Blackstone may submit a bid for the Chrysler group as early as today, the Detroit News reported this morning. As of late last night no bids had been received, the paper said. Earlier reports had indicated that the bids were due on Thursday. Blackstone is said to be working with Centerbridge Partners on a joint bid.
So what happened to that Thursday deadline? In our experience, the people who actually work at private equity shops are loathe to submit bids on Thursdays, so this isn’t that surprising. The problem with the Thursday bid is that it gives the sellers all day Friday to consider the bid, and raises the possibility that a second round of bidding might start as early as Saturday or Sunday. A good Friday afternoon bid probably frees up the weekend, since a response probably won’t come in until Monday.
Chrysler suitors rush to make bids [Detroit News]
Companies
One of the more creative Enron lawsuits was dismissed by a Manhattan federal judge yesterday. The plaintiffs were shareholders of JPMorgan Chase who said they bought the stock because of the company’s reputation for integrity and financial discipline but had been deceived because JPMorgan Chase was helping Enron, a major client. You can see how free-wheeling this kind of liability could get–and how it would really amount to a requirement that banks police all their clients for fraud.
Ever wonder how those science fiction worlds where the banks run their own police forces get started? Well, now we know. And we’re glad we don’t yet have to welcome our new banking police masters. Yet.
We will admit that there is some evil part of our brains that is sorry to see this lawsuit go. It’s the part that is going to miss the spectacle of JPMorgan arguing that it had not overstated its own reputation for integrity. They could have done this in two ways. First, by arguing that they fully deserved a high reputation, but our lawyer friends tell us that this would have been almost impossible to prove. Second, by arguing that their reputation wasn’t really all that. You know, the “look, bitch, you knew I was a snake when you picked me up” defense. This also might not have been the way JP Morgan wanted to go, either. But it sure would have been fun to watch them squirm between the unprovable and the unpalatable.
Enron Class-Action Suit Is Dismissed [Reuters in NYT]
Okay. Here’s a little story. Around a year ago we were doing a lot of freelance writing, growing unpersuasive facial hair and trying to figure out what to do with ourselves now that we had bailed out of the world of high yield finance. One of the things that kept us entertained during this period was a quirky little online video sharing community called YouTube.
We liked it so much we even pitched a story about it to the New York Times. To our surprise, the Times loved the idea and told us to bring them a story in two weeks. This turned out to be harder than we thought, in part because the users of the still young YouTube community were very wary of outsiders emailing them and asking questions.
One then-prominent YouTuber answered our inquiries with this:
But how can i REALLY know you’re from the new york times? you know, strangers on-line tend to lie…
Example: sometimes when they say that they are female when they are chatting … they are really male… ;)
I hope you understand where i’m coming from…
But by far our favorite response was this one:
lol NY Times, ok dude. Sure I’ll call you, then next thing I know we’re in the back seat of your car behind a McDonald’s and you claim that you ‘forgot’ the rubbers but it’s okay because you’ve ‘had a vasectomy’ and your case of scabies has ‘cleared up’.
The Wall Street Journal would’ve been a better line.
We did finally get the story, and it ran in the Times under the headline “People Who Watch People: Lost in an Online Hall of Mirrors.” It was a bright and shining moment in our fledgling freelance writing career. Not only had we landed a byline in the Times, we had written one of the first articles in a mainstream media outlet about a cutting edge technology we were sure was going to be huge. We were journalists, cutting-edge, trend-defining journalists. And we were very happy about it.
Then Google bought YouTube. And even the receptionist got rich. Suddenly writing about cutting edge technologies didn’t seem like such a bright idea.
The next time we discover the Next Big Thing we’re not pitching anyone any damn stories about it. We’re going to work for them. Even if it means we’re sorting the mail or ordering post-it notes. Because it is just too expensive not to be Shannon Hermes.
YouTube’s making millionaires in the lower ranks [MarketWatch via CrossingWallStreet]
That Malcolm Gladwell article we pointed to the other day has been taking some hits lately. Brad DeLong totally harshes on the the Free Jeff Skilling buzz here. But more interesting, Steve Sailer points out that Malcolm gets the distinction between a puzzle and a mystery exactly backwards.
