It may be the first bad news ever about the Apple (AAPL) iPhone, It is certainly good for RIM (RIMM), the maker of the Blackberry, According to research firm IDC, the iPhone lost smartphone market share in the US during the first quarter. Reuters writes "According to the report Rim's share of the U.S. market for advanced phones with computer like features such as e-mail rose to 44.5 percent in the first quarter from 35.1 percent in the fourth quarter while iPhone's share fell to 19.2 percent from 26.7 percent in the fourth quarter." Motorola's (MOT) share fell from 7.5%...
Newsday yesterday said it will whack another 32 people from its payroll - most of them middle managementblue-collar workers who run the printing presses. The cuts come on the heels of last month's agreement... Source: Infocious RSS raw feed - channel BNPaperBusiness | 31 May 2008 | 9:47 am
NEW DELHI/MUMBAI (Reuters) - India's Sterlite Industries on Saturday agreed to buy the operating assets of bankrupt copper miner Asarco for $2.6 billion, the latest in the series of overseas acquisitions by Indian firms.
A $1 billion bet is said to be on the table for the Department of Justice to forgive the past crimes of an online gambling company, opening the door to a new Internet gold rush. Rumors swirled yesterday... Source: Infocious RSS raw feed - channel BNPaperBusiness | 31 May 2008 | 8:47 am
While most retailers have just reported quarterly results, the outlook for their business - and stocks - remains as murky as ever. Upscale jeweler Tiffany & Co.yesterday posted a higher-than-expected... Source: Infocious RSS raw feed - channel BNPaperBusiness | 31 May 2008 | 8:47 am
Calpine Corp. risks angering its largest shareholder - Harbinger Capital Partners, the hedge fund that recently won seats at The New York Times - if it fails to follow through on a promise to negotiate... Source: Infocious RSS raw feed - channel BNPaperBusiness | 31 May 2008 | 8:47 am
Icahn buy Federal antitrust reg ulators have cleared Carl Icahn's purchase of another $1.5 billion in Yahoo! shares. Icahn launched a proxy fight last month to remove Yahoo!'s board after it rejected... Source: Infocious RSS raw feed - channel BNPaperBusiness | 31 May 2008 | 8:47 am
Ex-Credit Suisse Group banker Hafiz Muhammad Zubair Naseem was sentenced to 10 years in prison and must forfeit $7.5 million for his role in an insider trading scheme involving tips on nine transactions,... Source: Infocious RSS raw feed - channel BNPaperBusiness | 31 May 2008 | 8:47 am
US giant Ford is to invest $3bn (£1.5bn) in a new car plant in Mexico, creating 4,500 new jobs. Source: BBC News | Business | World Edition | 31 May 2008 | 8:05 am
AP - The first round of economic stimulus checks gave a boost to personal incomes in April but a huge question remains: Will people spend the checks quickly enough to keep the economy afloat?
Next time you face sticker shock at the gas pump over a $4 gallon of gas, check out your pension fund's investments. They may explain much about the surge in oil prices. Institutional... Source: Infocious RSS raw feed - channel BNewsBusiness | 31 May 2008 | 6:20 am
The European Central Bank celebrates its 10th birthday Monday with its reputation burnished by a steadfast stance on interest rates and quick action to supply banks with cash during the... Source: Infocious RSS raw feed - channel BNewsBusiness | 31 May 2008 | 6:16 am
Feeling woozy about the fortune you've just pumped into your gas tank? Drivers around the world share the sensation. Consumers, gas retailers and governments are wrestling with a new ... Source: Infocious RSS raw feed - channel BNewsBusiness | 31 May 2008 | 6:11 am
Kim Hodgkinson could sense the skepticism in her teenage caddie's body language: Oh, great, a woman golfer. As if playing in the pro-am tournament before last year's PGA Tour stop in... Source: Infocious RSS raw feed - channel BNewsBusiness | 31 May 2008 | 6:01 am
"The whole month of June is kind of a magic month." Citi Investment Research equity strategist Lori Calvasina wasn't referring to weddings, graduations or wildflowers blooming. She was... Source: Infocious RSS raw feed - channel BNewsBusiness | 31 May 2008 | 5:06 am
Investors turn next week to the key monthly numbers on employment, while keeping an eye on oil prices, to determine whether the market’s 2 ½-months-long advance can continue.
