rocketplane Limited, which hoped to be the first to market with commercial spaceflights in 2007.
Now Anderson is quietly checking out other companies that could get her off the ground sooner.
"Rocketplane is plan A, absolutely," Anderson told Wired.com. "But there's always a plan B."
Rocketplane has suffered largely from the scope of its ambition: It tackled both the suborbital tourist market and the NASA-servicing orbital market at the same time, and tried to do it all without the benefit of a billionaire backer, like Virgin Galactic's Richard Branson. While all of the companies in the young commercial space industry have experienced delays and setbacks, Rocketplane's current position seems shakier than most.
At the Space Access conference in Phoenix on the last weekend of March, panelists called the rush toward the first space tourism flight a "horse race" with two clear leaders: the well-financed Virgin and the scrappy but impressive Xcor Aerospace, which announced the design for its small suborbital vehicle two weeks ago. Almost as an afterthought, panelists mentioned the other companies in the pack: Rocketplane, Armadillo Aerospace and the secretive Blue Origin.
The CEO of Rocketplane, George French, declined to comment on the challenges faced by his company, or on its progress in raising investment money to build its suborbital vehicle. The company has publicly stated that it still expects to start commercial flights in 2010 or 2011, the same time frame now being quoted by Virgin and Xcor.
But Joe Pistritto, one of the Space Access panelists, doesn't seem enthusiastic about Rocketplane's prospects. An angel investor who made his money in the early days of the dot-com boom, Pistritto has a large stake in Xcor, and also owns a small amount of stock in Rocketplane. He said that Virgin and Xcor are viewed as leaders because of two things: money and reputation.
"I don't think anyone worries that Virgin is going to run out of money," Pistritto said. "And Xcor has built up a really good track record, partly because the company has a reputation for underpromising and overdelivering."
While French has served as the company's angel investor, he isn't in the same financial league as Branson or Blue Origin's Jeff Bezos, founder of Amazon.com. French has instead turned to the market, vigorously promoting his company as a sound investment for angel or institutional investors.
Commentators on the emerging commercial space industry, which is often dubbed "NewSpace," say that in contrast to Xcor, Rocketplane's reputation has been hurt by ambitious pronouncements that don't come true. "In the past, they've been good at promoting the sizzle, and not so good at showing they have the steak," said Charles Lurio, a former aerospace engineer who writes a space newsletter, The Lurio Report.
Like many other outside observers, Lurio said he respects French's fundraising abilities, and believes the company has a plausible design for its suborbital tourism vehicle, the XP. "But I would be very cautious if I was an investor," Lurio said. "I would have to see an awful lot of working hardware to be convinced."
Chuck Lauer, Rocketplane's vice president of business development, told a Space Access audience that the XP's development was delayed by more than a year while the company focused on a NASA contract for an orbital vehicle to resupply the space station. Rocketplane lost its contract in September 2007 because it hadn't met milestones in private fundraising.
Many NewSpace observers say the company can't be entirely faulted for that failure. They note that NASA never provided assurance that it would buy a certain number of flights from Rocketplane, and also publicly announced its purchase of future flights on the Russian spacecraft Soyuz, essentially souring Rocketplane's pitch to investors at a crucial moment in May 2007.
Rocketplane's suborbital program, too, has been slowed, as the company announced a new design for the vehicle in October 2007. The previous design would have used a commercially available Learjet as a base; now the company plans to build the airframe from scratch.
Whether or not the company lost credibility in the marketplace because of these developments, the delays killed its momentum, and caused several key players to depart. The former astronaut John Herrington, who was expected to be the XP's pilot, resigned from Rocketplane in January 2008.
"My plan was to be flying by 2007," Herrington said. "The reason it didn't happen was all due to funding. You can only put so much time and effort into something before you decide it's time to move on."
Microsoft may be a corporate behemoth with a 28 percent profit margin and a reputation for ruthlessly exploiting its virtual monopoly in desktop-computer operating systems, but all we've seen from the Redmond giant in its courting of Yahoo is two months of textbook pussyfooting.
