Dealbreaker

Posts by Dealbreaker

Write-Offs: 08.27.14

$$$ Judge Fast-Tracks Valeant, Pershing Suit Versus Allergan [WSJ]

$$$ Argentina wants deal with all holdout investors together [Reuters]

$$$ Young Americans Hate Cash [BusinessWeek]

$$$ Ebola a long-term ‘blip’ for Africa investors [NetNet]

$$$ Russian Bank Will Give You a Free Cat With Your Mortgage [Gawker] Read more »

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Opening Bell: 08.27.14

Legroom Gadget Maker Sees Sales Jump After Air-Rage Case (Bloomberg)
The Knee Defender, a gadget that blocks airplane seats from reclining, got a global boost after a scuffle between two passengers forced a United Airlines jet to make an unscheduled landing. The gizmo’s website crashed today after traffic surged, and sales rose “substantially” for the $21.95 plastic clips that have been on the market since 2003, said the inventor, Ira Goldman. While a product that interferes with another flier’s comfort may rub some people the wrong way, the issue is airlines’ legroom cutbacks, Goldman said. Carriers are shrinking space between rows — Spirit Airlines Inc.’s allotment is about 10 percent less than the industry standard — and using thinner cushions to squeeze more people into coach cabins. “They don’t have Plan B for the fact that a lot of people, when they sit down in their seat at the gate, their knees already are hitting the seat-back in front of them,” Goldman said in a telephone interview from Washington. The Knee Defender hit the headlines because of an in-flight squabble on United Flight 1462, which had to touch down on Aug. 24 in Chicago en route to Denver from Newark, New Jersey. One person installed a device that prevented the passenger in front of him from reclining, said Charlie Hobart, a spokesman for United Continental Holdings Inc. The Associated Press, citing an anonymous law enforcement source, gave a more-graphic account: Upset that her seat was locked, one traveler threw water at a man who employed a Knee Defender and refused to remove it at the request of a flight attendant.

Tim Hortons’ Canadian Fans Leery of American Hookup (Bloomberg)
“I don’t like the idea of an American company buying a Canadian company — it’s our brand,” Crosgrey, 60, said as she sipped a Tim Hortons coffee with three creams at a food court in downtown Toronto. “Timmy’s is always trying new things, adapting, they always have good service, and you always get your coffee fast no matter how long the lineup is. Burger King may screw it up.”

A new king of Kickstarter about to be crowned (CNBC)
With a little less than three days before the Coolest Cooler campaign ends, the project raised $10,211,436 as of late Tuesday afternoon. It’s well on its way to surpassing Pebble’s $10, 266,845. Created by Ryan Grepper, the high-tech cooler is part blender, part waterproof bluetooth summer DJ speaker system, part USB recharge station, and yes, also a cooler to keep your stuff cold, with an LED light, cutting board and bottle opener. Although it may seem hard to believe that a cooler—the bread-and-butter of low-tech companies like Coleman—could be the most-funded project ever in a Kickstarter universe of gamers and wearable device nerds, don’t think for a second there wasn’t a lot of hard work that went into this success story. In fact, evolving the cooler has been a passion of Grepper’s for a decade, he told CNBC. “Nine or 10 years ago, I was making a blender out of a weed wacker, putting an old car stereo into a cooler.” His early experiments didn’t work, but Grepper—who is a member of the CNBC Tech Crowd Council—did realize technology could transform a cooler into something even the cool kids might coo over. Grepper didn’t give up easily either. The Coolest Cooler failed the first time he rolled it out on Kickstarter in November 2013. “We weren’t successful,” he said. “We thought tailgating folks would want it, and Christmas would work. But I hadn’t done enough homework.” The failure—the first incarnation of the Coolest Cooler raised a little over $102,000 of a $125,000 goal, connected Grepper with enough people to give him the confidence to expand the project’s design and Kickstarter campaign. By the time the Coolest Cooler rolled out its second bid for crowdfunding fame, on July 8, Grepper had learned a few valuable lessons about finding success on Kickstarter. “I learned that Kickstarter and crowdfunding is a visual medium and people want to see what they are getting and we weren’t there the first time. I took the design to the stage you see it at now.” Timing is also key—when it comes to a cooler, summer rules over Santa and Sunday football tailgating. “The cooler market is hot in the summer,” Grepper said. “That was one of those hindsight realizations.”