For those ready to jump into the real estate market, the National Association of Realtors has agreed to share the housing database called the Multiple Listing Service with rival brokers on the Internet. Author Elizabeth Razzi explains. Source: Marketplace Money | 31 May 2008 | 3:10 am
Robert Gates, US defence secretary, warned that coercive diplomacy over energy resources in Asia could threaten the security and prosperity of the region Source: FT.com - US homepage | 31 May 2008 | 2:34 am
Two former CVS executives were acquitted Friday of bribing a Rhode Island state senator for legislative favors, dealing a blow to the federal government's probe into corruption in the... Source: Infocious RSS raw feed - channel BNewsBusiness | 31 May 2008 | 2:10 am
Tom Cruise and Katie Holmes did it. So did Eva Longoria and Tony Parker. But saying vows in exotic places is not just for Hollywood royalty. One study says destination weddings quadrupled in the last decade. Why are they so popular? Source: Marketplace Money | 31 May 2008 | 1:52 am
You caught "Scrubs, the Musical" on NBC, right? On this week's A Day in the Work Life, we learn singing doctors are not just make-believe. Dr. Ari Perry performs some of his material and tells how music keeps him sane. Source: Marketplace Money | 31 May 2008 | 1:26 am
This week, Tess Vigeland and economics editor Chris Farrell talk to a parent trying to save money for his child's college education and a man trying to get a mortgage. Source: Marketplace Money | 31 May 2008 | 1:16 am
NEW YORK (Reuters) - U.S. technology shares rose on Friday as strong results from computer maker Dell Inc signaled that business and consumer spending was holding up, driving the Nasdaq to end the month up 4.6 percent.
NEW YORK (Reuters) - U.S. consumer confidence fell to a
28-year low in May, a survey showed on Friday, as soaring
prices for food and fuel soured sentiment and pushed long-term
inflation expectations to the highest in more than a decade.
As part of a potential class action settlement with TransUnion this week, consumers are going to be able to get a free copy of their credit score. Host Tess Vigeland talks with economics editor Chris Farrell about this new service. Source: Marketplace Money | 31 May 2008 | 12:56 am
The last time the tourism industry was hit by an economic downturn was after the Asian crisis in 2000.
But that will be just a blip compared to what operators are now facing, says Paul Yeo, head of the inbound tour operators council... Source: New Zealand Herald - Business | 31 May 2008 | 12:30 am
Check out MarketWatch.com over the weekend for more news and features. We’ll be covering the key meeting of the Democratic Party as they wrestle with how to award delegates from the disputed Michigan and Florida primaries. Weekend features, meanwhile, include a look at how recent merger speculation may affect the beer industry, a look at the Chinese yuan and a package of stories about how you make your dollar go farther overseas in this expensive summer travel season.
_About 13,000 cans of Calcilo XD Low-Calcium/Vitamin D-Free Infant Formula with Iron, manufactured by Abbott Nutrition of Columbus, Ohio, because small amounts of air may have entered the Source: Infocious RSS raw feed - channel BNewsBusiness | 31 May 2008 | 12:10 am
Silverjet's chief executive has blamed City analysts rather than the rocketing oil price for the collapse of the all-business class airline. Source: Telegraph Business | 31 May 2008 | 12:04 am
Green Party co-leader Jeanette Fitzsimons has called on Fonterra to show some heart and challenged them to price milk and dairy products at a price New Zealanders can afford.
Speaking at the party's annual conference today, Ms... Source: New Zealand Herald - Business | 31 May 2008 | 12:00 am
A mutual-fund manager whose firm is among Yahoo’s biggest shareholders is keeping an open mind about alternative alliances between the company and Google or Microsoft, while maintaining that the best course for Yahoo is to negotiate its own sale.
The Securities and Exchange Commission is exploring whether credit-rating agencies that rate security or bond investments should also be required to rank how risky they are. Host Tess Vigeland talks to corporate law professor Eric Talley. Source: Marketplace Money | 30 May 2008 | 11:37 pm
Fidelity Investments wants more of the index fund business, so it's trying to lure customers away from rival Vanguard by taking out full-page newspaper ads boasting that Fidelity has lower expenses. Nancy Marshall Genzer has the story Source: Marketplace Money | 30 May 2008 | 11:18 pm
The dispute over ownership of BP’s joint venture with Russia erupted again
yesterday as a senior director abruptly resigned after admitting he could no
longer help to resolve the issue. Source: Latest Business News from Times Online | 30 May 2008 | 11:00 pm
Broadband bills are likely to rise after Ofcom, the telecoms regulator, said
it was reviewing the amount that BT can charge operators for access to its
telecoms services. Source: Latest Business News from Times Online | 30 May 2008 | 11:00 pm
It is decision time this weekend for shareholders in Royal Bank of Scotland.
They have already approved the bank’s drastic plan to raise £12 billion in
fresh equity, the biggest capital raising in British stock market history.
