Monday, June 2, 2008
Major Music Distributor Handleman Exits Music Business
Major music distributor Handleman Corp. announced Monday (June 2) that it is exiting the music business. The Wal-Mart chain has been Handleman's biggest CD customer. Handleman president/CEO Albert A. Koch said, "CD music sales have been declining at double-digit rates for several years, both industry wide and at our customers' stores, resulting in a sharp drop-off in our business. Unfortunately, even the significant steps we've taken over the past two years to reduce our costs have not enabled the company to return to profitability." The Troy, Mich.-based company will lay off 260 workers. Its inventory and other assets will be sold to Anderson, based in Amarillo, Tex. Handleman said it will continue to operate its other units, including video game maker Crave Entertainment.
Analysts see JPMorgan Chase as suitor for Wachovia
by Katy Finger
(The Business Journal of Milwaukee)Wall Street analysts say the ouster of Ken Thompson as Wachovia Corp. chief executive could lead to a sale of the bank, with JPMorgan Chase & Co., which has a large Milwaukee-area presence, identified as the most likely buyer.
Even without such a sale, Charlotte, N.C.-based Wachovia (NYSE: WB), which has no Wisconsin bank branches, is facing a period of significant change that some analysts view as a chance to improve the bank's earnings but others expect will mean more weakness and uncertainty.
"Under Ken Thompson's leadership, he took a defeated First Union franchise and transformed it into one of the premier retail banks in the country and significantly improved profitability," wrote Citigroup Global Markets Inc. analyst Keith Horowitz in a research note Monday. "Unfortunately, his legacy will more likely be defined by the ill-timed Golden West acquisition, which left Wachovia very exposed to the mortgage crisis."
Wachovia has been hit by a string of bad news in recent months, but the company's financial woes have revolved largely around its massive exposure to the declining mortgage market, a byproduct of its 2006 acquisition of Golden West Financial Corp., a California thrift that specialized in nontraditional, option-adjustable-rate mortgage loans. The deal put Wachovia in California and other Western states, but the bank bought the thrift at the peak of the mortgage market and has become swamped with defaulting mortgage loans.
Thompson has since conceded the acquisition was poorly timed.
The bank also recently cut its dividend to 37.5 cents per share from 64 cents per share while raising $8 billion in new common and preferred stock, which diluted the value of existing shareholders' stock.
Several analysts think a sale to New York City-based JPMorgan (NYSE: JPM) may be likely. JPMorgan Chase entered the Milwaukee market with its 2004 purchase of Bank One of Chicago. Chase is now the third-largest bank in the Milwaukee area based on local deposits.
"JPMorgan would be regarded as the most likely buyer," wrote Edward Najarian, research analyst at Merrill Lynch & Co. Inc., in a research note Monday. He points out that JPMorgan's CEO, James Dimon, has said he would like to expand JPMorgan's branch network in the Southeast. "He would also likely find Wachovia's over 14,000 retail brokers an attractive asset," he wrote.
Deutsche Bank analysts also say Wachovia offers what JPMorgan wants. "JPMorgan has indicated at times that it would be interested in franchises that include a combination of California, Texas, Florida and brokerage," analysts Mike Mayo and Chris Spahr wrote Monday, "and Wachovia contains all of these."
However, after JPMorgan, "potential buyers dwindle materially," Merrill Lynch's Najarian wrote. Charlotte, N.C.-based Bank of America Corp. (NYSE: BAC) is an unlikely suitor because of antitrust issues, he wrote. And Citigroup Inc. (NYSE:C) doesn't have the capital, he wrote.
(The Business Journal of Milwaukee)Wall Street analysts say the ouster of Ken Thompson as Wachovia Corp. chief executive could lead to a sale of the bank, with JPMorgan Chase & Co., which has a large Milwaukee-area presence, identified as the most likely buyer.
Even without such a sale, Charlotte, N.C.-based Wachovia (NYSE: WB), which has no Wisconsin bank branches, is facing a period of significant change that some analysts view as a chance to improve the bank's earnings but others expect will mean more weakness and uncertainty.
"Under Ken Thompson's leadership, he took a defeated First Union franchise and transformed it into one of the premier retail banks in the country and significantly improved profitability," wrote Citigroup Global Markets Inc. analyst Keith Horowitz in a research note Monday. "Unfortunately, his legacy will more likely be defined by the ill-timed Golden West acquisition, which left Wachovia very exposed to the mortgage crisis."
