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Drop it like it's hot...

Microsoft Withdraws Yahoo Offer
After Sweetened Bid Is Rejected
By KEVIN J. DELANEY, MATTHEW KARNITSCHNIG and ROBERT A. GUTH
May 3, 2008 9:40 p.m.

Microsoft Corp. said it abandoned its offer for Yahoo Inc., as the two companies failed to bridge a gap between them on price.

Microsoft released a letter from Chief Executive Steve Ballmer to Yahoo CEO Jerry Yang saying that Microsoft had said it was willing to raise its offer to $33 a share for Yahoo, but Yahoo demanded at least $4 per share more.

looks like stevie is calling jerry out, this can't be the final chapter of this book (can it?). will he go back after yhoo drops to pre bid levels as investors unload the truck?

asleep at the switch?

on a sleepy friday when no one was at work (at least on the trading floors), S&P took a big leap and cut the “outlook”, but not the rating, (talk about going out on a limb) on golden slacks (thanks cramer) and the lehman sisters.

http://www.bloomberg.com/apps/news?pid=20601087&sid=awvTfLGlyzws&refer=home

seriously, do any institutions still read their propaganda? take a gander at some of the riveting analysis they provide as rationale for the “downgrade”: “our current expectation is that net revenues could decline 20%-30% year-on-year…” (let me guess, they were on the earnings call too); but wait, there’s more: “…we see some possibility, were there to be persisting capital markets turmoil and sharply weakening economic conditions, that financial performance could deteriorate significantly.''

talk about a crystal balls and deep analysis. perhaps we should take this as a sign of a market bottom for financials (never mind the bounce they had on thursday despite CIT). are the “major agencies” still relevant? just askin’…

Comments

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Entry: Deposit Insurance For Sophisticated Investors?

posted by Investorcluzo

Mar 19, 2008 4:25PM

if we must continue to speak about this topic…while nicole does make some good points, she also makes certain assumptions that don’t hold water. people do learn from past mistakes. lehman, for example, was much better positioned for this liquidity crisis as a result of their experience in 1998. do you think the banks will go back to their lax lending standards any time soon? just because the fed came in this time, doesn’t mean that people will assume they’ll do it again. let’s not forget how this all began – rumors. if the fed didn’t step in, I believe the next one would fall with greater alacrity because no one would want to be left holding the bag. perhaps you wouldn’t even get rumors first, just redemptions as the “smart” money looked to get out before the herd.

let’s be honest here, everyone knew what the big bad bear was doing: mortgages 24/7. how long have we known that RMBS/CMBS/CDO’s and the like were black boxes? at the very least, it’s been a year - and we still don’t know the value of the bear portfolio. in the final analysis, it will be worth what someone is willing to pay for it – we just don’t know who that “someone” is…yet (wilbur/warren?). soooo, should we punish everyone to make a point to the hedgies and the well to do? not in an election year!

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Entry: Can Bear Stearns Shareholders Turn Down The Deal?

posted by Investorcluzo

Mar 19, 2008 2:46PM

carney, stop the (refer) madness! you are almost as bad as obama in your sale of hope to the poor shareholders and employees of bear. look, if the bank (fed in this case) forecloses (remember, this isn’t a “bailout”) on your home, you aren’t getting it back unless you come up with capital. the problem is, who’s going to lend you funds when you’re already in foreclosure? I’ll tell you: nobody, nada, zero, zilch. buying BSc now is pure speculation that jaime d has a sliver goodness in his heart – after all, his stock is up almost 3x the value of bear’s (stated) equity since the announcement. crack kills, people, get off the crack! next topic please…

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Entry: What To Do If You Have (Or Is It Had?) A Summer Internship At Bear Stearns

posted by Investorcluzo

Mar 19, 2008 10:23AM

market is in the tank, look at leh, gs, and ms - all reported earnings of 40%-50% below last year. what does that tell you? limited activity for the boys and girls currently roaming the halls, not to mention even more limited activity for the summers. I would have to imagine that the number of picnics in the park sponsored by the banks will decrease too. all in all, not a great environment to "learn" or have “fun” (as all the banks like to say)...perhaps you could assist your finance professor as he/she writes their next tome on the financial crisis taking place now.

