Filed under: China

Education is certainly a big deal in China. In fact, one of the hottest IPOs over the past few years has been the New Oriental Education & Technology Group (NYSE: EDU), which provides English instruction in China.

Well, US investors will have another chance for another education play from China: Noah Education Holdings. This week, the company filed for a public offering.

Basically, the company is a provider of interactive education content for a variety of subjects like English, math, history, physics and so on (there are more than 28,000 titles).

Interestingly enough, the primary delivery platform for the content is from handheld digital learning devices (DLDs). The systems have also proven useful for e-dictionaries.

And the financial looks good. As of last year, Noah’s revenues were $72.9 million and net income came to $8.7 million.

The lead underwriter is Deutsche Bank Securities and the proposed ticker is “NED.”

You can find the IPO prospectus at the SEC’s website. Also, if you want to check out other IPOs, click here.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

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Filed under: Law, Scandals

Former NFL Pro Bowler Dwight Sean Jones has been charged with violations of securities for refusing to allow SEC examiners to examine records of his business dealings.

According to the SEC’s administrative proceeding (PDF file — may take awhile to load) posted on the commission’s website, “After repeatedly failing to respond to the Commission staff, the Order alleges, Jones ultimately claimed that all his records had either been destroyed in a fire or inadvertently sold by a storage company.”

Don’t you hate it when that happens?

A few months ago, Jones was indicted on charges that he and four other men embarked on a multi-million dollar mortgage fraud scheme. According to an Associated Press report of that indictment, Jones has been in and out of financial woes in recent years: “In December 2003 arbitrator Roger Kaplan ruled that he violated National Football League Players Association (NFLPA) regulations in his financial dealings with NFL player Ebenezer Ekuban, leading to Ekuban declaring bankruptcy in 2003. Former player Cris Dishman won a $396,000 judgment against Jones involving a bad investment. Jones received a two-year suspension, prohibiting him from representing NFL players until Feb. 26, 2005.”

I have to ask: On the scale of really, really, exceptionally dumb crimes to commit, doesn’t ripping off a 6′3″, 275 pound defensive end have to rank pretty high?

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Filed under: Google (GOOG), Yahoo! (YHOO), Viacom (VIA), News Corp’B’ (NWS)

As Tom Taulli has reported, Microsoft Corp. (NASDAQ: MSFT) is in talks to buy a stake as high as 5% in Facebook, valuing it at $10 billion. This stake means different things to Microsoft than it does to Facebook.

But first, a bit of context for the deal. Facebook has grown to 39 million members, up nearly 63% from 24 million in late May, and is quickly gaining ground against larger rival — News Corp.’s (NYSE: NWS) MySpace — with 200 million members. Microsoft already has an exclusive agreement until 2011 to broker display advertisements for Facebook. Moreover, Microsoft and Facebook are discussing expanding that agreement beyond the United States.

What does Microsoft get from such an investment? First, it hopes that some of the Web 2.0 hype will rub off on its stock which trades 51% below its December 1999 all time high. Second, such a stake — which would value Facebook at roughly 66% of what Mark Zuckerberg, Facebook CEO thinks it’s worth — would give Microsoft a nice capital gain should Facebook realize that $15 billion value.

For Facebook, such an investment drives a negotiating stake in the ground which will spur feverish bidding from all the players who missed out on the chance to buy MySpace. Potential bidders would include Yahoo Inc. (NASDAQ: YHOO), Viacom Inc. (NYSE: VIA), and Google Inc. (NASDAQ: GOOG) to name a few players who would hate to let Microsoft get a leg up on them. Who knows, maybe Rupert Murdoch could come up with a creative way to swap some MySpace equity for a stake in Facebook.

And since Zuckerberg seems determined to keep Microsoft’s stake under 5%, such a deal would not require him to give up any control to Microsoft.

There’s really no way either Facebook or Microsoft is likely to lose from this deal. Let the bidding wars begin!

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.

Continue reading Why Microsoft’s (MSFT) talks with Facebook will draw Yahoo (YHOO), Viacom (VIA) and Google (GOOG) into the bidding

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Filed under: From the boards, Law, Consumer experience, Morgan Stanley (MS), Small business

Early in my career I worked for Dean Witter Reynolds, now Morgan Stanley (NYSE: MS) and had the opportunity to get to know Brian Biggins. Brian was a broker, an office branch manager and a compliance director in his 10 year stint with Dean Witter, until he went through a major career change. He put himself through law school at the tender age of 31 and became an advocate for the aggrieved individual investor.

