BHP Billiton to pay out $10 bln, CEO to step down (Reuters)
Because it's not traded on a US exchange, BHP Biliton may be the most important raw materials company you've never heard of. The miner of iron ore, among other other things, has had a great run, positioning itself perfectly over the last several years. In a surprise announcement, its CEO Chip Goodyear announced his resignation, a move that typically would cause a blow to the shares. But in some fortuitous timing, the company announced that it would be spending $10 billion on buybacks over the coming years, which is getting shareholders excited.
Cisco Shares Rise as Sales Forecast Beats Estimates (Bloomberg)
The Cisco kid is back baby. All that YouTubin', movie downloading and voice-over-ip that everybody's doing is boosting demand for raw gear. Somebody's gotta build the pipes that takes the mentos video from Google HQ to you. Revenue grew sharply in its recent quarter, and it expects 20% growth in the coming quarter. Nobody in tech, particularly not old tech like Cisco, is growing at this space. Unlike, BHP Biliton, Cisco won't be doling out its cash to the shareholders -- expect it to make tons of acquisitions going forward, just as it's always done when times are good.
Oil Above $59 as Cold Bites, OPEC Cuts Supply (Reuters)
The nice thing about this job is that you never have to go outside. But from news reports we've read, we understand it's quite cold, or something like that. Hmm, that must not be fun for the people who've been delivering our lunch every day this week. And if you believe that the weather can change the energy picture in just a matter of days, then it's this cold that's responsible for sending oil to $59 barrel once again, erasing all of the progress made over the past few months, and emboldening guys like Hugo Chavez.
Jobs assails music labels (San Jose Mercury News)
Apple's been increasingly coming under pressure from the like of the EU to "open up" its iTunes music store, and allow the iPod to play tracks bought from other non-iTunes services. What the EU doesn't really realize is that it's not Apple's call, and that this situation is something demanded by the record labels. So yesterday, Steve Jobs got on his bully pulpit and said that file protection on digital tracks is dumb, that it doesn't work, and that since the vast majority of music is sold on unprotected CDs, then there's no chance that it could actually reduce piracy. It's not clear if anyone will listen, particularly at the record labels, but maybe it'll get Norway and its ilk to lay off.
Samsung settles DRAM price-fixing lawsuit (The Register)
Memory chip lawsuits are a bit like cigarette lawsuits. As soon as one is over, somebody else wants to sue. Got your DRAM troubles behind you? Here comes an SRAM lawsuit. Got your federal criminal trials out of the way, here come the states attorneys general, looking for their slice. Samsung, which has been involved in case after case -- along with the rest of its Korean cohort -- has settled a DRAM price-fixing case brought by 41 states. The company only had to dole out $41 million, and agree to help pursue legal action against others, like Hynix and Elpida.
Moody's Profit Rises, Aided by Asset-Backed Debt, Building Sale (Bloomberg)
Sometimes last year, Jim Cramer got all red in the face, and yelled at the camera, telling viewers to go out and buy shares of Moody's. He said the best way to profit from all the debt in the world was to invest in the company that rated it. And, per one of his favorite investment themes, he noted that it's part of a virtual duopoly (along with Standard & Poors), ensuring it high margins for quite some time. Even though everyone's known about the high barriers to entry in this business for some time (hint: it's federally regulated), it appears that Cramer was right on this count. The stock finished 2006 quite strongly, and is looking for an encore in 2007. The company's fourth quarter earnings were up smartly, and it anticipates more good times ahead. Caveat emptor: the government is looking to lower the barriers to entry in this space, and if they do, the gravy train must one day reach its terminus.
Foreclosure Heatmap (The Big Picture)
One of the things we'd really like to find, if its out there, is a state-based stock index. So, for example, you could see how all of the companies headquartered in Illinois did compared to the companies headquartered in Texas, for example. For many states, it'd probably be mainly regional banks, but it'd still be interesting. Barry Ritholtz passes along a foreclosure "heatmap", which shows the states that have high per-capita foreclosure rates. High on the list are states like Florida, Colorado, Texas, Nevada and California, while low on the list are Maine, Vermont and New Hampshire. So, basically, in places where housing's been super hot, there are a lot of people who can no longer afford their dwellings.
MySpace's Pact With Google Hits a Snag (WSJ)
That big $900 million deal that MySpace signed with Google... well, they've yet to sign the bottom line, exactly. They're going to, sure, there's $900 million on the line. But MySpace is a little worried about the language. It wants to get in bed with Google, but it doesn't exactly want to be monogamous, something that should play well with the MySpace crowd. Specifically, it wants to leave room open for it to sign a deal with eBay for "peer commerce", some arrangement to fuse eBay's underlying technology with MySpace, so that users could sell things to each other. Google and eBay won't admit that they're rivals but they are, and so neither side is likely to budge an inch if it means favoring each other. And poor old MySpace is just stuck in the middle.