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Entry: Think About The Kids

posted by Investorcluzo

Mar 18, 2008 1:28PM

if true, perhaps billionaire investor joe lewis would like to go back into his till. think about it. for $236 million jpm is getting the bank. that is a pittance to a someone with his jl's means. not to mention, he would only need to come up with $172 million (he owns 9.4% and employees hold 24% of the company - assuming they vote with him). okay, so now what? can't sell the building jamie d locked that down over the weekend? pb business will get (is getting) raided by the competition, can't sell that. maybe you can sell the i-bank, but to who - HSBC? then you have a fire sale of assets. everybody knows you want to sell them, so what are they going to pay you for them? writing is on the wall people...can you get a few more shillings from the good folks at jpm? perhaps, but it ain't gonna be much. hope springs eternal, and I really want to root for you, but at some point you have to face the music.

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Entry: Goldman Quietly Warning Employees Of Another Round Of Layoffs

posted by Investorcluzo

Mar 18, 2008 12:12PM

c'mon people, get a clue. as bob pissonme just said, bsc holders are delusional...so jpm was up $4 yesterday (equates to a market cap gain of $13.6 billion for those keeping score at home), that's more than the value of bsc's book value which was $9.7 billion (at the end of last qtr, by the way, that's before write-downs). I could be wrong here, but I'd bet good money that the market wouldn't pay $117 a share for bear today, tomorrow or next month. anyone care to bet/argue?

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Entry: Think About The Kids

posted by Investorcluzo

Mar 18, 2008 11:49AM

before the jpm employees start snickering (or perhaps they should stop snickering), don't be fooled into a false sense of security. there will be reductions at 277 park too. the integration will serve as yet another reason to purge the ranks. dark days ahead...could be a good time to load up on financials, outlook bleak, everyone calling for more pain (just be sure to diversify or buy a basket).

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Entry: Bear Stearns Lawsuits Already Getting Filed

posted by Investorcluzo

Mar 18, 2008 11:35AM

enough about bear...anyone else listen to the lehman call? sounded like a big group hug, I thought I was going to tear up at the end. in fact, given all the doom and gloom the numbers looked good - those $20 puts don't look so good today, huh? they talked a lot about exposures ect. noting that high yield acquisition finance book dropped 25% from last quarter. however, that was largely on the back of a significant reduction in "contingent commitments" (thanks probably, in part, to a bunch of busted deals). what they didn't say was that "funded loans" went up by $200 million. this is the $hit that is going to take a haircut (or scalping depending on your view of the market). then they talked about paying their people competitively so comp as a percent of revenue went up. what you didn't hear (because they didn't want to tell the bankers still working there) was that comp and benefits was down 26% and headcount was up 4% from last year. ouch. but, what-evs' they're still employed (for now). half empty, half full...you decide.

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Entry: Goldman Quietly Warning Employees Of Another Round Of Layoffs

posted by Investorcluzo

Mar 18, 2008 11:09AM

me thinks big r protests too much. please see wsj article pg. c5. the issue with bear is that their counterparties have no confidence in the financial wherewithal of the bank. do you really think 'effing up this deal is going to change that view? moreover, what do you think would happen if the fed backed a deal by a foreign bank (like HSBC, which appears to be the only other stalking horse with credibility), maybe just a little political fallout? exhibit a, the boeing fiasco...

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Entry: Lehman Under "Domino Theory" Pressure

posted by Investorcluzo

Mar 17, 2008 4:01PM

@Brucewayne: sweet mother of mary joseph! I think you're on the wrong site, I think you're looking for "manhunt"...I knew there was a reason I didn't like the bally's gym downtown. damn, I have to go take another shower because this feels so dirty!

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Entry: Lehman Under "Domino Theory" Pressure

posted by Investorcluzo

Mar 17, 2008 3:51PM

I was wondering when "girl" would pipe up, I got the sense she was feeling a bit left out. and for he record, we all know that batman is gay...

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Entry: Lehman Under "Domino Theory" Pressure

posted by Investorcluzo

Mar 17, 2008 3:13PM

as an unbiased third party, I will vouch for @golden girl not being ugly. but I'm not sure that's who @2:39 was referring to...

@2:53 - cramer is a recluse, he basically just said that he's a stock pumper. wtf? he should have just kept his mouth shut - who needs that kind of "advice"?

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Entry: Bailing Out Bear’s Creditors?

posted by Investorcluzo

Mar 17, 2008 3:03PM

should have bought the debt people...anyone know what the credit spreads are doing today? and riddle me this batman, what happens if the markets miraculously turn around and all that collateral bear has on the books is actually worth 85 cents on the dollar (due to the "non-bailout", b/c this isn't a "bailout"). would the shareholders revolt before a vote? not saying that it will, just playing devil's advocate. but with the stock trading at 100%+ premium to jamie's offer, there has to be more than just short covering going on. just askin'...

