Archive for November 3rd, 2007
Filed under: Insiders, Law, Live coverage, Countrywide Financial (CFC), Options
While the spotlight may be on Countrywide Financial Corp. (NYSE: CFC) CEO Angelo Mozilo for selling a large number of his shares over the past year, some of his directors did the same. The SEC has started an informal review of whether Mozilo’s sales were proper. The stock traded above $45 last last year and now sit below $15.
According to data collected by The Wall Street Journal, several directors made big sales. Jeffrey Cummingham, head of Directorship Magazine, has sold $2.4 million worth of shares. Robert Donato, who used to be with Paine Webber, has unloaded stock worth $2.1 million. Two other directors also made sales.
Countrywide directors are also better paid than those on most public company boards. The Journal reports that (subscription required) in 2006 “their total compensation ranged from $344,988 to $477,824 in 2006.”
All of this raises the question of how fair the Countrywide board can be in evaluating Mozilo’s actions as the head of the company, especially his contribution to the firm’s fast-falling share price. If the investigation into Mozilo’s own share sales turns nasty, he faces a board that has also made a great deal on the stock.
Like the rest of Countrywide, the board is a mess. With shareholders suits already beginning, Mozilo may not be the only person in trouble at the big mortgage lender.
Douglas A. McIntyre is an editor at 247wallst.com.
Read | Permalink | Email this | Comments
Share This
 No Comments »
Filed under: Microsoft (MSFT), Cisco Systems (CSCO), Hewlett-Packard (HPQ), Office Depot (ODP), Small business
 Being from L.A., I’ve had to deal with earthquakes and fire (no, it’s not always sunshine here). And, of course, I saw the devastation of the recent fires.
But what about some of the businesses that need to rebuild? Could they have prepared for the fires?
Well, I recently interviewed Jon Toigo, a disaster recovery expert at Toigo Partners International. Over the past 20 years, he has put together nearly 100 disaster recovery plans. His clients include Office Depot (NYSE: ODP), Microsoft (NASDAQ: MSFT), Cisco Systems (NASDAQ: CSCO), and Hewlett-Packard (NYSE: HPQ).
“The bottom line in disaster preparedness is to protect your most irreplaceable assets - your people and your data,” said Toigo.
Continue reading Entrepreneur’s Journal: Saving your business from disaster
Permalink | Email this | Comments
Share This
No Comments »
Filed under: Management, Competitive strategy, Bank of America (BAC)
 Bank of America Corp. (NYSE: BAC) completed its acquisition of the parent of Chicago’s LaSalle Bank in the beginning of October, a move that significantly increased Bank of America’s presence in Illinois, Indiana, and Michigan. LaSalle had 400 banking centers, 17,000 commercial customers, and 1.4 million retail customers.
Now, most of LaSalle Bank’s former senior leadership has defected to Chicago-based PrivateBancorp Inc. (NASDAQ: PVTB). Bank of America said that it would defend its customer base from PrivateBancorp or any lender that tries to poach customers from the biggest business lender in Chicago. They plan to start with visits to LaSalle customers: “We will be blanketing the market with calls starting today,” said a Bank of America spokesperson.
Experts have drawn distinctions between LaSalle’s commercial banking model and Bank of America’s retail model. LaSalle allowed front-line lenders to make more credit decisions and handle virtually all of the clients’ needs, but Bank of America says that credit decisions in most cases will still be made locally.
Meanwhile, former LaSalle Bank CEO, Larry Richman, will take over as CEO of PrivateBancorp on Monday. “Larry is a proven business and civic leader whose passion for clients and the Chicago area has been demonstrated in his past successes,” said Richman’s predecessor, PrivateBancorp’s cofounder, Ralph Mandell. In turn, Richman said, “There is an extraordinary opportunity for us to build and expand client relationships to become the premier middle market commercial and private bank not only in Chicago, but also in all of the markets we serve.”
Permalink | Email this | Comments
Share This
No Comments »
Filed under: SEC filings, Morgan Stanley (MS), Initial public offerings
 It was a nice Friday for Neutral Tandem Inc. (NASDAQ: TNDM). That is, the company’s IPO got a warm reception from Wall Street — surging 44.86% to $20.28.