Wachovia has been hit by a string of bad news in recent months, but the company's financial woes have revolved largely around its massive exposure to the declining mortgage market, a byproduct of its 2006 acquisition of Golden West Financial Corp., a California thrift that specialized in nontraditional, option-adjustable-rate mortgage loans. The deal put Wachovia in California and other Western states, but the bank bought the thrift at the peak of the mortgage market and has become swamped with defaulting mortgage loans.
Thompson has since conceded the acquisition was poorly timed.
The bank also recently cut its dividend to 37.5 cents per share from 64 cents per share while raising $8 billion in new common and preferred stock, which diluted the value of existing shareholders' stock.
Several analysts think a sale to New York City-based JPMorgan (NYSE: JPM) may be likely. JPMorgan Chase entered the Milwaukee market with its 2004 purchase of Bank One of Chicago. Chase is now the third-largest bank in the Milwaukee area based on local deposits.
"JPMorgan would be regarded as the most likely buyer," wrote Edward Najarian, research analyst at Merrill Lynch & Co. Inc., in a research note Monday. He points out that JPMorgan's CEO, James Dimon, has said he would like to expand JPMorgan's branch network in the Southeast. "He would also likely find Wachovia's over 14,000 retail brokers an attractive asset," he wrote.
Deutsche Bank analysts also say Wachovia offers what JPMorgan wants. "JPMorgan has indicated at times that it would be interested in franchises that include a combination of California, Texas, Florida and brokerage," analysts Mike Mayo and Chris Spahr wrote Monday, "and Wachovia contains all of these."
However, after JPMorgan, "potential buyers dwindle materially," Merrill Lynch's Najarian wrote. Charlotte, N.C.-based Bank of America Corp. (NYSE: BAC) is an unlikely suitor because of antitrust issues, he wrote. And Citigroup Inc. (NYSE:C) doesn't have the capital, he wrote.
Wednesday, May 28, 2008
3-US files WTO case vs EU over technology tariffs
WASHINGTON, May 28 (Reuters) - The United States said on Wednesday it was taking action at the World Trade Organization aimed at overturning tariffs the European Union imposes on computer screens, multifunction printers and TV set-top boxes capable of accessing the Internet. U.S. technology heavyweights such as Hewlett Packard Co have argued that EU tariffs on the products violate the spirit and the letter of the WTO's 1997 Information Technology Agreement (ITA), which axed tariffs on a range of high-tech goods to boost trade. "The EU should be working with the United States to promote new technologies, not finding protectionist gimmicks to apply new duties to these products," said U.S. Trade Representative Susan Schwab.
"We urge the EU to eliminate permanently the new duties and to cease manipulating tariffs to discourage technological innovation," Schwab said at a news conference to announce the United States had requested formal dispute settlement talks with the European Union on the issue. Japan is joining the dispute on the side of the United States, Schwab said. As the three products have evolved, EU customs officials have decided they are no longer covered by the pact and hit them with tariffs of up to 14 percent. Global exports of the three products are estimated to be worth more than $70 billion, Schwab's office said. The European Commission said it "strongly rejected" the arguments of the United States and accused Washington of refusing to heed its calls for negotiated changes in the products covered by the ITA deal.
"The ITA has a review clause which can be invoked by members at any time. The EU has said it is willing to negotiate with all other ITA members. The U.S. is not willing to do this. Why not?" the Commission said in a statement. Schwab told reporters the EU position would render the Information Technology Agreement meaningless over time because it would cover fewer and fewer products.
"If ITA participants only provided duty-free treatment to products with the technology that existed at the time the ITA was concluded, very few ITA products would be eligible for duty-free treatment today," she said. "That is not what ITA participants intended when this landmark sectoral agreement was reached more than 10 years ago," Schwab said, adding the United States did not want to "pay twice" for trade concessions it believes the EU is already obligated to honor. Most of the products at issue are manufactured in countries such as China and Malaysia but are based on U.S. design and engineering and sold under U.S. brand names.
"We urge the EU to eliminate permanently the new duties and to cease manipulating tariffs to discourage technological innovation," Schwab said at a news conference to announce the United States had requested formal dispute settlement talks with the European Union on the issue. Japan is joining the dispute on the side of the United States, Schwab said. As the three products have evolved, EU customs officials have decided they are no longer covered by the pact and hit them with tariffs of up to 14 percent. Global exports of the three products are estimated to be worth more than $70 billion, Schwab's office said. The European Commission said it "strongly rejected" the arguments of the United States and accused Washington of refusing to heed its calls for negotiated changes in the products covered by the ITA deal.
