Is there a better word in the English language than “monetize”?1 When you have a thing, and you would rather have money than that thing, you have about two choices, which are:
- sell the thing, or
- monetize the thing.
Choice one is straightforward and boring; choice two has the advantage of a wholly indeterminate meaning, plus sometimes you get your money and get to keep the thing. Anyway what happened here?
Qatar has cashed in its remaining warrants in Britain’s Barclays Plc, a move that should yield a $280 million profit and still leaves the sovereign wealth fund as the bank’s top shareholder following a controversial fundraising in 2008.
Deutsche Bank AG and Goldman Sachs Group Inc said they would sell up to 303.3 million shares – worth 740 million pounds – to comply with Qatar’s request. They sold shares at 244 pence apiece, a 4 percent discount to Friday’s closing share price, but did not confirm whether all the shares had been sold.
Qatar Holding said in a separate statement late on Sunday it had monetized its remaining holding of 379 million units of Barclays warrants – instruments that convert into shares – without affecting its 6.65 percent stake.
The warrants have not yet been converted, but can do so at 198 pence per share in the next year, which would reap a 180 million pound profit at current prices.
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Have you ever had construction going on nearby your home? Was it loud? Annoying? Did keep it keep you up in the middle of the night? Did you seriously consider opening your window and screaming “Hey! Shut the hell up down there!” or even confronting the people making all that racket face to face? Olivier Desbarres can relate. Or at least he can half relate. Because while most of you were probably talked out of making some sort of scene, either by your significant other or your own impulse control, on October 20th Desbarres decided to go in another direction, the one that involved introducing himself to the construction workers building a house near his own by screaming, “I’m gonna go after you, I will haunt you, I’m gonna burn your fucking house down, I will find your fucking family,” a task he noted would be fairly simple and straightforward (“I can find [them] very easily,” he explained, “I’m a man with resources”), in case there were doubts (a fairly reasonable concern, as there are a lot of people in Singapore and how were these guys supposed to know he had an army of Barclays researchers at his disposal?).
Still worried that the group wasn’t taking his threats seriously on account of the casual look he was sporting that morning– shorts and sandals– Desbarres then picked up some sheet metal and launched it in their direction, presumably to demonstrate he meant business.* Although that would have been a good time to make his exit, at that point Desbarres noticed that one of the men had been recording him without his consent, leading to: Read more »
What can we make of this Barclays FERC thing? Besides, like, ha ha ha Barclays you sure like manipulating things? Quick version is: the Federal Energy Regulatory Commission has proposed to fine Barclays $470mm for manipulating California electricity markets by uneconomically buying/selling spot physical electricity in order to manipulate up/down the settlement prices it received on its electricity swaps. Barclays disagrees, etc. You can find the FERC order if you look hard enough1 and I am not an energy-trading guy and I will tell you: I found it entirely incomprehensible! So there’s that.
One quick and obvious thing to make of all this is: remember how one problem with Libor is that, though it underlies zillions of dollars of real economic activity (mostly swaps and stuff, some loans), Libor itself has for years been a nearly purely made-up number, not based on any actual transactions, so you can magically manipulate Libor by just pointing and saying “I MANIPULATE THEE”? That is not true of, God, some sort of electricity price or something: Read more »
Breaking the speed limit in a school zone, for example, will cost you a couple mill, while volunteering with your local Boy Scouts chapter to help the troops earn their “Libor Manipulation” badges will translate to a few extra zeros on payday. Read more »
Breathe easy, friends of Bob Diamond and the guy who wrote “Anything for you, Big Boy,” as a response to the request, “Can you manipulate Libor for me today when you’ve got a sec? Thanks a mill.” In this case we speak of Rachael Claire Martin, the ex-Barlcays employee who used customer funds to pay for breast augmentations, dental work, liposuction, drugs, alcohol, shoes, and jewelry, despite initially telling authorities she covered the tricks and treats with money she earned engaging in sex for payment (an excuse anyone else facing questioning for their own alleged misconduct should feel free to test out). Read more »
The regulator didn’t specifically suspect anything re: propensity for manipulating Libor, just a general feeling it couldn’t necessarily trust the guy, which Barclays chairman Marcus Agius conceded was not entirely off base. Read more »
Barclays will take the axe to its controversial tax structuring unit, as the UK lender seeks to clean up its image in the wake of a succession of scandals. The business, which at its peak may have generated as much as three-quarters of profits at Barclays’ investment banking operation, will be shrunk dramatically as part of the bank’s Project Transform under new chief executive, Antony Jenkins. Barclays’ actions comes as global banks from Goldman Sachs to Deutsche Bank are reviewing their business models in response to new regulations and government enforcement efforts. “We have to take a fresh look to see if there are products and services in which…we no longer deem it appropriate to do business, regardless of financial return,” Rich Ricci, Barclays investment banking chief, said in an address to investors on Monday night… All activities would in future be “screened for reputational impact” as well as profitability, Mr Jenkins said. “Our ability to build a franchise over time depends on our reputation,” he added, admitting the bank had made some “serious mistakes” in recent years. [FT via HeidiMoore]
Antony Jenkins said he will outline his plans for Barclays in the first quarter of next year. “The challenges that confront investment banking as an industry are driven by regulatory change and the economic environment,” the new CEO said by telephone today. “It requires us to think strategically about the direction of investment banking.” The investment bank is led by Rich Ricci, a Diamond appointee. With increased regulation from Europe and the U.K., volatile market conditions for mergers and acquisitions and continuing criticism of bankers’ pay by politicians, Barclays has faced calls from analysts and shareholders to either sell the division or reduce its size. “The Barclays Capital decade and Bob Diamond will be confined to history,” said Simon Maughan, a financial industry strategist at Olivetree Securities in London. “What investors want to see is far more dramatic cost cutting, and the question is will Jenkins be enough of his own man to do it. It’s not Barclays’s style.” [Bloomberg]
Only in that senior people the bank worked hard to recruit are quitting en masse. Otherwise, it’s great. Read more »
One of Mr. Walker’s top priorities will be reforming the bank’s image. He was known recently for his “Walker review” on bank governance, commissioned by the U.K. government in the wake of the financial crisis. In the report, Mr. Walker called for increased time commitments and financial-industry experience from nonexecutive directors. He has also called for banks to rein in fat pay packages, and is expected to examine compensation practices at Barclays. That could potentially mean the generous sums that were doled out to Mr. Diamond and other senior bankers there will be history. [WSJ]
The juniorest of mistmakers have received their numbers (and a little perspective). Read more »