Opening Bell: 09.25.14

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Goldman Sachs-Led Group Near Deal to Buy Messaging Startup Perzo (WSJ)
Wall Street firms led by Goldman Sachs Group Inc. are close to a deal to create an instant-messaging service to rival that of Bloomberg LP. A buyout of messaging startup Perzo Inc. could be announced as soon as next week, according to people familiar with the matter. While it could be months before the firms have a product ready for trading desks, the project is gaining momentum, the people say. The number of banks and money managers working with Goldman on the purchase has swelled to 14 in recent weeks, as Wall Street's search for an alternative to the data and media giant's chat services turns rivals into allies. Banks and money managers have long relied on Bloomberg terminals to keep their employees up to speed on market moves and to help them communicate with one another electronically. But increasingly they have griped about the $20,000-a-year price tag that Bloomberg charges for each terminal, and the data company's refusal to sell many services on an a la carte basis.

JPMorgan tops investment bank league table in first half (Reuters)
JPMorgan was the top performing investment bank in the first half of the year, making $11.5 billion in revenue and ranking first for both its fixed income and deals advisory businesses, data showed on Thursday. The U.S. bank ranked ahead of Goldman Sachs and Deutsche Bank, who shared second place, according to industry analytics firm Coalition. They were followed by Bank of America Merrill Lynch and Citi, then Morgan Stanley in sixth, Credit Suisse seventh, Barclays eighth, UBS ninth and then BNP Paribas.

Lucarelli pleads guilty to insider trading (NYP, earlier re: attire)
Lucarelli, the cocaine-addled former Wall Street executive, pleaded guilty Wednesday to using inside information to pocket nearly $1 million in fraudulent profits. The former investor-relations honcho, on his 52nd birthday, admitted using advance knowledge of clients’ upcoming quarterly results to profitably trade in those stocks. Lucarelli made more than the usual ripple of news caused by common white-collar crooks because after his initial appearance in Manhattan federal court in August, he was seen on video running away from reporters in his sweatpants and a tanktop. He must have been late for a very important meeting that afternoon, because he ran right out of his flip-flops and continued east down Pearl Street barefoot — barely missing a beat.

Griesa to decide whether Argentina’s in contempt of court (NYP)
Federal judge Thomas Griesa has agreed to hold a hearing Friday to decide whether to find the country in contempt for passing a law to allow bondholders to swap their bonds into local Argentine law bonds to avoid paying a small group of so-called holdout creditors, including Singer, some $1.6 billion. The hearing was requested by the holdout group, which has proposed sanctions of $50,000 a day and attorney’s fees, which at this point probably are in the tens of millions of dollars. Most Argentine bondholders did not get the $539 million in interest payments due in June because Argentina refused to follow the court’s order that the country pay the holdouts at the same time they paid the others. The case stems from Argentina’s debt default in 2001. After the default, 93 percent of the bondholders agreed to exchange their debt for bonds with a 70 percent haircut, while a few hedge funds held out for the full 100 percent. On Friday Argentina will have to show why it should not be held in contempt for violating the US federal court orders.

Teacher Resigns After Allegedly Talking Of Robots Killing Misbehaving Students (AP)
U-T San Diego reported Tuesday that Tuyet-Mai Thi Vo was allowed to resign last year and receive a $92,000 settlement instead of being fired. Oceanside Unified School District officials investigated complaints that Vo said in 2012 that if robots were teachers, she would program them to shoot students when they misbehaved. The district report says the 48-year-old told her class she would program robots to kill all of the students. The teacher maintains the allegations are untrue, and she has a positive recommendation letter from then-Superintendent Larry Perondi to vouch for her ongoing fitness for the classroom.

