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golfAcademics Lee Bickerstaff (Miami University), David C. Cicero (Univ. of Alabama) and Andy Puckett (Univ. of Tennessee, Knoxville) analyzed data from a variety of sources to demonstrate that “CEOs that golf frequently (i.e., those in the top quartile of golf play, who play at least 22 rounds per year) are associated with firms that have lower operating performance and firm values. Numerous tests accounting for the possible endogenous nature of these relations support a conclusion that CEO shirking causes lower firm performance. We find that boards are more likely to replace CEOs who shirk, but CEOs with longer tenures or weaker governance environments appear to avoid disciplinary consequences.” [...] James Cayne, the former CEO of Bear Stearns, is a classic example of the golf-shirking CEO. The Wall Street Journal reported that Cayne played golf or bridge on 10 of 21 working days in July 200, which was the month that two Bear Sterns hedge funds collapsed (Kelly, 2007) and the financial crisis began in earnest. [ValueWalk]

Paul Singer Finds Someone Else To Be Annoyed With

The art of the raised eyebrow.So CalPERS thinks that hedge funds are too opaque, too complex, too expensive and just not right for it? Wrong, wrong, wrong and wrong! Read more »

The Value of Litigation Related Assets

homepage-imageWhile the adoption of commercial litigation finance is on the rise, the particulars of the asset class are not widely understood. What is a litigation related asset? How can it be valued? How can a company use litigation financing to more efficiently operate its business?

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Mountains-SwitzerlandIt appears that the Swiss banking arm of UK-based HSBC has quickly adapted to local customs and traditions. Read more »

  • 18 Nov 2014 at 10:00 AM
  • Banks

Wall Street Buying Some Extra-Strong Barn Doors

Probably not a one-man job.Because, you know, they probably should have had them already, and no one wants to have that look that Jamie Dimon had on his face when told about the incident. Read more »

Opening Bell: 11.18.14

William AckmanSnapchat Teams Up With Square to Offer Money-Transfer Feature (Bloomberg)
Snapchat Inc., developer of a mobile application for sending disappearing photos, is teaming up with payments company Square Inc. so that users can send cash to each other. Snapchat, which recently received an investment from Yahoo! Inc. that values the startup at $10 billion, will make the new feature, called Snapcash, available for users who are 18 or older with a debit card, it said in a blog post yesterday. The deal gives Square access to Snapchat’s users, who send more than 700 million disappearing “snaps” a day. Snapcash joins other apps such as Venmo in offering people a way to send and receive money quickly, such as when diners split a restaurant bill. This is Los Angeles-based Snapchat’s second potential revenue-generating product in addition to advertisements, which debuted last month.

Ackman ‘loses’ Allergan, pockets $2.7B profit (NYP)
Ackman’s Pershing Square hedge fund will make $2.7 billion from the $66 billion deal between Botox maker Allergan and Irish drugmaker Actavis. The profit of Pershing Square, which took a 9.7 stake in Allergan last spring and tried to help Valeant Pharmaceuticals buy it, is based on the difference between its average $126-per-share cost and Actavis’ $219-a-share winning bid. The Allergan investment, which accounts for about 30 percent of Pershing Square’s near-$20 billion in assets, had already helped earn his investors a 40 percent return this year as of Nov. 11, the latest numbers available.

Mega-Mergers Popular Again on Wall Street (Dealbook)
Mergers worth $100 billion, made on Monday, put Wall Street on pace for a year of deal-making rivaling those during the dot-com bubble and the private equity upsurge just before the financial crisis. The announcement of two more mega-deals — the $66 billion acquisition of the Botox-maker Allergan by Actavis , and the $34.6 billion takeover of the oil field services firm Baker Hughes by a bigger rival, Halliburton — made Monday a symbolic tipping point. With those transactions on the books, about $1.5 trillion in deals targeting American companies have been announced this year, the most since 2000, according to Thomson Reuters, the financial information company.