You probably haven’t heard of this company. The reason is that Neutral Tandem provides underlying technologies to wireline, cable, and VOIP providers. Basically, it allows for a smooth exchange of traffic across networks (which, by the way, is no easy feat). As a result, customers realize cost savings, improved network reliability and better redundancy.
Neutral Tandem has 79 contracts and the network carries 3.4 billion minutes of traffic per month.
And the growth rate has been impressive. From 2005 to 2006, revenues spiked 88.9% to $52.9 million. Neutral Tandem even posted net income of $4.7 million.
The underwriters on the IPO were Morgan Stanley (NYSE: MS) and CIBC (NYSE: CM).
You can find the prospectus at the SEC website. Also, if you want to find information on other IPOs, then visit DealProfiles.com.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements .
Permalink | Email this | Comments
Share This
No Comments »
Filed under: Competitive strategy, Getting started, Comfort Zone Investing, Stocks to Buy, Housing
 Ted Allrich is the founder of The Online Investor and author of the just released book: Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he’ll offer advice to investors who are just getting started.
Financial stocks is a wide net to throw over many industries: credit cards, insurance, mutual funds, banks, savings and loans, stock brokers, mortgage bankers. They all do something a little different but are tied together by one element: money. They use yours to make a profit. There’s one other common trait at the moment: sub-prime mortgages. They’ve hit everyone of these industries, creating havoc and opportunity for investors.
It may be a good time to start buying a few of these downtrodden stocks. The reason: the sub-prime mortgage mess will be over at some point. However, no one knows that point. Merrill Lynch took a write down of more than $8 billion when two weeks before management said it would be closer to $5 billion. Other brokerage firms had similar problems. Banks and insurance companies around the world are getting out of mortgage investments because of their sub-prime losses. There will definitely be more fall out.
Continue reading Comfort Zone Investing: Time to buy financial stocks?
Permalink | Email this | Comments
Share This
No Comments »
Filed under: Earnings reports, Microsoft (MSFT), Dell (DELL), Intel (INTC), Sirius Satellite Radio (SIRI), Exxon Mobil (XOM), IAC/InterActiveCorp (IACI), Avon Products (AVP), Chevron Corp (CVX), CIGNA Corp (CI), Kellogg Co (K), Clorox Co (CLX), Colgate-Palmolive (CL), MasterCard Inc’A’ (MA), Procter and Gamble (PG), Trump Entertainment Resorts (TRMP), Verizon Communications (VZ), Alcatel-LucentADS (ALU), U.S. Steel (X), Under Armour’A’ (UA), Newmont Mining (NEM), RadioShack Corp (RSH), Burger King Hldgs (BKC), Teva Pharm Indus ADR (TEVA), Kraft Foods’A’ (KFT), Crocs Inc (CROX), Jones Apparel Group (JNY)
Lots more quarterly reports rolled out this past week, and here are some highlights of earnings coverage from BloggingStocks:
Continue reading Earnings highlights: Crocs, Exxon, Kraft, P&G, Sirius, and others
Permalink | Email this | Comments
Share This
No Comments »
Filed under: Management, Insiders, Law, Amer Intl Group (AIG)
Hank Greenberg is an old man now. His stated age is 82, but he must be closer to 90. He was the CEO of American International Group (NYSE: AIG) from 1967 until 2005. He was pushed out because of an accounting scandal and federal prosecutors are still looking into that.
But Greenberg does not want to take his hundreds of millions of dollars and retire. In a filing with the SEC yesterday he was pushing for “strategic changes” at the big insurance company and perhaps the spin-off of some businesses. Through various funds and foundations, Greenberg controls over 13% of AIG’s shares and the filing with the government states that he “believes that there are opportunities to significantly improve [AIG’s] performance and strategic direction, as well as the value of their investment.” The Wall Street Journal writes that (subscription required) Greenberg and the funds he controls “anticipate holding discussions with stockholders and third parties that may address a number of issues,” including whether to spin off some operations, and “concerns over the direction and management of [AIG] generally.”