Hutchin Hill, Citadel See Assets Jump as Pensions Call (Bloomberg)
Neil Chriss is hitting his stride. The math doctorate turned hedge-fund manager founded Hutchin Hill Capital LP more than six years ago and built it to cater to large investors. After posting annualized returns of 12 percent, about six times the average of his peers, he finds himself in the sweet spot for fundraising. Hutchin Hill’s multistrategy approach is the most popular hedge fund style this year, helping the New York-based firm double assets by attracting $1.2 billion.

Casino Loses 21K After Armored Car Drives Off With Money On Roof (AP)
An armored car company will reimburse an Atlantic City casino after nearly $21,000 fell from the roof of one of its trucks. Police tell The Press of Atlantic City an internal investigation by GardaWorld found no wrongdoing. The company picked up the cash at the soon-to-be-closed Revel casino on Aug. 6. Surveillance video showed the bag holding the cash on the roof as the truck left Revel. The bag was still on the roof when the truck pulled away from nearby Resorts Casino Hotel. A search failed to recover the money. Read more »

Write-Offs: 08.26.14

$$$ Buffett to Get 9% on $3 Billion Burger King Investment [Bloomberg]

$$$ Inversion Critics and Investors May Be Misjudging Burger King Deal [Dealbook]

$$$ Burger King Defends Plan to Buy Tim Hortons [WSJ]

$$$ Apple Said to Prepare New 12.9-Inch IPad for Early 2015 [Bloomberg]

$$$ Man Eats Pasta Off Subway Floor To Prove Vacuum’s Effectiveness [HP] Read more »

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Opening Bell: 08.26.14

Ackman Gains 30% With Burger King, Herbalife Wagers (Bloomberg)
Since Ackman’s three-hour presentation in Manhattan on July 22 that sent Herbalife’s stock soaring, the company has slumped 26 percent after reporting disappointing earnings. Ackman’s $1 billion bet that the firm’s shares will collapse has helped spur the money manager to his best year since 2009. Pershing Square Capital Management LP’s oldest fund has gained about 30 percent this year, according to a person with knowledge of the returns, compared with the average 2.5 percent for the hedge-fund industry. He’s done it through big wagers on a small group of companies. Yesterday, Ackman’s firm made $203 million on Burger King Worldwide Inc. after the fast-food chain said it was in talks to buy Tim Hortons Inc.

Warren Buffett to Help Finance Burger King’s Takeover of Tim Hortons (WSJ)
Investor Warren Buffett is helping finance Burger King Worldwide Inc.’s planned takeover of Canadian coffee-and-doughnut chain Tim Hortons Inc., according to people familiar with the matter, in a surprise twist that could add to investors’ enthusiasm for the deal. The Berkshire Hathaway Inc. BRKB +0.35% chairman and chief executive would invest in the deal in the form of preferred shares, some of the people said. Berkshire is expected to provide about 25% of the deal’s financing, one of the people said. The exact structure of Mr. Buffett’s participation in the deal remains unclear, and the discussions are ongoing.

Hedge Funds Sue to Get Argentine Bond Payment in London (Dealbook)
A group of hedge funds, including George Soros’s Quantum Partners and J. Kyle Bass’s Hayman Capital, is seeking a 226 million euro interest payment on Argentine bonds from Bank of New York Mellon that was blocked by a United States judge last month. In a lawsuit filed in London against Bank of New York, the trustee handling Argentina’s bond payments, the hedge funds contend that the bank’s London unit must release money that was deposited by Argentina for its euro-denominated bondholders. The money was part of a $539 million interest payment that Judge Thomas P. Griesa of the Federal District Court in Manhattan prevented the trustee from paying last month. The latest lawsuit, filed last Thursday, poses a challenge to the scope of Judge Griesa’s ruling and will further complicate what has been a long and drawn out battle between the government of Argentina and a group of New York hedge funds that have waged a court battle that has lasted years.

