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Opening Bell: 7.5.06

In A Close Contest, Kobayashi Claims Sixth Straight Hot Dog Eating Title (NY1)
To some the Fourth of July is about remembering the wisdom of the Declaration of Independence. To others it's just a day off to drink, grill and watch fireworks. But for true liberty-loving folk, at least in New York, it's the date of the annual Nathan's Famous hot dog eating contest. Five-time defending champ Takeru Kobayashi won in record style (53.75 hot dogs in 12 minutes!) this year, edging out American Rookie of the Year Joey Chestnut (52). Why is this story relevant? Because Nathan's Famous shares have been on a tear of late and much of the success is owed to the fact that Takeru Kobayashi has become a household name. There's a good chance, though, that you didn't even realize that Nathan's was public, which itself makes it cooler than some other chains with the word papaya in their names. At the moment, no analysts are covering the stock. So if you're a restaurant or food analyst, do us a favor and come out with a rating on it. We promise to write it up.
Smiley Face Is Serious to Company (NYT)
And here we thought that Forrest Gump had invented the smiley face. It turns out a French company, appropriately named SmileyWorld, is suing Wal-Mart for using the smiley face logo in conjunction with its own brand. SmileyWorld had made millions by registering the image in many different countries, though they've yet to penetrate the lucrative US smiley market. While Wal-Mart has the money to defend themselves in court, imagine if the St. Marks novelty t-shirt markers had to represent themselves in court. The good news, for you, is that the company makes no claim over smileys uses in IM conversations; admit it, you use them when you're feeling inarticulate. Though honestly, we wouldn't mind if there were an injunction against that use.
Testing the Efficiency of Markets in the 2002 World Cup (MoneyScience)
The Freakonomics guy his turned his attention to soccer once again, after a shaky attempt the first time around. This time they're looking at trading on during World Cup soccer matches. From the abstract, it looks like trading in soccer tends to be efficient, though with some notable inefficiencies, which is about what you'd expect. It's of course trendy to talk about soccer while the World Cup, as it's an easy way to get some attention for what's probably some less than earth shattering research. A few weeks ago there was that Goldman report which suggested that national markets often sagged the day after the country's team was eliminated. Meanwhile there's a story about a hedge fund that trades in the futures of star soccer players in today's Journal. And finally, that economist who tells us that -- surprise -- there's an element of game theory in penalty kicks, has been getting another day in the sun. Expect all this to be over in a few days.
Miller dives into caffeinated drinks with $215 million deal (AP)
How is the Opening Bell ready with a thorough and insightful review of the day's top business stories by 8:30 AM? It helps to have a cold Sparks waiting in the fridge. The alcoholic, highly-caffeinated energy drink is perfect morning grog-busters. In fact, the alcoholic energy drink market is the fastest segment of the energy drink market. Once the beverage markers realized that club kids were mixing Red Bull and Vodka, they realized they could capture the magic in their own cans. So Miller Brewing Co. is buying up Sparks and Steel Reserve, two such drinks. Sparks remains the category killer for good reason. Still, the energy drink business is a fickle one. We haven't seen the Kabbalah drink in our local store for some time. Trying to buy the hot drink, assuming it'll stay as such, is a tough game to play.

CEOs Get Off the Ropes On Executive Pay (WSJ)
Part of the problem with the whole debate about CEO pay is that there's no debate. It's a one-sided affair, as those yelling about CEO pay face no opposition in the media. The CEOs, themselves, have generally been too busy, you know, running their companies, to bother explaining the nuances of tournament theory. But now the CEOs are fighting back in dramatic fashion. For example, they point out that median CEO pay is a better measure than the mean pay, which is often what gets cited in the media. When you look at this, the number is a mere $6.8 million, only 179 times what the average workers makes. Also, by this measure, CEO pay has roughly tracked -- slight lagged, even -- performance of financial markets. We can feel the tide of public opinion shifting already.
GM consolidates top spot in China auto market (China Daily)
Just last week, fresh numbers came out showing that GM and the rest of the American makers were continuing their slide in North America. No surprise there. But perhaps GM can just abandon its home country and move to China, where the company continues to lead the market. The company claims 47% unit sales growth, with 20% growth for the foreseeable future. Yikes, slowing already? It's not clear whether the company sells their units for a loss there, or whether they have any sort of 'Employee Pricing' plan in place. And do they subsidize gas there too?
Conglomerate May Sell Hard Rock Cafe (AP)
Why is it that the Hard Rock Cafe has private equity darling written all over it? The Rank group, based in Greece, is considering a spin-off of the once-hip franchise so that it can focus its effort on the more lucrative gambling market. The Hard Rock Cafe feels more like a punch line than a business, though as long as there are travelers who want a Hard Rock Cafe t-shirt, the restaurants will probably survive. In fact, revenue is up 8% last year at the 120 restaurant chain -- though that number might not account for new openings. Considering the high valuations on some US restaurants, some analysts expect the company to fetch a high price for the chain.
Auto Dealers Overflow With Job Openings (AP)
Given all the uncertainty in the auto industry, we'd been wondering about the health of the dealerships. Turns out, on the whole, they're aggressively looking for people to fill tens of thousands of vacancies around the country. Now this could just be a press release disguised as an AP story -- lots of industries have lots of vacancies at any given time -- or it could be true, that the dealerships are dealing with a labor shortage. This wouldn't be a terribly big surprise; a lot of business leaders from retail to tech continue to insist that finding good labor is a challenge. You might expect that in tech or manufacturing by leaders explaining that they would have loved to hire domestic labor if only they could have found it. But dealerships aren't trying to spin that way. One thing that tipped us off to this situation is the fabulous A&E reality show King of Cars, which depicts the life of Chop, a used car dealer. The dealer-cum-pimp (apparently) had a group of young kids at the dealer, and said he wished he could hire some of the brighter ones, and that when they became of legal working age, they should apply for a job. So maybe they really do need workers.

Kerkorian Motors (WSJ)

The Journal's Paul Ingrassia has a really nice overview of the bombshell from last week, that being Kirk Kerkorian's desire to ally GM with Carlos Ghosn's Nissan and Renault. There are a lot out there who believes that Ghosn has the magic turnaround touch, particularly after his success with Nissan, though there's no guarantee he could pull of the same trick with GM. Obviously the man has his plate full -- running three companies might be a bit much, even for him.