"The ITA has a review clause which can be invoked by members at any time. The EU has said it is willing to negotiate with all other ITA members. The U.S. is not willing to do this. Why not?" the Commission said in a statement. Schwab told reporters the EU position would render the Information Technology Agreement meaningless over time because it would cover fewer and fewer products.
"If ITA participants only provided duty-free treatment to products with the technology that existed at the time the ITA was concluded, very few ITA products would be eligible for duty-free treatment today," she said. "That is not what ITA participants intended when this landmark sectoral agreement was reached more than 10 years ago," Schwab said, adding the United States did not want to "pay twice" for trade concessions it believes the EU is already obligated to honor. Most of the products at issue are manufactured in countries such as China and Malaysia but are based on U.S. design and engineering and sold under U.S. brand names.
Tuesday, May 27, 2008
Laveranues Picks
I thought I would start shedding light on a few securities that I find promising. I'll try to do this about once a week. One stock that's on my radar is Chicago Bridge & Iron Co (CBI). Chicago Bridge is a dutch company who is a supplier and construction engineering company for oil and gas. This should be a great way to cash in on rising oil prices. I've set my price target at $60.
Thursday, May 22, 2008
Ford: Fewer trucks, more losses
By Chris Isidore, CNNMoney.com senior writer
NEW YORK (CNNMoney.com) - Ford Motor Co. cited record-high gas prices in announcing Thursday that it will cut production of pickups and SUVs and likely miss its long-held goal of returning its core North American auto unit to profitability next year. The company said it now hopes to break even companywide next year as overseas profits balance out losses at home. It also announced it would slash production of pickups and SUVs due to changing consumer demand.
"We saw a real change in the industry demand in pickups and SUV in the first two weeks of May," said Ford Chief Executive Alan Mulally. "It seems to us we reached a tipping point." Ford now believes that the change in vehicle choice is structural, not cyclical, Mulally said. Mulally said the company in July will detail longer-term changes, including personnel reductions. Ford had already offered buyouts and early retirement to all of its U.S. hourly employees. Ford (F, Fortune 500) said it will ramp up production of some other models such as cars and so called crossovers, a vehicle designed to bring a more car-like ride to SUVs. But the cuts in its pickup and SUV output will be greater than its increased car production. Ford trimmed an additional 20,000 vehicles, or 3%, from its North American plans, for the second quarter, putting its target at 690,000 vehicles. That will leave output down 15% from year-ago levels. The company said it now plans to produce between 510,000 and 540,000 units in the third quarter, down 15-20% from the same period last year, while the fourth-quarter production target is now between 590,000 and 630,000 units, down 2-8% from year-earlier levels. The shift is bad news for the nation's No. 3 automaker, which has lost money on its North American auto operations since 2005. The smaller cars for which it will ramp up production - Ford Focus, Fusion, Edge and Escape, the Mercury Milan and Mariner, as well as the Lincoln MKZ and Lincoln MKX - generally have lower prices and profit margins than the light truck models for which it is cutting production, such as the F-Series pickup, still the nation's best selling vehicle.
Also since the car models cannot be built on the same assembly lines where the pickups and SUV are built, the decreased production will mean more idled plants. Ford will have to pay employees who are not working while it increases the hours for those at car plants. Ford said it plans further manufacturing capacity realignments and additional cost reductions as part of its turnaround plan. Also Thursday Ford said it was not taking a position on a previously-announced proposal by investor Kirk Kerkorian to buy an increased stake in Ford.
NEW YORK (CNNMoney.com) - Ford Motor Co. cited record-high gas prices in announcing Thursday that it will cut production of pickups and SUVs and likely miss its long-held goal of returning its core North American auto unit to profitability next year. The company said it now hopes to break even companywide next year as overseas profits balance out losses at home. It also announced it would slash production of pickups and SUVs due to changing consumer demand."We saw a real change in the industry demand in pickups and SUV in the first two weeks of May," said Ford Chief Executive Alan Mulally. "It seems to us we reached a tipping point." Ford now believes that the change in vehicle choice is structural, not cyclical, Mulally said. Mulally said the company in July will detail longer-term changes, including personnel reductions. Ford had already offered buyouts and early retirement to all of its U.S. hourly employees. Ford (F, Fortune 500) said it will ramp up production of some other models such as cars and so called crossovers, a vehicle designed to bring a more car-like ride to SUVs. But the cuts in its pickup and SUV output will be greater than its increased car production. Ford trimmed an additional 20,000 vehicles, or 3%, from its North American plans, for the second quarter, putting its target at 690,000 vehicles. That will leave output down 15% from year-ago levels. The company said it now plans to produce between 510,000 and 540,000 units in the third quarter, down 15-20% from the same period last year, while the fourth-quarter production target is now between 590,000 and 630,000 units, down 2-8% from year-earlier levels. The shift is bad news for the nation's No. 3 automaker, which has lost money on its North American auto operations since 2005. The smaller cars for which it will ramp up production - Ford Focus, Fusion, Edge and Escape, the Mercury Milan and Mariner, as well as the Lincoln MKZ and Lincoln MKX - generally have lower prices and profit margins than the light truck models for which it is cutting production, such as the F-Series pickup, still the nation's best selling vehicle.