Hedge Funds Get Jostled by Inversions' Jiggles (WSJ)
Hedge funds Paulson & Co., Magnetar Financial LLC and Elliott Management Corp. are among eight firms that have together snapped up more than $8 billion of Shire stock, or about 17% of the Dublin pharmaceutical company, anticipating a big payoff if its $54 billion purchase by AbbVie Inc. is completed. The collective bet is one of the biggest wagers on a deal in recent memory, some hedge-fund managers said. But the Obama administration's announcement this week of measures to discourage so-called inversion deals such as AbbVie's—in which U.S. companies buy offshore competitors and redomicile overseas, avoiding higher U.S. taxes as a result—has thrown the outcome of this deal and others into doubt. AbbVie plans to move its home for tax purposes to Ireland.

Harvard Picks Insider to Run $36.4 Billion Endowment (Bloomberg)
Blyth, 46, is an eight-year veteran of Harvard Management Co., which runs the largest college endowment. He was hired from Deutsche Bank AG for his bond-trading acumen and rose through the ranks. A statistician with a doctorate from Harvard, he is known for his commitment to the university, teaching classes, serving on faculty committees and advising a cricket team.

Loosened Rules for Startups Also Benefit Older Companies (WSJ)
Salon Media Group Inc., a 19-year-old financially struggling Internet media company, and Giggles N Hugs Inc., a seven-year-old food-and-play-space chain, are among dozens of publicly traded firms that have indicated they intend to solicit investors using the new freedoms in the JOBS Act. Both trade on the over-the-counter market, and auditors have raised concerns about their ability to continue operations. The companies are seeking new investors using a portion of the JOBS Act that lets small private firms advertise to wealthy individuals, known as "accredited investors," modifying an 80-year-old "general solicitation" advertising ban designed to protect investors. The firms' use of marketing freedoms intended for young startups illustrates how an unexpectedly broad range of players hope to gain an edge under the new law. "You can put it into the category of unintended consequences," says New York securities lawyer Douglas Ellenoff, referring to the use of the JOBS Act by publicly traded companies. "The whole point" of the law "was to make it easier for private companies to raise money," he adds.

Larry Ellison Boosts Oracle Credit Line to $9.9 Billion (Bloomberg)
Billionaire Larry Ellison has increased the amount of Oracle Corp. stock pledged against personal indebtedness and lines of credit to $9.9 billion, or 5.6 percent of the market capitalization of the world’s largest database company. Ellison holds 250 million shares of the Redwood City, California-based software maker as collateral, according to the company’s proxy statement released Sept. 23. That compares to 215 million shares last year and 139 million in 2012.

Danish Restaurant Hot Buns Selling Sex Toys With Burgers (HP)
Starting Thursday, Hot Buns is adding dild0s, vibrat0rs, whips and other sex-oriented products to the menu. It's a natural fit, considering the restaurant puts as much emphasis on the tank top and hot pants worn by its all-female staff as it does on the burgers. The restaurant's Instagram page even posts cleavage shots of employees and invites followers to guess which woman it is. Hot Buns owner Mathias Kaer says the sex toys will only be available in evening hours. He believes he's onto something. "On Friday and Saturday nights there are only two things most people want: sex and food. We're combining them both," Kaer said.

Related

Opening Bell: 2.3.16

Argentina attempting to settle with hedge funds; Parmesan bonds; Horse Owner Complains Man Took Prize-Winning Selfie Without 'Consent'; and more.

