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Showing posts with label DealBook | DealBook -October 5. Show all posts
Showing posts with label DealBook | DealBook -October 5. Show all posts

Oct 5, 2012

DealBook | DealBook -October 5, 2012-: Today's Top Headlines: The I.P.O. Blues

Friday, October 5, 2012
The I.P.O. Blues The market was not kind to young companies trying to go public this week. The latest casualty came on Thursday, when Dave & Buster's Entertainment, the restaurant-and-arcade chain, withdrew plans for an I.P.O. The chief executive, Steve King, cited the usual reasons: "current market conditions are not optimal." (Mr. King may have more to say this morning on CNBC at 10:45 a.m.)

Months after giving Facebook a chilly reception, investors are still skittish about new listings. The Berry Plastics Group fell 5 percent in its debut on Thursday after pricing its stock at the low end of its expected range. The I.P.O. was a black eye for Berry's private equity owner, Apollo Global Management, which is set to test the market next week with another company, Realogy, in a potential $1 billion I.P.O.

It doesn't help investor confidence that those newly minted, once-hyped Internet stocks continue to struggle. Zynga, which went public in December, said on Thursday that it likely lost money in the third quarter. It also wrote off about half of the value of Omgpop, the games start-up it bought for $183 million in March. Even Facebook's shares didn't get much of a lift after the social network announced its users had reached 1 billion. The company also faces dozens of lawsuits related to its I.P.O.

At least one company may be forging ahead with an I.P.O. Huawei Technologies, a Chinese telecommunications company, has been in touch with investment banks for advice on a potential debut, according to The Wall Street Journal.
MetroPCS in Play T-Mobile's bid for MetroPCS could spark some rival offers, the Deal Professor writes. "This is an open invitation for another bidder to come in and pay a higher amount, something the MetroPCS board must accept if it is a clearly superior offer." All eyes are on Sprint Nextel, which on Thursday was "in the early stages of evaluating a bid for MetroPCS," Bloomberg News reported. Sprint, which tried and failed to merge with MetroPCS earlier this year, is holding a board meeting by phone today, according to The Wall Street Journal. Sprint's stock fell more than 2 percent on Thursday.
Shareholders Push Back on Pay "The days when Wall Street banks could blithely hand out half their revenue in compensation to their staff without a murmur from shareholders have come to an end," Reuters says. At Morgan Stanley, "furious" institutional shareholders took executives to task last year, questioning why compensation could not be lowered to about 30 percent of revenue from 51 percent, according to Reuters. Morgan Stanley's chief executive, James Gorman, seems to agree with shareholders' concerns. "There's way too much capacity and compensation is way too high," Mr. Gorman said in an interview with The Financial Times. "As a shareholder I'm sort of sympathetic to the shareholder view that the industry is still overpaid."
On the Agenda It's jobs day. Economists surveyed by Reuters are predicting that 113,000 jobs were added in September, with the unemployment rate increasing to 8.2 percent from 8.1 percent.

The changing face of the workplace is only complicating the jobs situation. Catherine Rampell of The New York Times profiles Leap2, a start-up with 10,000 users but just one employee. Relying on contractors and part-time work has helped Leap2, but "the implications for the American work force are worrisome," Ms. Rampell writes. A wonkier dive into the numbers is here.