Also since the car models cannot be built on the same assembly lines where the pickups and SUV are built, the decreased production will mean more idled plants. Ford will have to pay employees who are not working while it increases the hours for those at car plants. Ford said it plans further manufacturing capacity realignments and additional cost reductions as part of its turnaround plan. Also Thursday Ford said it was not taking a position on a previously-announced proposal by investor Kirk Kerkorian to buy an increased stake in Ford.
Wednesday, May 21, 2008
Microsoft Creates Unified Ad Brand, Expands Mobile Offerings
ClickZ News) Microsoft SVP Brian McAndrews yesterday unveiled new mobile ad sales initiatives along with a new brand to house all the company's offerings to marketers: Microsoft Advertising.
The company is also planning to roll out a program to offer searchers cash back on the purchase of products discovered through its search interface. The move is partly an attempt to capture search share from Google, a more urgent goal in the wake of Microsoft's aborted bid to acquire Yahoo.
Speaking at the company's Advance08 advertising summit on its Redmond campus, McAndrews said the new brand will offer a "one stop shopping" experience for advertisers. The move is a baby step toward integrating the company's many free-floating ad units, including aQuantive's Avenue A/Razorfish, Atlas, and DrivePM brands; the AdECN exchange; and its own Search, MSN Network and MSN Ad Direct Response units.
To an extent, the brand consolidation is superficial. Internally those brands will continue to reside separately within the Advertiser and Publisher Solutions group, while Microsoft will use the Microsoft Advertising brand in its external business. "It's designed to let customers know that we're committed to making sense out of a complex environment, and that we have everything they need, all under one roof," McAndrews said in a statement.
McAndrews also touched on enhancements to the company's new Windows Live for Mobile environment, including the availability of display advertising on Windows Live Hotmail and Messenger for mobile in four markets: the U.S., U.K., France, and Spain. Microsoft claims 25 million people in the U.S. access Windows Live Hotmail and Windows Live Messenger on their mobile phones.
Microsoft also announced plans to offer mobile search advertisements on Live Search Mobile, currently in beta in the U.S. but scheduled for wider release in the second half of 2008. Advertisers will be able to create keyword campaigns through adCenter targeting users of Live Search Mobile.
More information is available at the Microsoft Advertising Web site.
In his presentation to some 400 advertisers, marketers, and industry professionals, McAndrews also discussed the signing of nearly 100 new publishers to the Microsoft platform, and key recent acquisitions such as those of Rapt, AdECN, and YaData, and the launch of Engagement Mapping, now in beta. Microsoft touts Engagement Mapping as a superior way to measure and optimize digital media spending, allowing advertisers to assign a share of conversions to non-search "touch points" and to assign them weight according to frequency, recency, ad size, and day part. McAndrews claimed the average user sees an average of 17 ads before clicking on one, but only the last one typically gets credit.
Advance08 will continue through tomorrow, with Live Search announcements due from SVP Satya Nadella, and an appearance by Bill Gates.
The company is also planning to roll out a program to offer searchers cash back on the purchase of products discovered through its search interface. The move is partly an attempt to capture search share from Google, a more urgent goal in the wake of Microsoft's aborted bid to acquire Yahoo.
Speaking at the company's Advance08 advertising summit on its Redmond campus, McAndrews said the new brand will offer a "one stop shopping" experience for advertisers. The move is a baby step toward integrating the company's many free-floating ad units, including aQuantive's Avenue A/Razorfish, Atlas, and DrivePM brands; the AdECN exchange; and its own Search, MSN Network and MSN Ad Direct Response units.