Now they have to decide whether individually to take up their rights and buy
the new shares. Source: Latest Business News from Times Online | 30 May 2008 | 11:00 pm
Pizza Hut, the world's largest pizza chain, with more than 11,000 stores and
$10 billion ($£5 billion) in annual sales, celebrates its 50th birthday today. Source: Latest Business News from Times Online | 30 May 2008 | 11:00 pm
HSBC bosses fought off a shareholder revolt over executive pay yesterday as
almost one in five shareholders failed to approve the bank's remuneration
scheme at its annual general meeting in London. Source: Latest Business News from Times Online | 30 May 2008 | 11:00 pm
BG Group was dealt a surprise blow yesterday when Origin Energy, the leading
player in the fast-growing Australian coal-seam gas sector, spurned an
improved A$13.6 billion ($£6.6 billion) takeover offer. The British gas
producer said that it was reviewing its options after Origin cited the
increased value of its reserves of methane in rejecting A$15.50 cash per
share.$ Source: Latest Business News from Times Online | 30 May 2008 | 11:00 pm
SMG, the media group, has confirmed plans to sell Virgin Radio to Absolute
Radio for £53.2 million, as the new owner has said that it will undertake a
£15 million rebranding exercise. Source: Latest Business News from Times Online | 30 May 2008 | 11:00 pm
The global airline industry is facing a recession far more severe than the
slowdown endured after the terrorist attacks of 2001, a leading aviation
expert claims. Source: Latest Business News from Times Online | 30 May 2008 | 11:00 pm
Next and Asda are locked in a legal battle over claims that Britain's
second-biggest supermarket chain has copied the fashion retailer's clothing
designs. Source: Latest Business News from Times Online | 30 May 2008 | 11:00 pm
An influential coalition of Fortune 500 companies and environmental groups that was formed to support climate-change legislation has splintered over the Lieberman-Warner bill that is headed next week to the Senate floor.
DETROIT (Reuters) - Billionaire investor Kirk Kerkorian on Friday said he would move ahead with a tender offer for Ford Motor Co shares, signaling a bigger bet on the automaker's turnaround despite the recent slump in its stock and lowered financial outlook.
Sovereign wealth funds have provided more than half the equity for the BlackRock fund that bought $15bn of troubled mortgage debt from UBS this month, people with knowledge of the matter say Source: FT.com - US homepage | 30 May 2008 | 10:35 pm
The British Bankers Association, which oversees the London interbank offered rate – one of the most important financial indicators – decided that despite mounting criticism it would not change the way the rate is calculated Source: FT.com - US homepage | 30 May 2008 | 10:32 pm
United Airlines and US Airways halt plans to merge, say the parent companies of the two US carriers. Source: BBC News | Business | World Edition | 30 May 2008 | 10:21 pm
One of the great things about shopping on sites like Amazon has been not having to pay a dime in taxes (or shipping, if you've spent enough). Since the dawn of Web commerce, the rule was that as long as a retailer didn't have a physical presence in the shopper's state, the company didn't collect a sales tax.
SAN FRANCISCO (MarketWatch) -- The rate of fiscal stimulus payments slowed in the fifth week, with about 5.8 million payments sent in the week ending May 30, compared with 6.2 million a week earlier, says the U.S. Treasury.
Ford Motor Co. plans to build its new Fiesta subcompact at a factory near Mexico City for sale in the U.S., the company said Friday. Ford plans to retool its Cuautitlan Assembly Plant... Source: Infocious RSS raw feed - channel BNewsBusiness | 30 May 2008 | 10:14 pm
CHICAGO (Reuters) - UAL Corp's United Airlines and US Airways Group said on Friday they would not merge, a decision that experts said effectively kills the chances of further U.S. airline consolidation this year.
Maine's annual lobster catch was down 15 percent last year. But a pair of lobster-catching brothers came up with a plan to beat the economic odds -- they rent their traps to their customers and FedEx them the catch. Source: Marketplace Money | 30 May 2008 | 10:13 pm
Imaging products company Eastman Kodak said Friday it will raise prices on a "select range of consumable products" across its business lines by as much as 20 percent. The company said... Source: Infocious RSS raw feed - channel BNewsBusiness | 30 May 2008 | 10:06 pm
NEW YORK (Reuters) - Bear Stearns' two top economists, David Malpass and John Ryding, will not join JPMorgan Chase & Co, which is set to close its purchase of Bear, a source familiar with the situation said on Friday.
Tech stocks rallied for the fourth session in a row on Friday, on Dell's improved earnings. But the broader market struggled amid rising oil and gas prices, and a mix of economic news that did little to temper fears about a slowdown.
The Treasury Department said Friday it sent out 5.7 million economic stimulus payments this week, totaling more than $4 billion, as part of the government's plan to reinvigorate the nation's sluggish economy.
AP - The first round of economic stimulus checks gave a boost to personal incomes in April but a huge question remains: Will people spend the checks quickly enough to keep the economy afloat?
As the summer beer-drinking season gets ready to kick into gear, reports are swirling that Anheuser-Busch could be the target of a buyout attempt by Belgian-based (but Brazilian-run) InBev in a deal that could put the sole remaining big-cap American brewer into foreign hands.
Reuters - U.S. technology shares rose on Friday
as strong results from computer maker Dell Inc
signaled that business and consumer spending was holding up,
driving the Nasdaq to end the month up 4.6 percent.
United Airlines turned its attention to securing a marketing alliance with Continental Airlines after the carrier shelved merger talks with another rival, US Airways, over concerns that the costs to combine the companies would be too great Source: FT.com - US homepage | 30 May 2008 | 9:09 pm
Wall Street stocks were mixed, but remained ahead for the week and the month, as data showing moderating inflation and a modest rally in commodity related and technology stocks balanced against concerns about the health of the US consumer Source: FT.com - US homepage | 30 May 2008 | 9:02 pm
Eastman Kodak Co. (NYSE: EK) announced today that it will increase prices on certain consumable products by up to 20%. You can guess the reason: soaring materials costs and the rise of petroleum. Kodak's implementation date is July 1, and this will be rolled out by groups and by geography over the next few weeks. The company said the worldwide price increases should give it a break over some of the impacts of spiking costs in raw material. As it is still a mega-consumer of silver costs and as it has energy intensive demands, it isn't hard to fathom that...
