Archive for June 13th, 2008Filed under: Deals, Market matters, JPMorgan Chase (JPM), Bank of America (BAC), Countrywide Financial (CFC), Washington Mutual (WM), Cramer on BloggingStocks
The big difference between 1990s bank implosion and this one is that nobody at other banks sees any value in owning the ones that are faltering. Key (NYSE: KEY) (Cramer’s Take) is the latest example. Key’s everywhere, it is grandfathered to be in every state. You would think there was some bank out there that would want it. Nope. No one. So they’ve to do this down round that destroys the common. Nobody wants Sovereign (NYSE: SOV) (Cramer’s Take) either. Or Nat City (NYSE: NCC) (Cramer’s Take). Or Washington Mutual (NYSE: WM) (Cramer’s Take). The latter’s really interesting now that Hudson City (NYSE: HCBK) (Cramer’s Take) has passed it in market size because it states that all of those branches and all of that deposit base just doesn’t mean anything. Or worse, the losses are so bad that unless the Fed takes the losses and puts them on its balance sheet, there can be no consolidation. Yet consolidation is the only way to go. Now, we’re much more laissez-faire then we were in 1990. The administration then felt engaged to move quickly to set up mergers instead of the charade of down rounds. I call them charades because none of them yet has produced a return for anyone who has put the money up. Bank of America’s (NYSE: BAC) (Cramer’s Take) Countrywide (NYSE: CFC) (Cramer’s Take) charade is the biggest of all. I make it 50-50 that CFC brings down BAC. I am not kidding. That’s how badly that deal was thought out and how much bad product there is on CFC’s books. Bear wasn’t a bank. Its failure was about counter party risk, basically whether Bear could take down JPMorgan (NYSE: JPM) (Cramer’s Take), which was on the hook for the other side for a bunch of Bear trades, plus the Bear portfolio, which I am told was the worst of the worst. Banks, on the other hand, do have worthwhile deposit bases. You can see that if the Resolution Trust for mortgages had been set up, the mergers would have occurred already with the surviving bank coming out strong and the defaults on the Fed’s balance sheets. Without it we are Japan, keeping everyone afloat. I expect many more Key banks. The only way out of this jam right now is to hope that the value funds don’t have their money taken away through horrid performance. Then we’ll be okay. But it will be elongated and stubborn and not almost done as we still don’t know what properties were insured by insurance that is running out, and we don’t know HELOC dispersal and losses by geography and vintage. Too many wide open questions. Just think about who is the next Key and you won’t make a mistake next time. Random musings: Doug’s dead right about Lehman’s prospects as he has been all along. ————————————————————– Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com’s sites and serves as an adviser to the company’s CEO. At the time of publication, Cramer had no positions in the stocks mentioned.
13
06
2008
 
Anheuser-Busch (BUD) tries to save itself with merger, a Yahoo!-like movePosted by: in Latest NewsFiled under: Deals, Management, Microsoft (MSFT), Yahoo! (YHOO), Anheuser-Busch Cos (BUD), Mexico Anheuser-Busch (NYSE: BUD) wants to stay out of the hands of potential acquirer InBev. It seems willing to go to great lengths to do that. Shareholders of the brewery may get crushed in the process. To get itself out of its jam, Anheuser-Busch has approached Grupo Modelo, the massive Mexican brewer, about a merger. The American company already owns about half of the Modelo. According to The Wall Street Journal, “Acquiring the rest of the Mexican brewer could make the combined company too pricey for InBev.” A Modelo deal might help the Busch family keep their jobs, but the shareholders will nearly certainly get hammered. The InBev offer for the company is $65. Looking at a chart of Anheuser-Busch shares going back to 1983, the stock has never traded anywhere near that level. In some ways the Anheuser-Busch move looks like Yahoo!’s (NASDAQ: YHOO) rejection of the Microsoft (NASDAQ: MSFT) buy-out offer. Shareholders are never going to get this kind of premium again. The “founders” get to stay in charge. Douglas A. McIntyre is an editor at 247wallst.com.
Read | Permalink | Email this | Linking Blogs | Comments Filed under: Before the bell, Earnings reports, Deals, Apple Inc (AAPL), Pfizer (PFE), Ford Motor (F), Exxon Mobil (XOM), International Business Machines (IBM), Sprint Nextel Corp (S), Anheuser-Busch Cos (BUD), Research in Motion (RIMM), Palm Inc (PALM), Lehman Br Holdings (LEH)
Anheuser-Busch Cos. (NYSE: BUD) is holding preliminary speaks with rival Grupo Modelo SAB (Corona maker), according to The Wall Street Journal, in an attempt to thwart the $46 billion unsolicited offer it received Belgian brewer InBev SA. Exxon Mobil (NYSE: XOM) said it plans to exit its U.S. retail gasoline business over the next few years, shedding the 820 service stations it still owns and operates and another 1,400 company-owned outlets operated by dealers of its branded fuels. Separately it also stated it could spend more than $100 million for offshore oil exploration in the Philippines. Tracinda Corp. on Friday stated it will purchase 20 million shares of Ford’s (NYSE: F) common stock in a tender offer at a purchase price of $8.50 per share, for a total purchase price of $170 million. That would increase billionaire Kirk Kerkorian, who controls Tracinda Corp., stake in Ford to 5.5%. Shares are up 2% in premarket trading.
