Continue reading Abu Dhabi wants out of Citigroup purchase

Abu Dhabi wants out of Citigroup purchase originally appeared on BloggingStocks on Wed, 16 Dec 2009 10:30:00 EST. Please see our terms for use of feeds.

The numbers:

Dow 10,501.43 +29.93 (0.29%)
S&P 500 1,114.10 +7.69 (0.70%)
Nasdaq 2,212.10 +21.79 (0.99%)

Continue reading Closing bell: a lot of news and nothing to show for it (XOM, XTO, C)

Closing bell: a lot of news and nothing to show for it (XOM, XTO, C) originally appeared on BloggingStocks on Mon, 14 Dec 2009 16:00:00 EST. Please see our terms for use of feeds.

In a case of buy low, sell high, Kuwait's sovereign wealth fund just unloaded its $4.1 billion stake in Citigroup (C). In doing so, the fund scored a $1 billion profit -- and a 37% rate of return on its investment -- according to the Kuwait Investment Authority (KIA).

The fund invested in Citigroup in January 2008, before the financial industry came to the brink of collapse last year, but well after the impact of the mortgage crisis had been identified. The fund also invested $2 billion in Merrill Lynch, which was acquired by Bank of America (BAC) in September 2008.

Continue reading Kuwaiti fund rakes in $1 billion profit on Citigroup sale

Kuwaiti fund rakes in $1 billion profit on Citigroup sale originally appeared on BloggingStocks on Sun, 06 Dec 2009 14:10:00 EST. Please see our terms for use of feeds.

Advanced Micro Devices Inc. (NYSE: AMD) has been struggling with $5 billion in debt, operating losses and frightening competition from larger rival Intel (NASDAQ: INTC). For the last year, it has looked like the company might not stay independent.

Now, it has fashioned it own rescue package and it appears that it will work, perhaps extraordinarily well.

AMD will spin off its capital intensive manufacturing operation and become a chip design operation. According to the FT, "AMD plans to create a new enterprise, initially called The Foundry Company, with Abu Dhabi's Advanced Technology Investment Company (ATIC)." The new venture would have capital to expand it plants

ATIC would make new investments in the operation of as much as $6 billion and part of AMD's huge debt would be passed off to the new entity

Former AMD CEO Hector Ruiz, who nearly ruined his company, will get to be chairman of The Foundry Company. It is hard to imagine how he talked AMD and Abu Dhabi investment executives into that. His incompetence has been almost without boundaries.

AMD's investors, who have been crushed by management's actions for over two years can ask a very good question. "What took so long?" AMD has been talking about getting out of the manufacturing business for over two years. In early 2006, AMD traded near $40. Now it is just above $4.

It was an ugly show and shareholders have had a front row seat.

Douglas A. McIntyre is an editor at 247wallst.com.

AMD to spin off manufacturing -- finally, it gets a brain originally appeared on BloggingStocks on Tue, 07 Oct 2008 08:50:00 EST. Please see our terms for use of feeds.

Bloomberg News reports that General Electric Co. (NYSE: GE) has cut a deal with Mubadala Development Co., a fund owned by the government of Abu Dhabi, which will yield $8 billion in capital to invest in financial services assets in the Middle East. Mubadala also plans to become one of the 10 biggest investors in GE stock through open market purchases. Depending on which assets they buy, this could be good news for long-suffering GE shareholders.

Bloomberg reports that GE and Mubadala will each contribute "$4 billion in equity over three years to the fund, aiming to reach $40 billion in assets." But today's partnership is more modest. Bloomberg reports that GE will also invest "$50 million in Masdar's Clean Tech fund, while Mubadala will invest $200 million in GE Industrial Investment Partners, a new program to provide development money to health-care, energy and transportation industries."

The benefit for shareholders will be longer term, if at all. That's because GE did not change its forecast for 2008 as a result of the announcement -- in April GE CEO Jeff Immelt predicted earnings may rise "zero to 5 percent, to $2.20 to $2.30 a share in 2008." At this point, it looks like GE's biggest earnings growth opportunity is in the oil rich regions of the world and those developing nations, like China and India, where that oil is being consumed.

Today's deal looks like it will increase GE's exposure to these opportunities.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns GE shares.

GE to form $8 billion investment fund with Abu Dhabi originally appeared on BloggingStocks on Tue, 22 Jul 2008 12:56:00 EST. Please see our terms for use of feeds.

Citigroup (NYSE: C) may need more cash. The head of Dubai International Capital told Reuters that it would take "a lot more money" to rescue Citigroup following investments from Abu Dhabi, Kuwait and Saudi Arabia's Prince Alwaleed.

The statement has the benefit of probably being true. Citi is almost certainly faced with more subprime losses and its derivative holdings of credit cards and munis plus LBO paper could lead the bank to have to write-off billions more in losses from these.

The question is where will the big bank go. Sovereign funds may not have an appetite for putting up more capital. US private equity firms may find the deal too risky. Things may get bad enough that the Fed will have to step in and give Citi a huge loan to keep its balance sheet solid enough for the bank to remain solvent.

The "a lot more money" may come from taxpayers.