In his desire to exert some control over his old company, Greenberg may get himself into more hot water. AIG has already filed a suit against him for damaging the company. Lashing out at AIG will clearly make the government look harder at its case against him. Prosecutors certainly don’t want more headlines about the fight between the man who made AIG and the company itself. The government would not want it to appear that they aren’t addressing problems at AIG in a timely fashion.
Greenberg does have at least one leg to stand on. AIG shares are down over 10% in the last two years while the S&P is up almost 30% If the old man can get the company’s board to take action by raising its dividend or buying back shares, it might drive the stock back up.
Greenberg. Old but not yet infirm.
Douglas A. McIntyre is an editor at 247wallst.com.
Read | Permalink | Email this | Comments
Share This
No Comments »
Filed under: Analyst upgrades and downgrades, Citigroup Inc. (C)
TimesOnline reports that Meredith Whitney, a CIBC analyst, has received death threats. Whitney who is married to the former World Wrestling Entertainment (NYSE: WWE) champion Death Mask, downgraded Citigroup Inc. (NYSE: C) on Thursday — citing its need to raise a $30 billion capital cushion. Her “underperform” rating of Citigroup helped send its shares down 7% — leading her to receive several death threats from Citigroup investors.
Whitney married the wrestler Death Mask, also known as John Charles Layfield, 2½ years ago after they met on a TV set. Layfield credits Whitney with helping to make him more sophisticated — he noted: “She took a country boy like me and kind of refined me. I know what fork to use now at the dinner table, and I drink my beer from a glass.” This has not stopped the brave Whitney from earning rave reviews as an analyst — Forbes ranked her second-best stock picker for 2007.
In a free society, people should be able to express their opinions without fear of bodily harm. For those Citigroup investors who don’t like what she wrote, you should be happy that her downgrade may have helped push Citigroup’s board to replace Chuck Prince. It remains to be seen whether Prince’s replacement can do a better job of boosting its share price.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns Citigroup stock and has no financial interest in WWE.
Permalink | Email this | Comments
Share This
No Comments »
Filed under: Deals, Ford Motor (F), General Motors (GM), Employees
The deal Ford (NYSE: F) cut with the UAW in the hours before dawn today looks very much like the ones the union has with General Motors (NYSE: GM) and Chrysler. But Ford needed it more. Its sales in the US have fallen twelve months in a row.
The new contract calls for the car company to pay for a health-care fund that will be run by the UAW. That could cost Ford $20 billion in a one-time payment. Ford will also be allowed to pay “non-core” workers less than most of the union rank-and-file. That will probably only matter to the non-core workers, but the deal will hurt them.
“Our bargaining committee came through for our active and retired members,” said UAW President Ron Gettelfinger, in a statement picked up by The Wall Street Journal. Gettelfinger, who may be retired by the next set of negotiations in four years, will have as his legacy these 2007 contracts.
How will be be remembered? His moves helped save the North American operations of the Big Three. The contracts pave the way for lower labor costs and lower benefit costs. If the US car companies can stabilize their market shares, they may be able to make money in North America again.
But if Detroit does return to a period of prosperity, Gettelfinger may be viewed at the man who gave too much and got too little. Many union jobs will be gone and the money will be rolling in again in the Motor City.
Douglas A. McIntyre is an editor at 247wallst.com.
Read | Permalink | Email this | Comments
Share This
No Comments »
Filed under: Citigroup Inc. (C), Merrill Lynch (MER)
The New York Times added a few new wrinkles to the story of this Sunday’s emergency board meeting at Citigroup Inc. (NYSE: C) at which CEO Chuck Prince will reportedly resign:
The recent moves at Merrill and Citigroup suggest that corporations host a unique form of CEO politics. In both cases, the CEOs were reportedly unpopular with many of the people who reported to them. In Prince’s case — the investment banking unit did not like him. And for O’Neal, Merrill’s brokerage unit was not a fan — among others. In both cases, off-balance sheet deals created the kind of negative surprises that make directors worry about spending huge amounts of money on legal fees to defend themselves against shareholder lawsuits.
Continue reading Chuck Prince gets $140 million to slice $36.4 billion from Citigroup’s market value
Permalink | Email this | Comments
Share This
No Comments »
|