Why Amazon Is Paying $1 Billion to Help People Watch Video Games (BusinessWeek)
There are a few reasons Amazon would want Twitch, some of them Amazon-specific, others more general. First, a primer on Twitch. It’s a website on which people watch other people play video games. Some of the people playing are experts; others aren’t even all that good. To understand why Amazon would pay for a website such as this, you have to accept one fact: People like watching other people play video games. This consistently baffles many non-gamers, but it’s true. Twitch, founded in 2011 as part of now-defunct Justin.tv, has 55 million unique monthly users, and 7 million people log onto the website each day. While Web entertainment is reputedly all about short attention spans, Twitch users stick around for nearly two hours per day on average. Any company that attracts such deep levels of engagement is going to appeal to Silicon Valley’s acquirers, not least because advertising to those people could be very lucrative. And Amazon is increasingly interested in building its advertising business.

Quake leaves Napa Valley vintners with dregs (NYP)
The cherished $13 billion Napa Valley wine industry in California is picking up the pieces after it was ravaged by a 6.0 magnitude earthquake Sunday that left winemakers scrambling to salvage their last remaining bottles of red and white. “We’re wading around in a sea of Cabernet,” Henry Hill & Company wine warehouse owner Bill Hill told NBC News. Hill said his company’s building — which housed nearly 1,000 barrels of wine, including the pricey and highly sought after Cabernet Sauvignon — felt the full brunt of the earthquake and suffered “severe” damages. The epicenter of the earthquake was only six miles Southwest of Napa, which is home to approximately 430 wineries that contribute to an enormous industry with an annual economic impact of $50 billion, NBC News reports.

British man fined for fake kidnapping claim so he could stay out partying (NYDN)
A man has been fined by police after he told his girlfriend he had been kidnapped just so he could stay out all night partying. Officers spent seven hours searching for the man from Bolton, in northwest England, on Friday. His girlfriend had gone to the cops after he told her he was being held against his will over a debt. Instead he was at a house party. The 32-year-old was found after police checked closed-circuit TV footage taken close to his home, reported the BBC. “Considerable resources and time went into finding this man, who it transpires made the entire thing up so he could stay out and party,” Det. Insp. Jo Clawson said. “This is without doubt one of the most foolish and irresponsible incidents I have been involved in.” Read more »

Write-Offs: 08.25.14

$$$ U.S. confident its $5 billion S&P lawsuit was not retaliation [Reuters]

$$$ Burger King in Talks to Buy Canadian Chain Tim Hortons [Bloomberg]

$$$ Burger King deal could be a tax dodge whopper [CNBC]

$$$ Ackman’s Pershing Square Makes $203 Million on Burger King [Bloomberg]

$$$ A Rum Executive’s Weight and Interval Workouts [WSJ]

$$$She says she got help pinning the man down and asked him how it felt to be taken down by a mother of five and a grandmother of three.” [AP] Read more »

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Write-Offs: 08.22.14

$$$ Goldman to Buy Mortgage Debt for $3.15 Billion to End FHFA Probe [Bloomberg]

$$$ Whisky Hunter Makes 1,300% on Single Malt as Bordeaux Sours [Bloomberg]

$$$ Fed’s Yellen Hawks a Foggier Rate Future [WSJ]

$$$ Valeant and Pershing Square Said to Have Votes for Special Meeting of Botox Maker Allergan [Dealbook]

$$$ German landlady was right to evict tenant for using squeaky old sex swing: court [NYDN] Read more »

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Opening Bell: 08.22.14

Argentina slams U.S. Judge Griesa for ‘imperialist’ attitude (Reuters)
Argentina on Friday accused the U.S. judge who called the country’s new debt restructuring plan illegal of making “imperialist” comments against the South American nation. Latin America’s No. 3 economy tipped into its second default in 12 years in July after U.S. District Judge Thomas Griesa blocked payments to holders of debt issued under U.S. law that was restructured following its record default in 2002. Griesa ruled that measures announced by Argentina’s president this week to make debt payments locally and push bondholders to bring their debt under Argentine law violated past court rulings. But he stopped short of holding the country in contempt. Argentine Cabinet Chief Jorge Capitanich said U.S. District Judge Thomas Griesa’s choice of words were “unfortunate, incorrect and even, I would say, imperialist expressions”. The government has pulled no punches in its stinging criticism of Griesa. It has accused the judge of abusing Argentina’s national sovereignty and of siding with the U.S. investment funds who rejected large writedowns in the wake of 2002 and are suing the country for full payment on their bonds.

