Dealbreaker

Entry: Citi Breaks Off Wachovia Talks With Wells, Sans Agreement

posted by beentheredonethat

Oct 09, 2008 5:21PM

WFC gets caught with the bag? That was a definitive merger agreement at $7? Enough to pull WFC down?

Entry: The Sound Of Silence

posted by beentheredonethat

Oct 12, 2008 4:57PM

@28

"Incendiary speculation without any supporting evidence involving publicly traded companies is just the kind of thing that can get you arrested."

The pressure is obviously getting to people, but what kind of horseshit is that? If that were true, the entire anyalst caste would be in Rikers, and no way you can name someone prosecuted, much less convicted, for saying anything they want about a company, absent outright fraud (company ooficers)
or market manipulators.

A month ago thinking MS would be in single digits would be "incendiary specualtion", too name just one.

Entry: The Sound Of Silence

posted by beentheredonethat

Oct 12, 2008 5:31PM

@25 and others who believe what they read......

"Morgan Stanley ``urgently needs rescue'' by the US Treasury, which should buy preferred stock to help protect Mitsubishi UFJ Financial Group Inc.'s stake in the investment bank, George Soros wrote in the Financial Times."

This just published in Australia.

Entry: The Sound Of Silence

posted by beentheredonethat

Oct 12, 2008 5:43PM

@47

That last sentence cannot be correct. To go without that clause is suicide.
besides, adverse would normally read "material" and a cratering of the stock price is a "material change". What Soros seems to be saying in this mornings (Monday) FT is that even with the Mitsubishi stake, a run on the bank is continuing. If you were a hedge fund, why would you stay?

Entry: The Sound Of Silence

posted by beentheredonethat

Oct 12, 2008 6:00PM

The material change need not be limited to a drop in the share price. It could easily be tied to capital ratios, outflows, etc......The point is anything can happen, and to assume it will close on the same terms as announced would not be prudent. As you can see, the market believes otherwise. As none of us knows the small print, do you really think they would put on a pair of handcuffs amidst this turmoil? And to compare this deal to you purchasing common stock is not really apropos.

As far as making people nervouse, really hard to see how that can be exacerbated at this point. Do you have any idea the number of joe-six packs have a very large cash stash at home right now?

Entry: The Sound Of Silence

posted by beentheredonethat

Oct 12, 2008 6:15PM

@60

I'm not disagreeing with you. I'm not talking about folks with stock or bond holdings, except perhaps in a pension plan not controlled by them I'm talking about guys who are afraid their local bank is not going to open on any given day. The same guys who remember their grandfather's stories which are starting to sound not quite far-fetched.

All I'm saying is there are a bunch of people withdrawing their paychecks as soon as they hit.....

Entry: The Sound Of Silence

posted by beentheredonethat

Oct 12, 2008 6:22PM

@60

Also, to whatever degree Main Street has panicked (not much), it pales in comparison to the panic of the professionals. You are not under the impression Main Street can swing the Dow a 1,000 points intra-day I trust.

Main Street has been well behaved throughout this, it is the moneychangers who once again have fled the temple. (FDR 1933 Inaugural speech)

Entry: The Sound Of Silence

posted by beentheredonethat

Oct 12, 2008 6:31PM

Okay, boys, here's the fine print in the MS-Mitsubishi deal. Get Sullivan and Cromwell on the line.....

"However, Morgan only makes a bare number of representations and warranties in the agreement. The most important of these for providing a possible out to Mitsubishi is that Morgan represents that:

No Material Adverse Effect. Since August 31, 2008 and except as described in the SEC Reports, no event or circumstance has occurred that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect."

A decent lawyer could drive a truck through the holes in the language. If Mitsubishi wants an out, its got one, and MS would be years dead before it ever saw a court of law.

Entry: The Sound Of Silence

posted by beentheredonethat

Oct 12, 2008 6:47PM

@72

Complain to the NY Times. They are saying that is the EXACT LANGUAGE contained in the agreement. It's posted there now....