Gold prices rebounded Friday after the dollar weakened and crude oil rose modestly _ inflationary moves that pointed investors to the relative safety of precious metals. Other... Source: Infocious RSS raw feed - channel BNewsBusiness | 30 May 2008 | 8:49 pm
Reuters - U.S. consumer confidence fell to a
28-year low in May, a survey showed on Friday, as soaring
prices for food and fuel soured sentiment and pushed long-term
inflation expectations to the highest in more than a decade.
Amid soaring oil prices that some say are caused by nothing more than rampant speculation, the government Thursday announced a wide ranging probe into oil price manipulation and said it would get more information on the effect investors are having on the market.
The tank is near empty as we drive across the Brooklyn Bridge in search of a cheap fill-up outside of Manhattan. Approaching the brownstone-packed Park Slope neighborhood, I type the zip code "11217" on my laptop which is connected via aircard to automotive.com, one of at least a half-dozen sites that promise to locate the lowest-priced gas station wherever you may be driving in the country. Automotive.com gets our first test because the firm promoted itself to CNN.
Tony Blair, former UK prime minister, launched his own charity aiming to raise hundreds of millions of dollars to reduce religious conflict, in a move he described as 'the rest of my life's work' Source: FT.com - US homepage | 30 May 2008 | 7:46 pm
Brian May 'shocked and disappointed' to discover that GCap had sold the digital radio station without informing him of the change of plans Source: FT.com - US homepage | 30 May 2008 | 7:39 pm
US Air (LCC) Airline breaks of talks with United (UAUA) and stock runs down to $4 from 52-week high of $36.81. Brunswick Corporation (BC) Concerns about boating business and downgrade earlier in the week. Drops to $13.39 from 52-week high of $34.90. Harris Interactive (HPOL) No visible cause but stock nose dives to $1.80 from 52-week high of $5.67. Jetblue (JBLU) Raises money and causes viability and dilutions concerns. Sells off to $3.90 from 52-week high of $11.99. Douglas A. McIntyre
Eurozone inflation surged to the highest rate for 16 years on the back of sharply higher oil prices as consumer spending in the 15-country region showed further signs of weakness Source: FT.com - US homepage | 30 May 2008 | 7:30 pm
Property investor St Laurence Property & Finance Limited has boosted annual net profit by 22 per cent to $28.5 million.
The result for the year ended March 31 included net property valuation gains of $16.5m, down from $23.9m a... Source: New Zealand Herald - Business | 30 May 2008 | 7:30 pm
MONTREAL (Reuters) - Former U.S. Federal Reserve Chairman Alan Greenspan said on Friday that he does not expect another "bubble" in world markets for a long time, and that central banks at any rate do not control the long-term interest rates that can be related to bubbles.
It's hard to find a TV show or movie these days that doesn't have name-brand products in the scenes. Amy Scott takes a look at where product placement is headed. Source: Marketplace | 30 May 2008 | 6:40 pm
The job tips given to graduates today are all quantity, no quality. Author and commentator Megan Hustad calls for tossing out today's motivational slogans for some good old-fashioned advice. Source: Marketplace | 30 May 2008 | 6:40 pm
Anti-immigrant violence in South Africa has forced tens of thousands from their homes and could have a long-lasting economic impact on the region. Gretchen Wilson reports from outside Johannesburg. Source: Marketplace | 30 May 2008 | 6:40 pm
BOSTON (Reuters) - Falling home prices continue to threaten U.S. economic growth, and banks could face trouble from rising delinquencies in consumer debt, Boston Federal Reserve President Eric Rosengren said on Friday.
Your credit score could mean all the difference in the world when you need to borrow money. Thanks to a massive class-action lawsuit, TransUnion will be offering millions a free peek at theirs. Jill Barshay explains. Source: Marketplace | 30 May 2008 | 6:40 pm
Despite a nearly 18% drop in Ford's stock since he offered to buy 20 million shares of the ailing automaker, Kirk Kerkorian says the deal is still on the table. Alisa Roth examines his motivation. Source: Marketplace | 30 May 2008 | 6:40 pm
There's been plenty of talk about speculation driving up oil prices, but big investors don't deserve all the blame. Kai Ryssdal asks energy analyst Peter Beutel where all those billions invested in oil came from. Source: Marketplace | 30 May 2008 | 6:40 pm
Cabletalk Group has reported a full year net loss of $6.8 million, compared to a loss in the previous year of $492,000. Last week, shareholders approved plans for Cabletalk to sell its telecommunications contractor Astute Ltd to Downer... Source: New Zealand Herald - Business | 30 May 2008 | 6:30 pm
A recent report based on census data showed that women who out-earned their male suitors and partners made them feel uncomfortable and inadequate. Sean Cole tries to find out if this is really true. Source: Marketplace Money | 30 May 2008 | 6:15 pm
AFP - German retail sales released Friday posted a surprise monthly fall in April, adding to evidence that rising prices are keeping consumers away from the shops.