Biggins opened his own law practice in Cleveland, Ohio, but has represented investors in nearly all 50 states. He works on behalf of investors who have been defrauded by unscrupulous brokers. He has handled, and won, hundreds of cases ranging from $10,000 to multi-million dollar losses. He has taken on almost every big Wall Street firm and insurance companies. Many of these firms know to sit down at the settlement table rather than going to arbitration against Mr. Biggins. What make him so successful in helping investors who have been ripped off, defrauded or just plainly mismanaged by their brokers?

Biggins was in the securities industries for over a decade. He knows exactly how big firms operate and where the bones are buried. He can interrogate a broker or the other firm’s counsel like no one else because Biggins was “one of them.” Firms know that they cannot throw a fast ball past him because of his vast knowledge and experience in the industry. A true advocate for the individual investor.

Continue reading An advocate for the individual investor

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Filed under: Law, Scandals, Personal finance

A study conducted by the Public Investors Arbitration Bar Association, an association of attorneys representing clients involved in disputes with the investment industry, shows that arbitration panels are expunging records of the misdeeds of brokers, often with little in the way of research or debate.

Complaints are only supposed to be removed if a court or panel determines that the allegations are false or don’t involve the broker named, but the PIABA believes that arbitration panels are rubber-stamping these requests to clear the record.

71% of expungement requests are granted without even holding a hearing. The President of the PIABA asked “How can you make an affirmative finding without holding a hearing?”

Good question! If the system of arbitration to resolve broker-client disputes is to continue, it need to be conducted in an above-board, unbiased manner. Granting expungements without holding hearings indicates that this isn’t happening… at all. If misdeeds cleared from the records with little oversight, these records become a meaningless resource for consumers looking to do due diligence before working with a broker.

In any case, your best bet, if you do choose to seek outside help with your investments, is to hire a fee-only financial adviser. Because these advisers serve only the client — and don’t stand to benefit from commissions for selling certain products — they are not subject to conflicts of interest the way that conventional brokers are.

For help locating a fee only adviser, ask your friends and family of check the National Association of Personal Financial Advisors.

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Filed under: Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)

Over the past couple weeks, there’s been lots of chatter that Facebook is seeking another round of capital. And, according to a recent report, the money might come from Microsoft (NASDAQ: MSFT).

Apparently, it looks like the software giant is angling to buy a 5% position in the super-popular social networking site. The amount would range from $300 million to $500 million, which could put a value of $10 billion on Facebook.

Of course, such things can be dicey. But, for Microsoft, the amount is chump change. Besides, Microsoft needs to show that it has some dot-com magic against rivals like MySpace, Yahoo (NASDAQ: YHOO) and Google (NASDAQ: GOOG).

In other words, an investment would be more than just making money - it would be an important strategic move. That is, Facebook may become a big adopter of Microsoft online technologies, such as its advertising platform.

Also, if Facebook is fetching such a nosebleed valuation, what could MySpace be worth? Maybe it’s time for Murdoch to think about strategic alternatives with the website, such as a public offering?

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

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Filed under: Products and services, Launches, Apple Inc (AAPL), Starbucks (SBUX), iPhone, Media World

Beginning next month Starbucks Corp. (NASDAQ: SBUX) is planning to distribute 50 million free digital songs from Apple Inc. (NASDAQ: AAPL)’s iTunes Store in promotion of the new iTunes wireless service that will be debuting in select markets, reported Billboard.biz this afternoon. Some may say that this is not a good sign, but it is certainly a logical one, at least in terms of Starbucks’ move into the music business full time this year.

The step had to be expected, given the huge success Starbucks has had with its initial forays into the music business. Consider the windfall the company enjoyed with Paul McCartney, who put out his latest album on Starbucks’ own Hear Music label. Hopes are high that the new Joni Mitchell album from Hear Music will enjoy similar success after it is released tomorrow.

Then the promotion begins in the wake of the recent Starbucks-Apple deal to allow “iPhone and new iPod Touch users the ability to download songs playing in a Starbucks shop directly to their portable devices.” Patrons will be able to download that hot tune directly onto their laptops.