Maybe all those antitrust suits have left Microsoft too soft. Or maybe its lack of experience in hostile takeovers is showing: Since it was founded 32 years ago, Microsoft has never faced a major board battle.
It might just be that Microsoft is not used to big, complex acquisitions. Before its proposed initial $45 billion takeover of Yahoo, the biggest deal it made was the $6 billion purchase of aQuantive, and those investors rolled over easily.
There are, of course, reasons why Microsoft shouldn't come on too strong. In tech, hostile takeovers can trigger an exodus of talent, as I.B.M. found when it took over Lotus and Hewlett-Packard found when buying Compaq.
At the same time, it doesn't want to revive its image as a bully as it tries to secure a foothold in Silicon Valley. "This is also a tremendous opportunity for Microsoft to send a message to the Valley that they're not the big, bad guys they're made out to be," said Saikat Chaudhuri, a business professor at Wharton.
But the nice-guy act has its own perils. First there was that February 1 salvo that only served to awaken Yahoo.
This week, Microsoft lashed out in a vindictive spasm of unrequited love, complaining that "there has been no meaningful negotiation" and that its "large premium" is more than "significant."
Meanwhile, Yahoo fiercely defends its bachelorhood.
Coincidence or not, the latest letter came as hostile-takeover veteran Carl Icahn scored a major victory over Motorola. So there are some clear lessons from the corporate-raider playbook that can strengthen Microsoft's hand.
1. Talk to shareholders, and only shareholders.
Your finger-wagging at Yahoo executives only gets the bloggers' tongues wagging. Your true constituency is the owners who bought Yahoo at $43 in January 2006 and have seen it drop 36 percent. Speak to them, forget the rest.
"The shareholders and the employee base are not unequivocally and blindly devoted to Yang and Co.," says Chaudhuri. "At some point you do have to take it to shareholders."
Oh, and don't threaten to lower your bid. Yahoo is, disingenuously or not, holding out for more than you originally offered. So you're going to give Yahoo shareholders less? Why not insist on Windows haircuts for shareholders?
2. Find impeccable board members.
Smart and seasoned board members are scarce, but worth finding. Not only will those with low pedigrees embarrass the target company and its current board, Chaudhuri says, they will help pull the rug out from under any arguments that you aren't acting in the best interest of Yahoo shareholders.
Let's take the people Icahn has put on Motorola's board as an example. One is Keith Meister, a key Icahn adviser and manager of his investment funds. Meister's past comments show he's a loyal pawn.
So it helps to balance things out with a pillar of integrity like Bill Hambrecht. He's as gray as the éminence grises get in Silicon Valley. He took Apple, Genentech, and Amazon public. Then he founded another firm specializing in Dutch auctions and helped take Google public. A Hambrecht more than trumps a servile Meister.
3. Know your opponent's playbook.
Yahoo has largely reached for the Nancy Reagan approach—a bit of the old "just say no." It's not the strongest defense, but it's about all Yahoo has.
Your trump card is cash—and you've got $21 billion of it. If you want Yahoo, spend some.
4. Let the numbers speak for themselves.
Yahoo is scheduled to report its first-quarter earnings on April 22; you report two days later. Analysts expect Yahoo to be roughly even or above its profits compared with the year-ago profits. But they are looking for your profits to fall.
This scenario will probably reverse later this year. Yahoo's profits will be down one year, and yours will be up. But the M&A headlines will be focusing on this quarter. Which means you'll need to explain why a company with declining earnings per share should buy a company with flat or rising E.P.S.
You can always hope there will be earnings surprises in your favor. If there aren't, you will have to find some compelling numbers to show that Yahoo is better off in your arms. Otherwise, this idea that Yahoo is starting to become better off on its own will gather momentum.
A red-faced Google has yanked HuddleChat, one of its prototype App Engine programs, after it faced a mini-revolt in the developer community over allegations that it ripped off the application from a small software company.
The flap arose following Google's otherwise successful launch of App Engine—a set of free tools that allows software developers to build applications on Google's infrastructure—when Jason Fried, the founder of 37signals, a small software firm, accused the web behemoth of pilfering Campfire, his company's group-chat application.