Lehman Brothers (NYSE: LEH) shares may experience further volatility as there are reports Chief Executive Richard Fuld is looking for outside capital, possibly from a sovereign wealth fund or a U.S. investor. Meanwhile, speculation continues that after ousting CFO and COO Thursday, Fuld’s days are numbered too. The Wall Street Journal states that Lehman “hopes to restore investor confidence by turning to a seasoned trading executive” such as new president McDade. Pfizer (NYSE: PFE) might make a counter offer for Ranbaxy Laboratories, according to a report in India’s Business Standard. Japan’s Daiichi Sankyo offered $4.6 billion for the Indian generic drug maker. This columnist, from Economist.com, thinks that with the new iPhone Apple Inc. (NASDAQ: AAPL) has recently unveiled, not only Palm (NASDAQ: PALM) and Research in Motion (NASDAQ: RIMM) ought to be “seriously concerned,” but Sprint (NYSE: S) too as Apple is pushing toward LTE (4G) while Sprint is supporting the WiMax. IBM (NYSE: IBM) is holding an analysts meeting today, some news could come out of there.
Filed under: Before the bell, Earnings reports, Forecasts, Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Coca-Cola (KO), Market matters, US Airways Group (LCC), Economic data, Housing
On Thursday, U.S. stocks closed with gains following a surprisingly strong retail sales, but the gains were tempered as the day went on due to rising oil prices and the Yahoo! announcement about the failed Microsoft talks.The Dow industrials ended 57 points, or 0.48%, higher, the S&P 500 rose 4 points, or 0.33%, and the Nasdaq Composite rose 10 points, or 0.43%. What might yet change the atmosphere on Wall Street is the Consumer Price Index is scheduled for release at 8:30 a.m. EDT. Economists surveyed by Briefing.com anticipate CPI to show an increase of 0.5% in Might following a 0.2% rise in April. Core CPI, which excludes the volatile food and energy prices, is expected to have risen 0.2% in May, after it rose 0.1% the month before. At 10:00 a.m., the preliminary University of Michigan consumer confidence gauge for June is also due. Meanwhile, foreclosures data was already released and the number of U.S. homeowners forced into foreclosure further last month, up almost 50% compared with a year earlier,and up 7% from April, according to RealtyTrac Inc.. The main corporate headline this morning no doubt has to do with Yahoo! (NASDAQ: YHOO). The web portal stated speaks with Microsoft Corp. (NASDAQ: MSFT) have ended and announced late Thursday an online ad partnership with Google Inc. (NASDAQ: GOOG), which could be worth $800 million in revenue. Yahoo said it believes the ad deal would be superior than selling its search business to Microsoft, but some are concerned anti-trust issues would derail that deal too. Yahoo shares sank 10% on Thursday. Also US Airways (NYSE: LCC) said that it’s slicing capacity on routes by up to 8%, increasing fees and shedding 1,700 employees. LCC shares shut down nearly 16%. And while we’ve grown accustomed to problems at automakers and airlines, as well as the occasional retailer, arising from the economic slowdown, it seems that even Coca Cola (NYSE: KO) is not immune. It may be active as Coca Cola Hellenic Bottling (NYSE: CCH) warned over 2008 earnings, citing economic conditions in Italy, Ukraine and Romania, adverse weather in Central Europe, rising plastic prices and a strike in Greece.
Business and Financial News - New York Times Business with Reuters - International Herald Tribune Small Business and Self-Employed One-Stop Resource Home - Doing Business - The World Bank Group Sacramento Business, Housing Market News | Sacramento Bee Yellow Pages : Superpages Yellow Pages, Maps, Driving Directions … Filed under: Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)
The deal will be delayed a few months for regulatory approval. Under its terms, Yahoo will select which search term queries it offers Google paid search results for, the number and placement of Google results and how they are mixed with its own results and those of other providers. Yahoo stated either party can end the agreement in the event of a change in control. If control of Yahoo changes hands in the next 24 months, Yahoo must pay a termination fee of $250 million. Poor Carl Icahn. He could have had a $33 a share deal from Microsoft Corp. (NASDAQ: MSFT), now all he has is 33 cents a share from Google. Cover your ears before his moaning and groaning begins. Yahoo shares are up 1% after hours after losing 10% during regular trading. Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.
Filed under: Deals, Microsoft (MSFT), Yahoo! (YHOO)
According to Yahoo: “Microsoft is not interested in pursuing an acquisition of all of Yahoo!, even at the price range it had previously recommended. With respect to an acquisition of Yahoo!’s search business alone that Microsoft had proposed, Yahoo!’s Board of Directors rejected it for three reasons:
Expect more loud squawking noises from Carl Icahn to follow. Cover your ears! Peter Cohan is President of Peter S. Cohan & Associates. He also instructs management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.
Filed under: Deals, Rumors, Google (GOOG), Yahoo! (YHOO)
Michael Arrington at TechCrunch states his sources are insisting it’s only a search partnership, a deal that would probably have far less impact on the fate of Yahoo! — it might signal more things to come, but let’s recall that a “global advertising partnership” deal between Google and Time Warner, Inc. (NYSE: TWX)’s AOL in December 2005, in which Google bought 5% of the internet company, never (yet) materialized into the acquisition many expected. No major news outlet has the story yet, and there’s no announcement on Yahoo!’s investor relations page. After falling 80 cents today, the stock was rebounding swiftly on the rumors, at $25.97 at 2:10 p.m. |
TheStreet.com’s Jim Cramer says that rather than merging, these banks will have to raise money through dilutive offerings. 
U.S. stock futures were mixed to lower early Friday morning as investors awaited data on inflation. News about companies slicing workforce and Yahoo!’s failed speaks with Microsoft also soured the mood.
As anticipated, 
A joint announcement by 
Powered by WordPress, Mandigo theme by tom.
Entries (RSS)
and Comments (RSS).