Although the service might appear to be a ploy to bring in consumers and drive coffee sales, it should also be noted for what it is: promotion of new Apple products, its iTunes Store, and Starbucks’ own Hear Music. CD sales are never going to come back, and Starbucks, in all its coffee-fueled expansion, apparently can see the future of music. It’s all so synergistic. Credit Starbucks with doing it right.

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Filed under: Major movement, Earnings reports, Bad news, AMR Corp (AMR)

Thanks to a sour revenue outlook from AMR Corp. (NYSE: AMR), the AMEX Airline Index (XAL) is in the red, bringing up the rear among most sector indices despite a modest pullback in crude prices (which generally help lift airline stocks).

The group can hang the blame for today’s declines on the American-Airlines parent, which said late Friday that passenger revenue would rise 3.7% to 4.7% in the third quarter. This growth rate is notably lower than rival Continental Airlines (NYSE: CAL), which recently noted that unit revenue rose 6.5% to 7.5% in August. Other rivals, including UAL Corp. (NASDAQ: UAUA) have also projected better revenue numbers. AMR did note with its report that costs were rising, as the company has earmarked funds to improve customer service. And on the plus side (barely), fuel prices are likely to average $2.21 a gallon, the company said, compared to a July forecast of $2.24.

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Filed under: Analyst reports, Analyst upgrades and downgrades, Rumors, Motorola (MOT), Options, S and P 500

Accenture Ltd. (NYSE: ACN) is expected to report earnings per share (EPS) on September 27th.

The Bear Stearns Companies, Inc. (NYSE: BSC) has an outperform rating on ACN. Bear Stearns says “we expect management to reiterate their 9% to 12% constant currency revenue growth guidance for fiscal-year 2008.” BEST goes on say “ACN has long been a candidate for inclusion in the S&P 500, but has never been chosen. That said, when First Data-FDC goes private, there is a chance that ACN will be selected.” ACN October option implied volatility of 34 is above its 26-week average of 26 according to Track Data, suggesting larger price fluctuations.

Motorola, Inc. (NYSE: MOT) up 32 cents to $18.20.

Renewed and unconfirmed chatter is circulating that Motorola Chairman and CEO Edward Zander may step down. RBC Capital Markets says “We’re upgrading MOT to Outperform based on our view MOT is displaying firming trends in its once beleaguered handset division.” RBC Capital Markets has a $21 price target on MOT. MOT call option volume of 27,010 contracts compares to put volume of 8,124 contracts. MOT October option implied volatility of 30 was near its 26-week average of 29 according to Track Data, suggesting non-directional risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

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Filed under: Major movement, International markets, Forecasts, Rumors, Press releases, Insiders, Rants and raves, Berkshire Hathaway (BRK.A), Market matters, Top Picks 2007, PetroChina Co Ltd ADR (PTR), Bargain stocks, Politics, Serious Money, Oil, Stocks to Buy

In the case of an oil company, fire is not exactly something you look upon favorably. But when it’s the stock, you have to get excited. One of my stock picks for 2007 was PetroChina Co Ltd ADR (NYSE: PTR) and for the past two weeks it has been on fire.

Before I go further I must disclose we own PTR in three portfolios, buying in at $44, $55 and most recently at $120 this year. Today as I write this post it is over $180 per share so for a multitude of reasons it is making me look good.

I have been questioned numerous times about this stock holding given that “my pal Warren” — Berkshire Hathaway (NYSE: BRK.A) has been selling. According to the story he sold at an average price of $147 per share most recently. What few fail to mention is that he kept 90% of his shares. There are any number of reasons he took this action and those have not been shared.

In the meantime I have sold nothing. I did not buy it because Buffett bought it and I am not selling it just because he is reducing his shares. One pressure on Berkshire is that political ramifications of PetroChina doing business with the government of Somalia (and Darfur) has put questions into some shareholders’ minds about whether it was immoral to hold PTR given the documented human rights violations in the region.

But how many oil producing nations today can be looked upon favorably? Almost none in the Middle East, given the standing of women, non-Muslims, political opposition, freedom of speech and many more severe atrocities. How about our friends the Russians or the Chinese? Would anyone nominate them for a congeniality award or glowing examples of democracy? No way! So the world is complex and sometimes you can do more by working from the inside with a whisper, then you can screaming from the outside.

Continue reading Serious Money: Oil on fire — PetroChina (PTR)

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