Google apparently decided that HuddleChat wasn't worth the trouble, and in a bid to stanch the bleeding, yanked the application altogether.
"Hi, a couple of our colleagues wrote HuddleChat in their spare time as a sample application for other developers to demonstrate the power and flexibility of Google App Engine. We've heard some complaints from the developer community about it and because of that we've decided to take it down."
In a comment posted on ReadWriteWeb, which rode herd on the flap yesterday, Pete Koomen, product manager of the Google App Engine Team, wrote, "rather than divert attention from Google App Engine itself, we thought it better to just take HuddleChat down."
Meanwhile, over at TechCrunch, Michael Arrington took a typically contrarian view, saying that he was "outraged" over this act of "censorship" by Google.
"This is the first case of censorship on the new Google App Engine platform, and a bad precedent," Arrington sniffed. He urged readers to join a new Facebook group demanding the Google bring back HuddleChat. Save HuddleChat!
It's easy to see how tempting it might be for Leon Black to take his private equity firm, Apollo Management, public right now. After all, if one group of investors has spurned your shares in one place, why not just try selling those same shares to a different investor group in another place?
That's essentially what Apollo is trying to do with its planned initial public offering announced yesterday. Last summer, the private equity firm sold its shares on a private exchange for institutional investors for $24 per share, raising $716 million. On Monday, they traded for $14 per share.
The plan, according to the firm's regulatory filing, is to sell those shares on the New York Stock Exchange for $14 each, raising $418 million. The hope is that, by opening up the offering to the broader investing public, the shares will regain some of their losses.
It's hopeful. But we all know that hope is not a plan.
Indeed, the timing of this filing is so peculiar that it's hard to find any good reason for doing it now.
Let's start with the obvious: Other private equity firms that have ventured into the public markets in the past year have nothing but failure to report. Shares in the Blackstone Group reached $38 on their opening day last June, and today they swap for exactly half that. Shares of Fortress Investment Group are faring even worse: They trade for $13.34 today, down from a high of $34 last summer.
Secondly, Apollo finds itself in the headlines this week for another reason: Linens 'n Things, which Apollo took private in 2005 for $1.3 billion, is reportedly on the verge of bankruptcy.
And that's not the only Apollo holding that's in trouble. Last year, it took Realogy Corp., the parent of Coldwell Banker and Century 21, private for $6.6 billion. Earlier this year, Bloomberg reported that the debt used to finance the transaction had fallen so low that it rendered Apollo's equity investment in the deal essentially worthless.
These are not exactly the type of news items to help an I.P.O. road show gain momentum.
And thirdly, if Apollo needs capital, there should be plenty of places other than the public markets to find it. The firm has already raised money from selling stakes to Calpers, the Abu Dhabi Investment Authority, and Credit Suisse. Plenty of limited partners in private equity firms continue to show interest in becoming general partners.
In fact, if Apollo needs permanent capital and can't find it anywhere but the public markets, that's an even more troubling selling point to potential new investors.
Of course, Felix Salmon reminds us on his Market Movers blog that this is Leon Black we're talking about. Perhaps the only reason why he's taking Apollo public in this environment is simply because he can.
Reuters - Stocks were little changed on Thursday
as reports of sluggish sales at major retailers heightened
concerns about the economy's health and the impact of the
housing slump on consumers, offsetting Wal-Mart Stores Inc's
raised outlook.
Reuters - An early Easter holiday, chilly
weather and recession-wary consumers combined to deliver dismal
March sales results for U.S. retailers.
Reuters - Yahoo Inc ,
which was widely believed to be running out of alternatives to
accepting Microsoft Corp's takeover offer, has become
a target of two warring camps of technology giants and their
media allies, sources said on Wednesday.
Reuters - Lehman Brothers Holdings Inc
has liquidated three floundering investment funds that
lost value and ended up taking $1 billion of assets onto its
balance sheet, according to a filing with the U.S. Securities
and Exchange Commission.