Reuters - Former Federal Reserve Chairman Alan
Greenspan said on Friday that he does not expect another
"bubble" in world markets for a long time, and that central
banks at any rate do not control the long-term interest rates
that can be related to bubbles.
A board member of BP's Russian oil venture resigned amid a deepening standoff for control of the company after its Russian billionaire shareholders demanded the removal of the venture's BP-backed chief executive, Robert Dudley Source: FT.com - US homepage | 30 May 2008 | 5:51 pm
Beijing's official tourism body is urging tour operators to stop selling holidays to France, Paris claims. Source: BBC News | Business | World Edition | 30 May 2008 | 5:37 pm
Oil prices fell to near US$126 a barrel yesterday in Asia, extending a decline of more than US$4 in the previous session despite a huge unexpected drop in US crude oil stocks.
The US Energy Department said delays in unloading... Source: New Zealand Herald - Business | 30 May 2008 | 5:30 pm
BG Group said all options were being considered in its pursuit of Origin Energy after the Australian energy group rejected its revised A$13.6bn (US$13bn) bid Source: FT.com - US homepage | 30 May 2008 | 5:30 pm
When the accuracy of one of the most important benchmarks in the global financial system is called into question, what is the response?
Punt.
The metaphor, from American football, may not be understood by the British Bankers' Association, the trade group that oversees the London interbank offered rate, or Libor.
But its members are certainly aware that they have been under pressure in recent weeks to overhaul the system for setting the rate after the Wall Street Journal reported on the growing suspicions that some banks may be underreporting the rates they are paying for short-term loans.
Some $150 trillion worth of financial products traded around the world are indexed to Libor.
"The next time Libor spikes, you don't want market participants looking at Libor and wondering whether it's a completely artificial number or shows a dislocation in borrowing costs,'' Brian Yelvington, a strategist at bond research firm CreditSights, told Bloomberg News.
The association, however, is making no changes, leaving the composition of the panels of banks that determine the rates in 10 currencies unchanged. It adds that it "will be strengthening the oversight of B.B.A. Libor. The details will be published in due course."
But John Zhu and Edward Hadas argue on Breakingviews.com that major changes to Libor are not needed.
"If the B.B.A. wants to do something to make Libor more attractive, it should tweak its calculations. For example, it could randomly discard a fixed number of polled quotes. That would make collusion even harder. But basically, Libor isn't broken, so there's no need to fix it."
Reuters - UAL Corp's United Airlines and
US Airways Group said on Friday they would not merge, a
decision that experts said effectively kills the chances of
further U.S. airline consolidation this year.
Oil prices are being pushed higher by Wall Street analysts repeatedly raising their forecasts, leading one investment bank to describe it as a repeat of the dotcom bubble of the late 1990s. Source: Telegraph Business | 30 May 2008 | 5:20 pm
The tyranny of distance looms large again.
Our tourism industry is bracing for what could be the biggest and ugliest effect of the US credit crunch to hit the New Zealand economy.
The financial crisis in New York and London... Source: New Zealand Herald - Business | 30 May 2008 | 5:00 pm
Despite lifting its payout to $9.6 billion yesterday Fonterra chief executive Andrew Ferrier has warned of increasing volatility in the dairy market.
Fonterra has boosted its forecast payout to $7.90 per kilogram of milksolids,... Source: New Zealand Herald - Business | 30 May 2008 | 5:00 pm
Two new executives hired by Telecom chief Paul Reynolds will complete his top-table team managing the country's biggest publicly listed company.
A former managing director for Tiger beer in Europe - New Zealander Alan Gourdie -... Source: New Zealand Herald - Business | 30 May 2008 | 5:00 pm
TVNZ's attacks on Sky TV are a sad indictment of the free-to-air broadcaster.
It clearly demonstrates that the state-owned operator has been completely outfoxed by the listed company and TVNZ is desperately trying to regain lost... Source: New Zealand Herald - Business | 30 May 2008 | 5:00 pm
Exceptionally strong new housing and apartment approval figures out yesterday surprised economists.
ASB chief economist Nick Tuffley said the latest housing data was almost hard to believe.
"We expected a degree of rebound in... Source: New Zealand Herald - Business | 30 May 2008 | 5:00 pm
Business airline Silverjet calls in administrators after financial problems forced it to suspend all of its flights. Source: BBC News | Business | World Edition | 30 May 2008 | 4:35 pm
WASHINGTON (Reuters) - U.S. antitrust regulators have given billionaire investor Carl Icahn the go-ahead to purchase large blocks of Yahoo stock, the Federal Trade Commission said on Friday.
The Reuters/University of Michigan Surveys of Consumers said the final reading in May for its index of confidence fell to 59.8 from April's 62.6. According to Reuters, "May's reading was the lowest since 58.7 in June 1980." A look at the methodology makes the value of the results look very thin, even though they are picked up by thousands of media outlets and often move the stock market up or down. During the survey, which is based on only 500 or so interviews, those being polled are asked 50 core questions. One has to ask what happens to the people...