Entry: The Sound Of Silence

posted by beentheredonethat

Oct 12, 2008 6:51PM

From NY Times:

"The investor agreement defines a “Material Adverse Effect” to mean:

any fact, circumstance, event, change, effect or occurrence that, individually or in the aggregate with all other facts, circumstances, events, changes, effects or occurrences, has a material adverse effect on (i) the business, assets, liabilities, results of operation or financial condition of the Company and its subsidiaries taken as a whole or (ii) the ability of the Company to consummate the transactions contemplated by this Agreement, other than, in each case, any adverse effect resulting from the announcement of the transactions contemplated by this Agreement."

Apparently someone leaked the agreement to the Times, because they are quoting it at will.............

Entry: The Sound Of Silence

posted by beentheredonethat

Oct 12, 2008 6:58PM

@73

Love the idea of castigating Main Street and feeling sorry for the hedge funds, those bastions of hot money, who have to sell. If Ma and Pa have a kid in college and the tuition needs to be paid, they need the cash as well. Besides, the amount of selling from Main Street doesn't even register when looked at alongside the amount sold by the funds, that oh-so-professional class. Please.

Entry: Mitsubishi Takes Half A Page From Buffett's Play(a) Book

posted by beentheredonethat

Oct 12, 2008 7:12PM

Mitsubishi will get its price reset. MS can't afford a breakdown in negotiations. All the Japanese have to do is wait then out until the early morning, and will be forced to capitulate to whatever is on the table then. If it's not enough to suit them,, they will then call Paulson. NO ONE has an ounce of loeverage over Mitsubishi in these negotiations. Paulson will tell MS to take whatever they can get, shut the fuck up, and call him back on his private line.

Entry: The Sound Of Silence

posted by beentheredonethat

Oct 12, 2008 7:13PM

Blodgett is so very last decade. Who gives a fuck.

Entry: The Sound Of Silence

posted by beentheredonethat

Oct 12, 2008 7:15PM

Mitsubishi will get its price reset. MS can't afford a breakdown in negotiations. All the Japanese have to do is wait then out until the early morning, and MS will be forced to capitulate to whatever is on the table then, as the markets will be opening. If it's not enough to suit them,, they will then call Paulson. NO ONE has an ounce of leverage over Mitsubishi in these negotiations. Paulson will tell MS to take whatever they can get, shut the fuck up, and call him back on his private line.

Entry: Mitsubishi Takes Half A Page From Buffett's Play(a) Book

posted by beentheredonethat

Oct 12, 2008 7:17PM

@4

Not a chance in the 20-25 range. Why would they even be negotiating? 25 was the original pricew (near enough) and if Mitsubishi is willing to do a deal at 20, MS would say yes faster than lickety-split. The price will be nearer to half that range.

Entry: The Sound Of Silence

posted by beentheredonethat

Oct 12, 2008 7:23PM

@90

The fact that MS is re-negotiating pretty much concedes the MAC point. No material adverse change, why the renegotiation? If MS believed that, they would have demanded to consumate the deal as agreed. Clearly they blinked. Clearly they are desperate. Clearly they have at most 12 hours to solve this. Clearly MUFG will be doing Soduko puzzles for the next 11 1/2 hours, will then look up and ask MS, Ready Yet? 10 bucks. 12 if you throw in HQ.

Entry: Mitsubishi Takes Half A Page From Buffett's Play(a) Book

posted by beentheredonethat

Oct 12, 2008 7:26PM

@7
That is a parrot from the NY Times reporter who doesn't know shit. This is way above his paygrade, he's probably less than 30 years old, and has a journalism degree. And writing for the NY Times, he's gay, ADD, visually impaired, lives UWS, goes to temple twice a year.

Entry: Mitsubishi Takes Half A Page From Buffett's Play(a) Book

posted by beentheredonethat

Oct 12, 2008 7:30PM

@ 8&9

Absolutely correct. Even with the large macro hedge funds, when you havve an agreement, and then bonus time comes, you end up negotiating what you believed to be agreed upon 12 months ago.....Way of the world now......There are a 1000 outs in anyone of these types of agreements, and if you can't find a good one, you go judge shopping. Especially elected ones.

Entry: Mitsubishi Takes Half A Page From Buffett's Play(a) Book

posted by beentheredonethat

Oct 12, 2008 7:42PM

Just so everyone is aware, the G-7 has publicly stated MS will not go the way of LEH, so there is a floor here. Where? Not sure, but $2 is a reasonable bet considering how much has been flowing out of the firm.