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Entry: Lehman Under "Domino Theory" Pressure

posted by Investorcluzo

Mar 17, 2008 2:13PM

@ random banker: it's called the madness of crowds. just like new york cops, it's shoot first and ask questions later (did I just say that), jokes, I joke. it reminds me of this: http://www.youtube.com/watch?v=DQ_nM5NkQzs unfortunately, no one has yet to sit down at the table and think about what is really going on here. the end is here/near, get your dollars ready, because there are a few screaming buys out there.

carney, what do I get if I run past erin b with a deal breaker sign? I could be there in 20 min...

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Entry: Does Bear Stearns Own 383 Madison?

posted by Investorcluzo

Mar 17, 2008 11:57AM

@10:55/11:15: it was a clip on cnbc. the was a blonde woman with a beach bag (clearly a closing dinner parting gift) and a wheely (sp?) (yes, a wheely) leaving the building getting into a black car. I have a feeling those car vouchers are in short supply right about now. anyone from bear care to get us a few cars to a.c. tonight? just askin'...

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Entry: Haphazard Harem

posted by Investorcluzo

Mar 17, 2008 10:54AM

so they call it "house sitting" when in mixed company...we now have a new euphemism. and eliot thought this bear mess would keep him out of the paper. dow up 34 pts.

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Entry: Does Bear Stearns Own 383 Madison?

posted by Investorcluzo

Mar 17, 2008 10:17AM

@ golden girl: given that it's st. paddy's day, I believe the festivities should start a little earlier tonight. make it happen carney!

btw, did you see the pictures of the bear employees leaving with pitch books, ect? I'm sure they didn't want the cameras catching that action.

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Entry: Does Bear Stearns Own 383 Madison?

posted by Investorcluzo

Mar 17, 2008 9:48AM

I thought we agreed we were done talking about this subject? more importantly, jpm is up a buck fifty. purchase price just jumped to $2.08...

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Entry: The Wall Street Way

posted by Investorcluzo

Mar 17, 2008 9:43AM

first beyatches! beat you dave...great video. I loved "leroy" the stock broker, so p.c. speaking of videos, anyone else notice cnbc flashing the stock prices of financials where they typically just show the major market avgs and commodities? this is just adding to the hysteria. that's what sells ad time so, as jimmy cayne would say, "it's par for the course".

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Entry: Live-Blogging The JP Morgan Chase Bear Stearns Conference Call

posted by Investorcluzo

Mar 16, 2008 11:50PM

on the propery front, here is some clarity from the 2007K:

The Company has entered into an operating lease arrangement for its world headquarters at 383 Madison Avenue in New York City (the
"Synthetic Lease"). Under the terms of the Synthetic Lease, the Company is obligated to make monthly payments based on the lessor's
underlying interest costs. The Synthetic Lease expires on August 10, 2012 unless both parties agree to a renewal prior to expiration. At the
expiration date of the Synthetic Lease, the Company has the right to purchase the building for the amount of the then outstanding indebtedness
of the lessor or to arrange for the sale of the property with the proceeds of the sale to be used to satisfy the lessor's debt obligation. If the sale of
the property does not generate sufficient proceeds to satisfy the lessor's debt obligation, the Company is required to fund the shortfall up to a maximum residual value guarantee. As of November 30, 2007, there was no expected shortfall and the maximum residual value guarantee was
approximately $570 million.

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Entry: Live-Blogging The JP Morgan Chase Bear Stearns Conference Call

posted by Investorcluzo

Mar 16, 2008 11:25PM

I realize I'm late to this party but just listening to the call now. real price jpm is paying is closer to $43 - $50 per share when you build in the $5-$6 billion in "transaction costs" which means they are taking a very large mark against the book. while it's not clear how much will be allocated to litigation/consolidation, but I'm fairly certain it will be a small piece of the total. I'm not sure the investors could argue against the price in the light of that fact. that also includes severance, so it appears they intend to give the employees who get shown the door a little kiss (I bet the people that got RIF'd last year are happy now - if they sold their stock). also interesting to note that there is no collar on the transaction price, so if jpm takes a hit tomorrow, $2.00 could be $1.50. also interesting to note that the management from jpm is effectively taking over tonight, unlike cfc/bofa which will not be involved in ops until the deal closes.

@ girl: I'm in for your benefit. given that the employees own 23% of the firm, you'll have a head start on your counter offer.