To an extent, the brand consolidation is superficial. Internally those brands will continue to reside separately within the Advertiser and Publisher Solutions group, while Microsoft will use the Microsoft Advertising brand in its external business. "It's designed to let customers know that we're committed to making sense out of a complex environment, and that we have everything they need, all under one roof," McAndrews said in a statement.
McAndrews also touched on enhancements to the company's new Windows Live for Mobile environment, including the availability of display advertising on Windows Live Hotmail and Messenger for mobile in four markets: the U.S., U.K., France, and Spain. Microsoft claims 25 million people in the U.S. access Windows Live Hotmail and Windows Live Messenger on their mobile phones.
Microsoft also announced plans to offer mobile search advertisements on Live Search Mobile, currently in beta in the U.S. but scheduled for wider release in the second half of 2008. Advertisers will be able to create keyword campaigns through adCenter targeting users of Live Search Mobile.
More information is available at the Microsoft Advertising Web site.
In his presentation to some 400 advertisers, marketers, and industry professionals, McAndrews also discussed the signing of nearly 100 new publishers to the Microsoft platform, and key recent acquisitions such as those of Rapt, AdECN, and YaData, and the launch of Engagement Mapping, now in beta. Microsoft touts Engagement Mapping as a superior way to measure and optimize digital media spending, allowing advertisers to assign a share of conversions to non-search "touch points" and to assign them weight according to frequency, recency, ad size, and day part. McAndrews claimed the average user sees an average of 17 ads before clicking on one, but only the last one typically gets credit.
Advance08 will continue through tomorrow, with Live Search announcements due from SVP Satya Nadella, and an appearance by Bill Gates.
Tuesday, May 20, 2008
Wall Street Brokerages Look To Shed Light on Dark Pools (Wall Street Journal)
By DONNA KARDOS
Goldman Sachs Group Inc., Morgan Stanley and UBS AG announced a series of deals that will allow their clients to share access to all three firms' pools of non-displayed liquidity as they try to address the growing complexity of market fragmentation amid so-called dark pools. The moves come as dark pools -- the secretive electronic trading networks that match buyers and sellers anonymously -- are booming in popularity as big institutional investors look for ways to trade blocks of stock without triggering ripples in the share price, as can happen on traditional stock markets such as the NYSE and Nasdaq Stock Market. But all that darkness is causing nightmares on Wall Street because there are now so many that using them is increasingly frustrating and time-consuming. The deals announced Tuesday allow algorithmic-trading orders of each firm to interact with the U.S. equity liquidity found in three of the nation's largest broker-dealer-operated dark pools -- Goldman Sachs' SIGMA X, Morgan Stanley's MS POOL and UBS' PIN ATS. Forty-two such U.S. trading networks now are competing for orders, up from seven dark pools five years ago, according to Tabb Group, a Westborough, Mass., research firm. Large brokerage firms, trading boutiques and even stock exchanges have designed systems that allow shares to be bought and sold out of the sight of prying eyes. "We're confident that providing our respective clients access to each other's liquidity will achieve even better crossing results for our clients in an increasingly fragmented market," said Greg Tusar, managing director of electronic trading for Goldman.
Goldman Sachs Group Inc., Morgan Stanley and UBS AG announced a series of deals that will allow their clients to share access to all three firms' pools of non-displayed liquidity as they try to address the growing complexity of market fragmentation amid so-called dark pools. The moves come as dark pools -- the secretive electronic trading networks that match buyers and sellers anonymously -- are booming in popularity as big institutional investors look for ways to trade blocks of stock without triggering ripples in the share price, as can happen on traditional stock markets such as the NYSE and Nasdaq Stock Market. But all that darkness is causing nightmares on Wall Street because there are now so many that using them is increasingly frustrating and time-consuming. The deals announced Tuesday allow algorithmic-trading orders of each firm to interact with the U.S. equity liquidity found in three of the nation's largest broker-dealer-operated dark pools -- Goldman Sachs' SIGMA X, Morgan Stanley's MS POOL and UBS' PIN ATS. Forty-two such U.S. trading networks now are competing for orders, up from seven dark pools five years ago, according to Tabb Group, a Westborough, Mass., research firm. Large brokerage firms, trading boutiques and even stock exchanges have designed systems that allow shares to be bought and sold out of the sight of prying eyes. "We're confident that providing our respective clients access to each other's liquidity will achieve even better crossing results for our clients in an increasingly fragmented market," said Greg Tusar, managing director of electronic trading for Goldman.
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