Reuters - Billionaire investor Kirk Kerkorian on
Friday said he would move ahead with a tender offer for Ford
Motor Co shares, signaling a bigger bet on the
automaker's turnaround despite the recent slump in its stock
and lowered financial outlook.
By virtue of mathematical coincidence, every million dollars that Netflix C.E.O. Reed Hastings spends to build a digital download service for his DVD-by-mail company sucks away roughly one penny of profit from each share of its stock.
The simplicity of the calculation could grow increasingly inconvenient for Hastings as he and his management team fend off criticism from investors who prefer profits in their pockets rather than risk building a parallel business of streaming movies and TV shows over the internet.
"We're spending a lot of money," chief financial officer Barry McCarthy said at an analyst conference earlier this week, "and if we fall on our face, I have no doubt investors will vote us off the island."
The death of the DVD looms over Netflix like an elderly uncle who pays the rent. When he finally moves on, Netflix had better have another source of income.
But at what cost? Hastings spent $40 million last year to build up a library of 10,000 movies and TV shows that its 8 million subscribers can watch online. He's partnering with consumer electronics companies to build Netflix streaming capabilities into TVs, DVD players and set-top boxes.
As inspirational as it sounds, transformation costs money—as much as $70 million this year, or 70 cents a share in 2008 profits. And investors want to know in the cold language of accounting what the financial benefit is for each dollar spent on buying the rights to show a movie online.
Hastings this week asked investors to bear with him for a few years as he primes the pump for a new business model. To that end, he invented a metric that he asks analysts to use in judging his online strategy: The number of TVs and other internet-connected consumer electronics with Netflix software built in.
Hastings calls it the Dolby model—making Netflix reception as ubiquitous as the noise-reduction technology. LG Electronics, the South Korean company, is already on board, as is a startup company called Roku that makes a $100 Netflix-on-TV box.
"I think the way to measure us is the number of millions of Netflix-ready devices installed in homes," Hastings told investors. "If that's a big number at the end of '09, then our strategic investment has greatly paid off. If it's a small number, you have every right to be whiny about management having wasted a lot of money."
Analysts were not convinced. Michael Pachter, who covers Netflix for Wedbush Morgan Securities, said he would prefer that Netflix stick to selling movie-rental subscriptions, not giving investment analysis. "I don't really care what they think we should focus on," he said. "I would never presume to tell them how to do their job."
Pachter has pushed the company to disclose more about the nuts and bolts of its online investment. He points out that if Netflix spends $70 million this year for a service used by 100,000 customers, it works out to $700 per customer.
"I would say they're crazy; it's not worth it," Pachter said. The math only makes sense as the number of users increases dramatically, he added. At 7 million users of Netflix online, for example, the annual investment comes to $10 per customer, or 85 cents a month. "I would support that," Pachter said.
For now, Netflix doesn't disclose these kinds of figures. The $70 million figure is Pachter's estimate based on data in the company's first-quarter earnings release. He reckons that more than 1 million Netflix subscribers have tried the online feature, but there's no official word from the company. "They have an overdeveloped sense of secrecy in the name of competitive disadvantage," Pachter said.
If enough analysts go for it, Hastings' pro forma figure of installed Netflix-ready devices would be a stroke of investor-relations brilliance. The company could win enough support to fend off short-term-minded investors who want to be rich and retired in Hawaii by the time the DVD business dies in 20 years.
Hastings may already know that he's got this pro forma figure covered. Pachter, who also covers videogames, says he is confident that Netflix will soon unveil a partnership with Microsoft to make its service available on Xbox 360 consoles—of which there are 10 million in the U.S. (Hastings sits on Microsoft's board.)
"I'm kind of baffled why the two companies don't think they should announce that before it's up and ready for the consumer," Pachter said.
Netflix spokesman Steve Swasey declined to comment on unannounced partners.
NEW YORK (Reuters) - Tiffany & Co posted higher-than-expected quarterly profit on Friday, boosted by strong sales in Europe, the Asia-Pacific region and to tourists at its Manhattan flagship store, and the U.S. jeweler raised its full-year outlook, pushing its shares up 4 percent.
The billionaire owners of the Russian side of TNK-BP call for the resignation of its American chief executive. Source: BBC News | Business | World Edition | 30 May 2008 | 2:20 pm
Shares of JetBlue Airways Corporation (NASDAQ: JBLU) are seeing some extra pressure this morning after the company announced the pricing of a previously announced convertible debt offering of 5.5% convertible bonds that mature in 2038. The size of the offering was also kicked up from $160 million to $175 million. There were two separate issues of $87.5 million. One series converts to 220.6288 per $1,000.00 in principal face value for a conversion price of approximately $4.53 per share. The second series has a convertible rate of 225.2252 shares per $1,000 principal face value for a conversion price of approximately $4.44...
