Posts by John Carney
Here’s CNBC’s sit down with Apple CEO Steve Jobs. There’s lots of talk about the iPhone, of course. But in the final minutes (at around the 5:15 mark in this clip), they ask him about backdating. Jobs actually seems to agree with DealBreaker, Larry Ribstein, Holman Jenkins and the rest of the Backdating Dissident Crew that the press coverage of backdating has been way off base. And, for you all you nervous Apple investors, Jobs tells CNBC “I don’t think it will affect current management.”
Tunku Varadarajan, the op-ed editor of the Wall Street Journal, is leaving the free-market oriented editorial page for a job in the news section. The paper famously has maintained a strict separation between its news and editorial sides, a division some have likened to a separation of “church and state” or a bank’s “Chinese Wall” (except, you know, one that works). There’s no word yet on the reasons for Varadarajan’s move. Maybe its just that he kept having trouble finding the editorial page in the newly miniature version of the paper.
We asked and you answered. Commenters were evenly divided between finding Bright Young Thing Emily Oster Cute and Not Cute nor Hot. But with additional ballots for “could get hot,” “IB Analyst hot” and “country club hot” we’re almost ready to declare Emily Oster officially “Fetching.”
But why not take this to a broader vote? So below please vote on Emily Oster’s Hotness Metrics.
Bloomberg’s reporting today that Steve Wynn is suing Lloyds of London for $54 million, the amount of the claim he submitted after he stuck his elbow through a Picasso that SAC Capital founder Stevie Cohen had agreed to buy for $139 million.
We don’t know. We like to think that if we put our elbow through a Picasso we’d do a lot more than wreck 1/3 of the thing. What kind of girly elbows does Wynn have, anyway?
But nonetheless we’re making a note to ourselves that if we ever find ourselves as guests at Stevie Cohen’s place, we’re keeping our gestures tight to the body and not pointing at anything at all.
Wynn Sues Lloyd’s After Claiming $54 Million for Picasso Tear [Bloomberg]
Yesterday we noted that calls for Nick Maounis to be banned—or at least shunned—from the capital markets after the collapse of his hedge fund, Amaranth, might be a little overwrought. The losses suffered by Amaranth were large, and many investors lost money, but more rational investors will want to ask whether this indicated some fundamental flaw with the way Maounis was running Amaranth’s investments rather than whether some abstract concept of justice will be violated if Maounis succeeds in launching a new hedge fund.
As a friend of DealBreaker’s said yesterday, “Are we in this to make money or dole out punishments? Cause if it’s the latter, there’s a long, long line of deserving parties and we’d better get started early.”
What’s more, it’s important to keep in mind that while Amaranth’s losses were large, so was Amaranth. The whole hedge fund industry is large. A more relevant measure of Amaranth’s losses is not the absolute dollars lost but the percentage of funds under management lost. According to someone familiar with the situation at Amaranth, its funds were down somewhere around 55 to 65 per cent when the decision was made to wind down. This was in a year when many funds made sub-par gains. And by shutting down operations when it did, Amaranth missed out on the fourth quarter in which many funds made up for earlier losses or paltry gains.
Historically, Amaranth’s funds under management relative losses are not enitrely unprecedented. Everyone remembers the Long-Term Capital Management debacle. But what about D.E. Shaw? Losses there in 1998 are said by some to have been, percentage wise, close to those Amaranth suffered. What’s more, D.E. Shaw’s losses wreaked havoc with one of it’s biggest investors, Bank of America. The bank was forced to disclose $372 million in trading losses, and saw its stock price plummet. (Amaranth’s banking partners seem to have been far less scorched by its losses.)Today, D.E. Shaw is one of the most admired hedge funds in the industry.
But shouldn’t there be some sort of probationary period for Maounis? Some time where he’s benched, forced to sit on the sidelines? Before answer that, consider that this might result in real opportunity costs. Maounis presumably has quantitative investment models that, despite the natural gas blow-up, are still otherwise functional. But these things have sell-by dates, and won’t last forever. It seems odd that investors be forced to surrender the possible gains from investing with Maounis because a quick return offends our sense of propriety.
As we mentioned yesterday, the best test for whether it is too soon for Maounis to return will be the market. Investors are the referees here, and they are the ones who will decide whether Maounis deserves a yellow card for Amaranth’s losses.
Chris Roush at Talking Biz News has the report on the 2006 ad revenue of the major business rags. And it’s not pretty.
Revenue from advertising for 14 business magazines fell slightly in both December and in 2006, according to data from the Magazine Publishers of America analyzed by Talking Biz News.
In terms of league tables, Forbes beat Business Week, and The Economist saw the biggest gains.
Also, there are 14 major business magazines? Who knew? Certainly not the advertisers.
Business magazines end 2006 on a down note [TalkingBizNews]
Self-styled “Greensboro Billionaire” Percy Walker hasn’t quite got his hands on the latest issue of Men’s Vogue— he’s too embarrassed to buy a women’s magazine—but the mere fact of the appearance of a story about Third Point founder Dan Loeb has inspired his fevered imaginations to dream up IM conversation’s with the famous fund manager, and to cite several examples of Loeb’s shareholder letter poetry. This one would be absolute perfection if it was just a bit tighter, and perhaps in haiku form:
There is little I enjoy as much
as watching you from afar
as your reputation and
as the same rate
as your falling returns.
Also, we’re not too embarrassed to buy a women’s magazine. Coming soon: Bess Levin reads Men’s Vogue’s Dan Loeb article!
Daniel Loeb Writes Percy [PercyWalker.com]