Skip to main content

Opening Bell: 3.31.08

Lehman Sues Japan Firm, Claiming $350 Million Fraud (WSJ)
There's a million ways to lose money. Here's one of the more interesting ones we've been paying attention to. Lehman claims that employees of a Japanese firm fraudulently bilked Lehman out of $350 million. Their method of action: using official company documentation to suggest that it was behind a hospital refurbishment funding project. Turns out the Japanese company Marubeni Corp had no idea about it. So now Lehman is suing for its cash back. Whether they get it back or not, you have to figure that Lehman's counterparty (so to speak) in this fraud, must've had a damn good idea about how this whole process works to pull something like this off.
Citizen Huff (NYT)
The redhot Huffington Post continues to make the media rounds, jumping form the New Yorker to the New York Times for its latest glowing profile. Actually, it started even earlier when some (possibly dubious) numbers came out that the site was bigger than Drudge. It helps that it's election season and there's an added hook to write about a politically-oriented site. But really. Financially, the site expects revenues between $6-$10 million this year, on what sounds like breakeven profits. Oh, and they found some guy to say it was worth $200 million.
Aloha Airlines Halting Passenger Service (AP)
We've long been in the "more bankruptcies" camp when it comes to airlines, hoping that they'll lead to more gates/opportunities for interesting upstarts. That being said, seeing as we're not too big on the intra-Hawaii island-hopping scene, it's hard to get real excited about the end of Aloha Airlines. After 60 years, the company recently declared bankruptcy, and now it's shutting down operations for good.
HUD Secretary Expected to Quit (WSJ)
There's something about HUD secretaries. Always seemingly getting up to no good. Yesterday we couldn't have named our current one, but today we know his name is Alphonso Jackson and he's expected to quit amidst some vague allegations of wrongdoing. The Journal describes this as a blow to Bush's attempt to fix the housing mess. Eh, somehow we doubt that this position isn't so crucial to the situation.
UBS Falls After Reports It May Have to Raise Capital (Bloomberg)
Having already raised about $13 billion earlier this year, UBS may have to double dip in the guacamole. As it gets set to report another wave of writedowns, analysts say it will have to go back and raise more money, possibly as much as another $15 billion. Overnight, shares fell around 4 percent on the report.

Mugabe May Face Election Defeat; MDC Claims Victory (Bloomberg)
We're skeptical.
Ben Stein Watch: March 30, 2008 (Market Movers)
Felix Salmon is back after decamping to Marfa, TX and possibly elsewhere in the Lone Star State. By the way: screw Memphis State. Anyway, always nice to come back with a classic, a nice takedown of Ben Stein. Really, we can't get enough of these. This time Stein is talking about poverty, an issue on which he's acutely ignoran. Bottom line: "Stein is becoming a sick and unfunny joke at this point, and the NYT, by association, is the butt of that joke."
IAC's Diller wins court battle with Liberty (Reuters)
It happened Friday night, so you probably know all about it. But Barry Diller prevailed over his benefactor John Malone in court and will be allowed to split IAC into five different companies, all with a single tier voting structure. Essentially it means that John Malone's grip on the companies will be weak, since he won't dominate their boards. If you haven't read through the court transcripts or the judgment, it's not the biggest waste of your time. Whereas some corporate law can get a little bit, well, obtuse. This one felt straightforward by comparison.