We've seen several analyst calls on Wall Street this morning out of the oil patch, and here are some of the key calls: Hess (NYSE: HES), Sunoco (NYSE: SUN), and Tesoro (NYSE: TSO) were all started as "HOLD" ratings at Citigroup. Marathon Oil (NYSE: MRO) and Valero Energy (NYSE: VLO) were started with "BUY" ratings at Citigroup. Berry Petroleum (NYSE: BRY) was started as Outperform at Morgan Keegan. SW Energy (NYSE: SWN) was downgraded to Market Perform from Outperform at FBR. Jon C. Ogg May 30, 2008
In the last week or so, everybody seems to have weighed in with an opinion on whether or not speculation is responsible for the rapid recent rise in crude oil prices. Until yesterday, however, the speculation about speculation resembled Mark Twain's observation that everybody talks about the weather, but nobody does anything about it. Yesterday, the US Commodities Futures Trading Commission (CFTC) announced that it had reached an agreement with the UK's equivalent of the SEC and the ICE Futures Europe (NYSE:ICE) under which ICE would provide a daily report on large trader positions in the UK WTI crude oil...
These are ten of the analyst calls we are focusing on this Friday morning: ADC Telecom (NASDAQ: ADCT) raised to Overweight at JPMorgan. AnnTaylor (NYSE: ANN) raised to Outperform at FBR. Ashland (NYSE: ASH) cut to Underweight at JPMorgan. ASM International (NASDAQ: ASMI) started as Underpeform at Jefferies. Clean Harbors (NASDAQ: CLHB) raised to Outperform at Robert W. Baird. Costco (NASDAQ: COST) cut to Neutral at Piper Jaffray. Integrated Device Tech (NASDAQ: IDTI) cut to Neutral at Cowen & Co. J. Crew (NYSE: JCG) cut to Market Perform at Wachovia; cut to Sell at Citigroup. Marvell Tech (NASDAQ: MRVL) raised...
In these nervous times, a market tumble would cause most investors to pack up and run. Not Kirk Kerkorian.
The price of Ford Motor shares is 21 percent below Kerkorian's tender offer of $8.50 per share. But despite a provision in the offer that would allow him to withdraw it should the price of Ford fall more than 10 percent, Kerkorian's Tracinda Corp. is staying the course and waiving the condition.
"Tracinda continues to believe in Ford's management and turnaround efforts and remains committed to its offer for up to 20,000,000 shares of Ford common stock at a net per share offer price of $8.50," Kerkorian's investment company said in statement.
Kerkorian first disclosed that he had accumulated a 4.7 percent stake in Ford and was planning to buy as many as 20 million shares in April, just days after the company showed signs that it was turning a corner by announcing an unexpected profit for the first quarter.
Since then, however, the economy has only weakened and gasoline and steel prices have risen. The rapid deterioration in the market prompted Ford to announce last week that it was sharply cutting production in North America, especially that of large trucks and S.U.V.'s. The company also said it no longer expects to turn profitable in North America next year.
But Alan Mulally, the Ford C.E.O., has his believers. Many see Ford as Detroit's best hope, as it has been the most aggressive in working to reduce the number of its factories, workers, and dealers in North America.
As Paul Ingrassia wrote in the June issue of Condé Nast Portfolio, "Ford has the cleanest, most achievable recovery plan in Detroit."
It should not be forgotten, however, that for Kerkorian, auto love sometimes turns to rancor.
In 1995, he made an unsuccessful takeover bid for Chrysler. After Chrysler agreed to be acquired by Daimler-Benz in 1998, Kerkorian sued but lost in a Delaware court. When Daimler later put Chrylser up for sale last year, Kerkorian tried to present a bid, but was rebuffed.
Between Chrysler engagements, Kerkorian became the biggest individual shareholder in General Motors in 2005. He successfully pressed G.M. for a seat on the board, but he was less successful in trying to persuade the automaker to enter into an alliance with Renault of France and Nissan Motor of Japan.
The part-privatisation of rail operator Deutsche Bahn gets the green light from German politicians. Source: BBC News | Business | World Edition | 30 May 2008 | 11:40 am
The world's last major business-class only airline, Silverjet, has been forced to suspend its operations after a multi-million-pound cash injection from investors failed to materialise. Here is a timeline that charters the rapid rise and fall of the carrier. Source: Telegraph Business | 30 May 2008 | 11:25 am
The Indian economy expanded by 8.8% from January to March, but the pace of growth is slowing. Source: BBC News | Business | World Edition | 30 May 2008 | 11:16 am
Noel Forgeard, former co-chief executive of EADS, Europe's largest aerospace company, was charged today with insider trading. It is alleged that Mr Forgeard, 61, sold EADS shares ahead of an announcement that the company's Airbus division was having production problems with its A380 super-jumbo jet Source: Telegraph Business | 30 May 2008 | 10:50 am
An all-business-class airline seemed like a beautiful idea. But an ugly spike in jet-fuel costs has shut down another contender.
Silverjet, the London-based airline that flew to New York and Dubai, is ceasing operations after it failed to obtain $5 million in emergency funds. Its last transatlantic flight, from Newark International Airport, is scheduled to land at London Luton Airport at 3 p.m. local time.
