The Latest

  • 23 Apr 2014 at 5:48 PM

Layoffs Watch ’14: Barclays

It’s possible the Brits will be getting rid of a quarter of their investment banking employees and if you ask Sanford Bernstein, those at the top should go first. Read more »

Bill Ackman is pretty good at waiting. He waited more than a year for JC Penney to see the light and hire the guy he wanted as CEO, and then another year-and-a-half for that guy to fail spectacularly and saddle him with a half-billion dollar loss. Speaking of half-billion dollar losses, he waited for more than a year for a power that is to start looking into his allegation that there’s something amiss at diet-shake distributor and distributor-recruiter Herbalife, and now he’s patiently waiting for one of them to shut it down.

So he’s happy to wait for a couple of months while the people who make Botox consider their options while protected by a poison pill. Just as long as the option they come down on is selling their company for $46 billion to his chosen buyer, or to someone else for a bunch more. Read more »

Ackman, who has teamed up with Canadian pharmaceutical company Valeant to launch a $45.6 billion takeover of Botox maker Allergan, warned drugmakers Tuesday that he plans to go on a little buying spree. “This is not the last deal we’re going to do,” he said. “We’re already talking about the next deal we’re going to do with Valeant.” “There are $10 trillion worth of targets,” said Ackman, referring to the combined market cap of the pharmaceutical industry. “I call this the shopping list.” [NYP]


Last night, in an interview with CNBC, Carl Icahn had this to say about fellow hedge fund manager Bill Ackman and his recent bid with drugmaker Valiant Pharmaceuticals for Botox maker Allergan:

“We have our differences, but I never said he’s not a smart guy. I think the concept of this is good. I hope it works out better for him than Herbalife did, and I think it will…There’s nothing wrong with making a bid for a company and using someone else’s funds.”

Those of you who’ve kept up with Icahn and Ackman’s relationship know that Icahn saying he never said Ackman’s “not a smart guy” represents a complete 180 from his comments about the Pershing Square manager in the past. Those include but are not limited to:

  • To the New York Times: “How many times have judges been wrong? How many people have gone to the death chamber because they’re wrong? Ackman is dead wrong.”
  • On BloombergTV: “…it’s no secret I don’t like Ackman”
  • Also on BloombergTV: “I have no respect for him and I don’t like him and that’s not a secret.”
  • In the same interview on BloombergTV: “I dislike the guy, I don’t respect him, I’ve done business with him and he wasn’t forthright…that’s my opinion.”
  • Via press release: “To get the record straight, I never asked Ackman to be my friend.”
  • In the same press release: “Bill Ackman has recently stated ‘Carl Icahn is a great investor.’ I thank him but unfortunately I cannot return the compliment.”
  • On CNBC: “I was minding my own business in 2003 and I get a call from this Ackman guy and he’s like the crybaby in the school yard. I went to a tough school in Queens and they used to beat up the little Jewish boys and he was like these little Jewish boys crying saying the world was taking advantage of him. He was almost sobbing. And he’s in my office talking about this Hallwood deal and how I can help him. It’s like in the old song, I rue the day I ever met the guy.”
  • In the same interview on CNBC: “He’s the quintessential example of if you want a friend, get a dog.”
  • CNBC: “I wouldn’t invest with [Ackman] if [he] were the last man on earth.”

So to hear Icahn not only describe Ackman as not not smart but to compliment his “concept” was more than a little bit surprising. But why the about face? It’s possible it had something to do what happens at 2:58 here: Read more »

Or so he says. Read more »

  • 23 Apr 2014 at 1:46 PM

The Bitcoin Bugle: Mark Karpelès Had a Dream

And it wasn’t to transform a role-playing card exchange into the vanguard of a financial future without fiat currencies or central banks. That was incidental.

Or, rather, it was a means to an end, the end being a much more prosaic, conventional business: a coffee house that would help one lonely French fat kid in Tokyo make friends. Read more »

  • 23 Apr 2014 at 1:40 PM

Ben Bernanke Has Regrets

As nice it was to spend eight years saving the economy and testing the proposition that there are no stupid questions during sessions with various congressional committees, gentle Ben would just as soon trade them for the quiet times at Fisher Hall. Read more »

Opening Bell: 04.23.14

Judges Consider What Defines Insider Trading (WSJ)
Federal prosecutors were peppered with tough questions Tuesday on the legal underpinnings of their near-perfect record in insider-trading cases, raising the prospect that some convictions could be overturned. In an hourlong hearing in Manhattan, judges of the U.S. Court of Appeals for the Second Circuit signaled that federal prosecutors may have taken too broad a view of insider trading, saying Wall Street needs more of a “bright line” about what constitutes a crime. At issue is whether a trader, to be guilty of insider trading, must have known a tip was illegally disclosed in exchange for a reward. Prosecutors have argued they need only show that people who used insider information knew it had been disclosed in breach of a fiduciary duty.