RBC Weighs Opening Itself to More Risk (WSJ)
The bank’s capital-markets business, after fighting for years to become a global player, threatens to become a victim of its own success. Earnings from capital markets, which the company on Friday said contributed nearly 27% to its overall profit, are bumping up against a self-imposed limit that is key to the risk control on which Canada’s banks built their recent reputation. When David McKay, the new chief executive of the bank, met with the board of directors for their annual offsite strategy session last month, they spent hours wrestling with the dilemma: how and whether to adhere to a pledge by RBC’s previous CEO to limit capital markets’ contribution to approximately 25% of total earnings, according to two people familiar with the discussions.

Citigroup Faces Curbs on Hedge-Fund Sales (WSJ)
The curbs, which haven’t previously been reported, result from the Aug. 5 approval of a settlement between Citigroup and the Securities and Exchange Commission of claims related to the bank’s earlier sale of certain debt products. The setback for Citigroup is partly due to timing. Other banks with similar settlements have been able to escape the restrictions because they came before a change in the law last year. Over the past two weeks, Citigroup has been sending letters to hedge-fund firms informing them that the bank is no longer able to steer investors to their funds. In the letter, Citigroup said it is working to resolve the issue with the SEC. Under the rules, the SEC has to issue a waiver to allow Citigroup to resume hedge-fund sales to clients.

Ackman gets needed Allergan votes (NYP)
Activist Bill Ackman has the votes to call a special shareholders meeting of Allergan shareholders, and a federal trial isn’t going to stop him, a California federal judge said Thursday. Judge David Carter mentioned the votes in a order denying the botox maker’s motion to expedite its case against Ackman, his Pershing Square hedge fund and Valeant, a Canadian drug company. Allergan claims the trio broke insider trading rules by taking “substantial steps” to engage in a hostile takeover before Ackman revealed Pershing Square owned 9.7 percent of Allergan shares. Allergan requested an expedited trial, saying a verdict was necessary before calling the special shareholders’ meeting Ackman has been organizing to oust six of the company’s directors. The ousters would pave the way for acceptance of Valeant’s $53 billion offer. Allergan has to call a special shareholders’ meeting within 120 days after at least 25 percent of shareholders request the meeting in a Delaware court.

“I Ate Taco Bell’s Entire New Dollar Menu in One Sitting, and Here’s What I Learned” (AW)
They rang me up for the 11 items. I handed over $12.99. And a short drive later, I arrived home with two satisfyingly hefty sacks of warm, damp, processed food. It was time to get started…Beefy Mini Quesadilla: It’s more like a melted beef and cheese soft taco than a quesadilla, but it’s actually pretty good. Surprisingly spicy thanks to its creamy chipotle sauce, it’s one of the few Taco Bell items I can think of in recent memory that didn’t require Fire Sauce. Is it worth $1? Definitely, though without the spicy sauce it would be a 75-center at best…Cheese Roll-Up: This is literally just half-melted cheese on a tortilla. It’s the kind of thing my 2-year-old would order, unroll out of curiosity and then slowly push toward the center of the table. Is it worth $1? No way. This is the toast sandwich of Taco Bell cuisine…Spicy Tostada: I’m officially full, and at any other point in my life, this is where I would stop. But this is legitimate journalism here, so I soldier on to the one item I’ve been most looking forward to: the Spicy Tostada. It’s basically a one-layer Mexican Pizza, which I’ve been a fan of since forever. In true Taco Bell to-go style, the tostada and its toppings have been slammed into the corner of the box, making the whole sloppy mess impossible to pick up with your hands. But I’ve got two whole napkins at the ready, so I do it anway. After getting through the gloppiest portion, I fold the rest into a sort of overstuffed hard taco, which really highlights how much more food you’re getting than with the rest of the menu. It’s earnestly good, but I’m officially in pain. Is it worth $1? Oh, hell yeah. Maybe $2. Read more »

Write-Offs: 08.21.14

$$$ U.S. Judge Says Argentina’s Debt Swap Proposal Is Illegal [WSJ]

$$$ Central Bankers Wrestle With Easy Money Amid Uneven Global Recovery [WSJ]

$$$ Millennial Bankers Get Raises as Firms Fight Defections [Bloomberg]

$$$ Blackstone Finds a Way to Outsource ‘Skin in the Game’ [Dealbook]

$$$ Dude Named Stoner Arrested On Pot Charges [NYP] Read more »

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