Elizabeth Duke, a Federal Reserve governor, is speaking about distressed real estate at the New York Fed at 1 p.m. Today marks one year since the death of Steve Jobs.
European Buyout Firms Get Creative With banks hesitant to take risks, private equity firms in Europe have had to look elsewhere for financing, writes DealBook's Mark Scott. Some are using high-yield bonds or mezzanine loans. It's been a boon to the high-yield bond market. But the broader popularity of high-yield debt is making money managers nervous. Some large investors, concerned about the risky borrowers, have recently begun to sell their holdings, according to The Wall Street Journal.
Julian Robertson's 80th Julian Robertson, the founder of Tiger Management, celebrated his 80th birthday in style over the weekend, with Mayor Michael R. Bloomberg, the author Tom Wolfe and many of Mr. Robertson's protégés attending a lavish party, according to Absolute Return. The evening was said to feature a video tribute from Mitt Romney, thanking Mr. Robertson for supporting his presidential campaign.
Contact: @williamalden | E-mail
Germany a Sticking Point in Aerospace Merger Talks Reuters reports: "EADS and BAE Systems have edged closer towards winning political backing for a $45 billion merger to create the world's biggest arms group amid positive signals from Britain and France, but German misgivings over control is a big obstacle, sources close to the talks said."
Canadian Politicians Oppose Cnooc-Nexen Deal The New Democratic Party called on the Conservatives, which control the legislature, to reject the deal, saying it wouldn't necessary benefit Canada.
Unilever Weighs a Sale of Skippy The British-Dutch consumer products giant said on Thursday that it was considering selling its Skippy peanut butter brand in the United States and Canada as it focused more on emerging markets.
Moody's Puts H.P. on Review After its chief executive gave a bleak assessment of its future, Hewlett-Packard may have its credit rating docked by Moody's.
Why Aren't H.P.'s Shareholders Up in Arms? Roben Farzad of Bloomberg Businessweek writes: "Increased shareholder vigilance can only do so much to combat the bad business trends that are hitting H.P. all at once."
G.E.'s Thai Bank Stake Said to Draw Interest The Oversea-Chinese Banking Corporation and CIMB Group Holdings have signed non-disclosure agreements as they consider bidding for General Electric's stake in Bank of Ayudhya, Bloomberg News reports, citing three unidentified people with knowledge of the matter.
JPMorgan Chase Shuffles Top Ranks Barry Zubrow, JPMorgan's regulatory affairs chief, is expected to leave his post before the end of the year, The Wall Street Journal reports, citing unidentified people close to the bank.
Barclays Names McGee Top Americas Corporate and Investment Banker Barclays named Hugh E. McGee III, one of the firm's top deal makers, as its most senior corporate and investment banker in the Americas on Thursday as part of a broader reorganization within the bank.
Macquarie's Head of Asian Investment Banking Said to Be Leaving Kalpana Desai, who runs investment banking in Asia for the Australian firm, is retiring by April, Bloomberg News reports, citing an internal memo.
Citigroup Tries to Connect With Customers Over Twitter The bank has been using Twitter to speed up the time it takes to respond to complaints.
Goldman Sachs May Open a Representative Office in Chile
    Apollo Said to Propose a Television Tie-Up Apollo Global Management is pushing for a merger of the Core Media Group, which it owns, with the Dutch production company Endemol, The Wall Street Journal reports, citing unidentified people familiar with the situation.
    Chinese Private Equity Firm Bids for Discovery Metals The Cathay Fortune Corporation made a cash offer valuing Discovery Metals, an Australian mining company, at $848 million.
    Carlyle Sells Stake in HDFC of India The Carlyle Group raised $838 million through a sale of its remaining stake in India's Housing Development Finance Corporation, according to Dow Jones.
    The Risks of Hedge Fund Advertising A MarketWatch columnist compares a pending rule change to "a law that required bicyclists to wear helmets but allowed motorcycle riders to zip around with the wind blowing in their hair."
    Hedge Funds Said to Consider Bidding for Nine Entertainment Oaktree Capital and Apollo Global Management, the lenders to the struggling Australian company, are said to be weighing a bid if it goes on the block, The Australian Financial Review reported, according to MarketWatch.
    Running a Hedge Fund From Prison Jonathan Weil of Bloomberg View imagines some hypothetical scenarios for hedge funders who are convicted of insider trading.
    Sheryl Sandberg's Book Coming in March Facebook's chief operating officer told the Media Decoder blog that her book, "Lean In: Women, Work, and the Will to Lead," grew out of a TED talk she gave two years ago.
    Keeping the Lines of Communication Open Investment firms and their principals are not A.T.M.'s; they should be treated as advocates and resources, writes Patrick Hull, a serial entrepreneur and angel investor. They are members of a start-up company's team and should be kept informed of developments, he writes.
    The Importance of Women at New Companies "Venture-backed companies that include females as senior executives are more likely to succeed than companies where only males are in charge, according to new research from Dow Jones," The Wall Street Journal writes.
    Jeff Bezos Invests in Quantum Computing Start-Up Amazon's chief executive, along with the venture capital arm of the C.I.A., announced a $30 million investment in D-Wave Systems, GeekWire reports.
    R.B.S. Said to Suspend Trader Over Rate-Rigging in Singapore Bloomberg News reports that the Royal Bank of Scotland "suspended a trader for trying to rig the Singapore dollar swap offer rate, indicating employees may have sought to manipulate more than just Libor, two people briefed on the matter said."
    When Securities Fraud Happens Elsewhere Floyd Norris writes in his column in The New York Times that "one of the more colorful securities law violators" could soon "be back on the scene." A conviction of securities fraud may be overturned because he did his business overseas.
    New York Attorney General Said to Examine a Dozen Firms Bloomberg News reports: "New York Attorney General Eric Schneiderman is looking into the mortgage securities practices of at least a dozen financial institutions that have agreed to suspend a deadline for him to bring fraud claims, according to a person familiar with the matter."
    Former Regulators Push for Stricter Rules on Leverage A group of former senior regulators led by Sheila Bair wrote a letter recommending that bank regulators consider further restrictions on banks' ability to finance their operations with debt, The Financial Times reports.
    Fed Members Nearly United in Support of Bond-Buying Plan "All members but one agreed that the outlook for economic activity and inflation called for additional monetary accommodation," read the minutes of the Federal Reserve's September meeting.
    Optimism From Europe's Central Banker Mario Draghi gave a cautiously upbeat assessment of troubled euro zone countries during a news conference on Thursday, The New York Times writes.
    Credit Union Regulator Sues Credit Suisse A United States regulator accused Credit Suisse of misrepresenting mortgage-backed securities to three failed credit unions that paid more than $715 million for the investments, Reuters reports.

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