Numericable Set to Issue Record Junk Bond (WSJ)
A French cable operator is preparing what could be the largest junk-bond sale in history—a sign of investors’ ravenous appetite for risk in an era of low rates and a mark of the profound shift in bond financing on a continent that had long borrowed heavily from its banks. Bankers working on the deal say Numericable Group SA NUM.FR +3.93% was expected to raise the equivalent of €8.4 billion ($11.6 billion) from the bond sale Wednesday, about €2 billion more than initially planned. The Numericable deal would clobber the current record junk-bond sale, the $6.5 billion issue last year by U.S. telecommunications provider Sprint Corp. So big is the Numericable offering that it was being parceled into several chunks and issued in both dollars and euros. According to a banker working on the deal, the chunks will yield between about 5% and 6.5%.

Flurry of Allergan Trading Preceded Offer (WSJ)
Investors made outsize bets on Allergan Inc. stock in the 10 days during which activist hedge-fund manager William Ackman was privately accumulating a stake in the Botox maker, according to a Wall Street Journal analysis. Mr. Ackman’s Pershing Square Capital Management LP said Monday after the close of trading that it had bought a 9.7% stake in Allergan and had joined with Valeant Pharmaceuticals International Inc. to buy Allergan. Mr. Ackman and Valeant unveiled the offer, valued at roughly $46 billion, on Tuesday, and Allergan’s stock surged 15%. Even after stripping out Mr. Ackman’s buying, the volume of stock trading in Allergan during the 10-day period before Monday’s announcement was 86% higher than its average over the previous year, according to the Journal analysis, based on trading data provided by research firm S&P Capital IQ. There is no indication investors were tipped off about Pershing’s and Valeant’s offer. And other traders could have bought based on the higher volume. But such a significant surge in trading suggests that information about the potential buyout bid could have leaked to other investors, analysts said.

Russian bank launches post-Crimea bond (FT)
A Russian bank in the oil-rich region of Tatarstan has become the country’s first lender to issue a dollar-denominated bond since Moscow’s official annexation of Crimea and the subsequent tension with western governments. Tatfondbank, which has branches across Russia, raised $70m on Tuesday through a three-year bond priced to yield 11 per cent for investors. The issue, which was privately placed, was led by Bank of America Merrill Lynch along with two Russian banks, Region Broker Company and Otkritie Capital, part of Nomos Bank. According to bankers the bond issue could indicate a thawing in Russia’s debt capital markets, which have been largely put on hold as global political discord over Ukraine escalates. Nick Darrant, head of emerging markets syndicate at BNP Paribas, said the deal showed an uptick in demand for Russian debt remained in spite of the political risks.

Einhorn Shorting Tech as ‘Cool Kid’ Stocks Show Bubble (Bloomberg, earlier)
“There is a clear consensus that we are witnessing our second tech bubble in 15 years,” the New York-based firm said in a quarterly letter to clients.

Florida Man Catches 800-Pound Shark, Fries It Up (HP)
Joey Polk landed an 805-pound mako shark while fishing off the Florida panhandle last Tuesday. Video of the epic haul captured the moment Polk and his cousins pulled the giant fish ashore — and then took the remains home to eat. The 29-year-old, who lives in Milton, Fla., told WKRG that he’d prefer to keep a low profile, and doesn’t want any unnecessary attention paid to land-based shark fishing…”The funny thing is, as I left the house to go out that night, I kissed my son and said ‘Daddy’s gonna catch up a big, big fish tonight,’ but I didn’t think it would be this big,” Polk said, according to SFGate. Polk said he doesn’t want people to get the impression that gulf waters are teeming with sharks, and he doesn’t want people to go rushing out to the beach to try and land the big fish either. He said it’s all about the sport. According to Polk, the majority of the sharks he pulls in get tagged and released. But after an exhausting, hour-long fight, Polk said that the 11-foot mako shark couldn’t be saved. “We release about 98% of what we catch… we only bring in the ones too injured to swim away,” Polk said, according to SFGate. “We tried to revive the fish and send him back out, but he was too worn out to swim.” The website reports that Polk butchered the shark and cooked it for his community. He said it fed about 250 people. Read more »