Silverjet follows Maxjet Airways and Eos Airlines into the business-class-only graveyard. L'Avion continues to fly all business class between New York and Paris, and big European airlines like Lufthansa, Swiss, KLM, and Air France also offer the service on some routes.
As Joe Brancatelli wrote last summer, the appeal of such service is obvious:
"All-business-class flights that seat just 44 to 100 passengers may not sound as sexy as an 850-seat behemoth. But if you've been to an airport this summer and have endured the crowds, the lines, the delays, and the robotic in-flight service, you know that small can be truly beautiful."
Yet Silverjet never became profitable in its 16 months of existence. The Times of London estimates that the airline has recently been losing some £2 million a month ($4 million). In the last six months, as oil prices surged more than 40 percent, its costs became unbearable. Jet fuel can account for as much of 40 percent of an airline's expenses.
"This shows the pain that the airline industry is suffering," John Strickland, director of London's aviation specialist JLS Consulting Ltd., told Bloomberg News. "Silverjet was the last of a particular breed, but I think we'll see other failures across different parts of the market in the next 12 months."
Signs of trouble at Silverjet emerged last week when the company warned that an agreement on financing was falling apart. An affiliate of the Viceroy Fund, an international investor in luxury brands based in the United Arab Emirates, had apparently agreed to make an investment. Shares of Silverjet were suspended on the London Stock Exchange.
Lawrence Hunt, the chief executive of Silverjet, said today: "We are working actively with new investors who are prepared to inject new funds so we can recommence operations. If we are able to achieve this, we will make an announcement as soon as possible, and we hope to be able to bring you our very 'sivilised' flying experience again.
Gary Stoller of USA Today reports that there is still great interest in business-class-only service, but that many aviation experts say that it makes sense only for established, better-capitalized airlines to offer it on some routes. Other business-class-only airlines, like Air One, MGM Grand, and Legend, have been short-lived.
"Nobody learns from previous mistakes," Barbara Beyer, president of Avmark, an airline consultant in Vienna, Virginia, told the paper.
Moody's (MCO) primary ratings unit gives Ambac (ABK) and MBIA (MBI) "Aaa" ratings. Those ratings were in trouble, but when the two companies raised capital, they kept their Good Housekeeping seals. It turns out that Moody's has a small unit that looks at the credit markets much differently than most of the company's other analysts do. The little skunk-works is called Moody's Analytics. According to Bloomberg, "The official ratings of these companies say the insurers are in great shape; the alternative ratings say they're in dire danger of defaulting on their debts." That second set of ratings come from within...
It would not surprise many people to hear that there are not a ton of cellphone in Africa, especially when Egypt and South Africa are taking out of the mix. Nokia (NOK) wants to fix that. The company believes that as handset sales slow in Europe and the US, Africa will be the next big thing. According to Bloomberg "Nokia's bet that Africans will consider buying mobile-phone service to be as vital as paying 11 year-high corn prices stands a good chance of succeeding." It is a cynic's position and one that has a cruel underpinning as well. The plan...
A series of strikes last year means Royal Mail fails to meet its targets for delivering the post on time. Source: BBC News | Business | World Edition | 30 May 2008 | 10:08 am
Australia's biggest producer of gas from coal seams, Origin Energy, will start considering a break-up or partnership after rejecting a A$13.6 billion (£6.5bn) takeover offer from BG Group. Source: Telegraph Business | 30 May 2008 | 10:00 am
Poland asks the European Commission for more time to privatise its ailing shipyards, amid EU irritation over Polish state aid. Source: BBC News | Business | World Edition | 30 May 2008 | 9:06 am
Noel Forgeard, former boss of EADS, is placed under formal investigation over allegations of insider trading. Source: BBC News | Business | World Edition | 30 May 2008 | 9:00 am
AP - The first round of economic stimulus checks gave a boost to personal incomes in April but a huge question remains: Will people spend the checks quickly enough to keep the economy afloat?
Reuters - U.S. technology shares rose on Friday
as strong results from computer maker Dell Inc
signaled that business and consumer spending was holding up,
driving the Nasdaq to end the month up 4.6 percent.
Reuters - U.S. consumer confidence fell to a
28-year low in May, a survey showed on Friday, as soaring
prices for food and fuel soured sentiment and pushed long-term
inflation expectations to the highest in more than a decade.
AFP - German retail sales released Friday posted a surprise monthly fall in April, adding to evidence that rising prices are keeping consumers away from the shops.
Reuters - Former Federal Reserve Chairman Alan
Greenspan said on Friday that he does not expect another
"bubble" in world markets for a long time, and that central
banks at any rate do not control the long-term interest rates
that can be related to bubbles.
Reuters - UAL Corp's United Airlines and
US Airways Group said on Friday they would not merge, a
decision that experts said effectively kills the chances of
further U.S. airline consolidation this year.
Reuters - Billionaire investor Kirk Kerkorian on
Friday said he would move ahead with a tender offer for Ford
Motor Co shares, signaling a bigger bet on the
automaker's turnaround despite the recent slump in its stock
and lowered financial outlook.