Opening Bell: 04.22.13

Bill Gross Attacks UK and Euro Zone Austerity (FT) Bill Gross, manager of the world's largest bond fund for Pimco, has launched a stinging attack on efforts by Britain and much of the euro zone to cut debt rapidly with severe austerity measures, warning that such action risks stifling recovery. "The U.K. and almost all of Europe have erred in terms of believing that austerity, fiscal austerity in the short term, is the way to produce real growth. It is not," Mr Gross told the Financial Times. "You've got to spend money." Argentina's New Debt Offer Rejected by Holdout Creditors (WSJ) Holdout creditors on Friday rejected Argentina's proposal to pay them about 20 cents on every U.S. dollar of bonds they own, leaving a U.S. appeals court to decide how to enforce a ruling that may push Argentina into a new default. "Not only are the details of Argentina's proposal unacceptable and unresponsive; Argentina fails even to provide this court with meaningful 'assurances' that it will actually comply with its own proposal," said Theodore Olson, a lawyer for the holdouts, in a brief filed Friday. Argentina's own math values the offer at $210 million, less than 15% of the $1.47 billion that holdouts were owed on their defaulted bonds as of March 1, according to the brief. Hedge Fund Stars Suit Up At Yankee Stadium To Attract Investors (NYP) Hedge-fund mogul Stevie Cohen will be pitching at Yankee Stadium tomorrow. No, the 56-year-old billionaire is not suiting up for the Bronx Bombers — but he will be hoping the magic of the House that Ruth Built will yield some investment cash. Cohen, whose SAC Capital faces a loss of $1.7 billion from investors who want out of his $15 billion hedge fund, is one of about 70 hedge fund managers who’ll be at the Stadium tomorrow making a pitch to prospective new investors at a day-long event sponsored by Goldman Sachs. Singapore Will Replace Switzerland As Wealth Capital (CNBC) Switzerland has $2.8 trillion in assets under management, with $2.1 trillion of that coming from offshore wealth. Switzerland accounts for 34 percent of the $8.15 trillion in total global wealth. Yet the report said Singapore could overtake Switzerland in offshore assets under management by 2020. It said Swiss offshore assets could fall below $2 trillion by 2016, while Singapore's assets could more than quadruple by then. Somali Banking Starts From Ground Up (WSJ) Abdusalam Omer is a central bank governor without much to govern. The Central Bank of Somalia doesn't hold reserves in the country's currency, the shilling. There are no functioning commercial banks in the strife-torn country for it to regulate. The 75-strong staff that still turns up for work after two decades of civil war is a motley crew of money men and handymen. "I don't know why the central bank employs painters," says the 58-year-old who was named the country's top banker in January. Eventbrite Funding Slows Its IPO Chase (WSJ) Eventbrite Inc., an event ticketing company, has raised $60 million from two investors, making it the latest example of a startup to raise significant private late-stage funding that puts off an initial public offering. San Francisco-based Eventbrite had sparked expectations of an imminent IPO when it said earlier this month that it hired a chief financial officer, Mark Rubash, who previously worked at Yahoo Inc. and eBay Inc. Instead, it joins a growing number of companies that have found plentiful funding in the private markets rather than going public at an early stage. The company has raised the new cash from mutual-fund firm T. Rowe Price Group Inc. and Tiger Global Management LLC, an investment-management firm, said Kevin Hartz, co-founder and chief executive. That brings its total private fundraising to some $135 million since its inception in 2006. "This gives us flexibility in setting the timeline for a later IPO, on our schedule," said Mr. Hartz. Deutsche Bank Margin Call on Vik Sparks $2.5 Billion Dispute (Bloomberg) Alexander Vik went to Deutsche Bank AG’s London office in October 2008 to meet account managers who congratulated the Norwegian entrepreneur on how well his Sebastian Holdings Inc. investment fund was doing. Within a month, as global markets tumbled into crisis, the same bankers demanded about $530 million against the fund’s currency bets and began to liquidate its positions. Vik, 58, will argue at a 12-week trial starting in London today that the bank’s actions resulted in losses and missed profits totaling about $2.5 billion. A judge will have to decide whether Sebastian’s calculation of lost trading gains is accurate, said John Day, a lawyer at London-based litigation firm DaySparkes. Zimbabwe Prepares Law to Seize Company Stakes Without Paying (Bloomberg) Zimbabwe’s government is preparing a law that would allow it to seize controlling stakes in companies without compensation, according to a draft of the legislation obtained by Bloomberg News. The law would be an amendment to a 2007 act that compels foreign and white-owned companies such as Rio Tinto Group, Sinosteel Corp. and Impala Platinum Holding Ltd. to sell or cede 51 percent of their shares to black nationalsor state-approved agencies.