Goldman Fund Said to Fall 5.6% on Interest Rate Position (Bloomberg)
A $3.2 billion Goldman Sachs Group Inc. hedge fund that pools some of the firm’s best ideas declined 5.6 percent last month as a bet on the direction of U.S. interest rates went wrong, two people with knowledge of the matter said. Goldman Sachs Global Opportunities Fund, which invests based on the trade ideas from the money-management unit’s fixed-income team, took a position that interest rates would rise, only to see them decline, said the people, who asked not to be identified because the information is private.

No. 1 With a Bullet: ‘Nadeshot’ Becomes a Call of Duty Star (NYT)
Matt Haag, a professional video game player, makes close to a million dollars a year sitting in a soft chair smashing buttons. It is a fantastically sweet gig, and he will do about anything to keep it. That is why, on a recent morning, he was in a bungalow in Venice Beach, Calif., making pancakes. Not just regular pancakes, but high-protein pancakes with ingredients like flax oil and chia seeds, whose balance of carbohydrates, fat and protein was created by a dietitian hired to teach him how to eat more healthily. The pancakes were just the beginning of a monthlong training session that Red Bull, one of Mr. Haag’s sponsors, organized for him and his team, OpTic Gaming. Over the next several days, he and his fellow players gave blood while riding stationary bicycles, had their brains mapped by a computer and attended an hourlong yoga class where they learned, among other things, how to stretch their throbbing wrists. The purpose of all this: to help them get better at blowing their opponents away in video games. Three years ago, he was flipping burgers at McDonald’s. Today Mr. Haag, 22, skinny and blindingly pale, makes his living playing Call of Duty, a popular series of war games where players run around trying to shoot one another. Mr. Haag has 1.5 million YouTube subscribers along with a lucrative contract to live-stream his daily game sessions online. Known as Nadeshot (shorthand for “grenade shot”), he travels the world playing tournaments as spectators pack arenas to see him. At home near Chicago, he has a problem with fans showing up at his house.

Woman Pulled Dentures From Rival’s Mouth: Police (AP)
A Massachusetts woman is accused of yanking the false teeth out of another woman’s mouth and throwing a beer bottle at her. Caterina Froio-Chaput, of Oxford, was released on $100 bail after pleading not guilty to assault and battery and assault and battery with a dangerous weapon. Police say Froio-Chaput was refused a drink Wednesday at an American Legion and told to leave. They say she started hitting the bartender in the face, then pulled the false teeth from her mouth before hitting her in the chest with the bottle. The Telegram & Gazette reports Froio-Chaput told police she confronted the bartender who she believed was having an affair with her estranged husband. When police found the teeth in her pocket, she said they had been planted there. Read more »

Write-Offs: 11.17.14

$$$ Icahn: ‘Major correction’ in the next few years [Reuters]

$$$ Goldman, JPMorgan and Morgan Stanley Executives to Be Questioned at Commodities Hearing [Dealbook]

$$$ Deutsche Bank Ends Most CDS Trade [WSJ]

$$$ Whale Rock Capital Management, Matrix Capital Management, PAR Capital Management, Senator Investment Group, and Starboard Value appear to be the top stock pickers for the fourth quarter so far, according to regulatory filings and performance-based skill assessments conducted by Symmetric, a New York-based research firm. [NetNet]

$$$ Drunken, Vomiting Santas Relocating to Bushwick [Daily Intel] Read more »

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  • 17 Nov 2014 at 5:35 PM

Maybe Actavis Would Like To Buy Zoetis, Too?

What now?As Bill Ackman’s dear friend Carl Icahn might say, the animal drug company is getting downright unfriendly, telling the Pershing Square chief they’d prefer he kept his stake below 15% until it can decide whether it wants to be acquired by a serial roll-up company with no future. Of course, if there’s no well-heeled white knight hanging around, it could just roll up as many companies as it can to put itself outside of Valeant’s price range. Read more »