Gladwell writes: “Osama bin Laden’s whereabouts are a puzzle. We can’t find him because we don’t have enough information…”
No, that’s a mystery, as the term is normally used. For example, in Raymond Chandler’s famous murder mystery The Big Sleep, detective Philip Marlowe is hired to find former bootlegger Rusty Regan. Marlowe doesn’t have enough information to find him so he goes around searching for clues. Only at the very end does he know enough to figure out where Regan is. Similarly, according to Gladwell, we need more clues to find Osama, so his whereabouts are a mystery, not a puzzle.
Gladwell goes on:
“The problem of what would happen in Iraq after the toppling of Saddam Hussein was, by contrast, a mystery… Mysteries require judgments and the assessment of uncertainty, and the hard part is not that we have too little information but that we have too much.”
No, that would be better labeled a “puzzle.” Rubik’s Cube is a classic puzzle: everything you need to solve the puzzle is right in front of your eyes, but it’s still very hard to figure out.
Brad DeLong: “Gladwell seems more than a bit thick here.” [iSteve.com]
We don’t want to harp on the story of Gary Wandschneider, the Pepsi Bottling Group executive who went to the Feds when his attempt to get a little on the side made him the target of a twenty-two year old scammer extortionist. He’s certainly not the first wealthy, older man to find himself in a compromising situation with a nice-looking younger girl. And he probably never expected the whole thing to end up with his picture splattered across the New York Post and the internets. And now he’s out of a job. (But don’t feel too bad. He pulled down six million bucks last year, so if he’s not an idiot, he’ll be okay.)
But the news that Wandshneider was fired/quit/just stopped coming to work had us recalling another executive caught up in a sex-scandal of sorts. We’re talking, of course, about William Wayne Pace (pictured above and left), the Time Warner executive who allegedly gave lots of money and gifts to Andrea Schwartz, who police claim was leading a drug and prostitution ring. We made a couple of calls this morning but no one returned them. Nonetheless, it seems that Pace is still toiling away as chief financial officer for Time Warner.
So maybe that was Wandshneider’s biggest mistake—he was working for the wrong company. If you want to have an “inappropriate relationship” with a young woman—the kind where lots of money changes hands—you go to work for Time Warner. Pepsi is for prudes.
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Companies
Extorted Pepsi Exec’s Daughter Reaches Out To DealBreaker (Probably)
By John CarneyIn the comments to our post on sextortionist Jessica Wolcott’s victim—some mustachioed dude at Pepsi you’ve never heard of and probably won’t hear of again—we’ve apparently heard from his daughter, Nikki. Now we can’t vouch that this is definitely the victim’s daughter, of course. But the comment is completely earnest, and actually a bit sweet. Seems genuine enough. And we have some reason to believe that a Niki Wandschneider does exist, and may well be the Pepsi dude’s daughter. Click through this link and tell us what you think. Do we have the real Nikki?
More importantly, Nikki, if you’re out there, it’s us, DealBreaker. We’d love to hear more from you. Send us an email to tips@dealbreaker.com.
As long as we’re on the subject of Ron Burkle, we might as well note that there’s something not-quite-right about the criticism of the guy leveled by that celebrity-and-media gossip blog called Gawker. More particularly, Gawker has been challenging the notion that Burkle “despises” Jeffrey Epstein, the wealthy money manager indicted earlier this year after police uncovered evidence that he had been getting naked and masturbating while local high school girls manipulated his flesh.
We too had thought the two men were friends. But just because they may have been friends back before Epstein was indicted doesn’t mean they’re friends after. This might be exactly the sort of thing that could make someone go from enjoying someone’s company to despising them. We certainly didn’t have anything against Epstein before the stories came out. So, like, maybe Burkle despises him now. And wouldn’t that kind of be a good thing? We mean, wouldn’t it show a bit of character, a moral compass, that sort of thing?
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