Douglas A. McIntyre is an editor at 247wallst.com

Citigroup (C) may need more money originally appeared on BloggingStocks on Tue, 04 Mar 2008 08:13:00 EST. Please see our terms for use of feeds.

Advanced Micro Devices (NYSE: AMD) closed at $6.34 Friday.

Dell (NASDAQ: DELL) said it has stopped selling most consumer systems that use AMD chips on its web site.

Goldman says: "We do not believe AMD's equity is fully reflecting the risk of an AMD bankruptcy."

Abu Dhabi purchased a $622 million dollar stake in AMD on November 16th, 2007.

AMD March option implied volatility of 79 is above its 26-week average of 60 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Option update: Advanced Micro Devices (AMD) volatility elevated as shares near five-year lows originally appeared on BloggingStocks on Mon, 11 Feb 2008 09:25:00 EST. Please see our terms for use of feeds.

It seems that people don't like the idea of sovereign funds owning big pieces of US banks. According to the FT, "over half of the 1,000 people polled by the market research group Strategy One said they 'trusted Citigroup (NYSE: C) less' after its recent decision to tap Middle Eastern and Asian sovereign funds to ease its financial constraints." The number for Merrill Lynch (NYSE:MER) was nearly as high.

The reaction is not against the banks taking the money, but that it came from overseas. That means that while these sovereign investments may have saved the institutions, they could affect that way that customers deal with them. That is, of course, almost impossible to put a number on.

U.S. consumers and businesses will have to get used to a lot more money coming from outside the US to help firms here, especially those in the financial industry. At the end of the day, Merrill and Citigroup probably don't care if their images are dinged if they can keep doing business.

Of course, Merrill could just move its headquarters to Beijing and Citigroup can head to Abu Dhabi.

Douglas A. McIntyre is an editor at 247wallst.com.

Sovereign investments hurt Merrill Lynch and Citigroup's image originally appeared on BloggingStocks on Tue, 22 Jan 2008 10:40:00 EST. Please see our terms for use of feeds.

Shares of were trading near record highs when ConocoPhillips (NYSE: COP) started off the new year by announcing that it expected fourth quarter production results to exceed those of the third quarter. But it was good news/bad news for the company this past week.

The good news: The Wall Steet Journal reported that Conoco was now the front-runner to participate in a multiyear, $10 billion project to develop the Shah natural-gas field in Abu Dhabi, beating out such rivals as Occidental Petroleum (NYSE: OXY) and Royal Dutch Shell (NYSE: RDS.A). Abu Dhabi National Oil Co. had been expected to name a partner for the project last year, and oil companies have become frustrated by the delays. Abu Dhabi is trying to meet rising demand for natural gas, which has surged with the building of gas-fired power stations and desalination plants.

The bad news: The company's donation of $5 million to a local cancer center apparently did not impress Alaska state officials sufficiently to allow Conoco to go forward with its nonconforming proposal for a natural gas pipeline project in that state's North Slope. Conoco's proposal had requested that state taxes be fixed on the project for decades, which prompted Governor Sarah Palin to send Conoco a rejection letter. The rejection left TransCanada Corp. (NYSE: TRP) as the sole finalist for the project.

Conoco shares have fallen 5.96% since the beginning of the year, and closed Friday at $83.04.

ConocoPhillips: Good news in Abu Dhabi, bad news in Alaska originally appeared on BloggingStocks on Sat, 12 Jan 2008 17:10:00 EST. Please see our terms for use of feeds.

An interesting article over at TheStreet.com reports that commercial real estate investment firm, Blumberg Capital Partners, is readying to launch an investment firm, backed by Middle Eastern investors, to invest in U.S. media companies.

TheStreet.com reports that "the fund would target newspapers, as well as Hollywood movie studios, online media outfits, broadcast news, and possibly radio businesses." According to CEO Philip Blumberg, it appears that the fund would raise about $500 million and with the use of leverage, have purchasing power of three times that amount.

I've noticed recently that even indefatigable Jim Cramer has wondered out loud (as he frequently does) why foreign investors haven't stepped up to the plate to start picking up cheap U.S. companies propelled by high oil prices, a weak dollar, and U.S. companies trading at relatively multi-year cheapness.

We've seen Abu Dhabi recently inject $7.5 billion of capital into Citigroup (NYSE: C), make a 5% investment into Sony (NYSE: SNE), and make a similarly-large investment in the Carlyle Group.

Continue reading After investing in Citigroup, Middle Eastern investors on prowl for more

After investing in Citigroup, Middle Eastern investors on prowl for more originally appeared on BloggingStocks on Sun, 02 Dec 2007 10:10:00 EST. Please see our terms for use of feeds.

Will Ben Bernanke be Santa or the Grinch? originally appeared on BloggingStocks on Tue, 27 Nov 2007 17:20:00 EST. Please see our terms for use of feeds.

Citigroup gets $7.5 billion investment from Abu Dhabi originally appeared on BloggingStocks on Mon, 26 Nov 2007 22:30:00 EST. Please see our terms for use of feeds.

With Blackstone Group LLC (NYSE: BX) already public and KKR on its way to the NYSE exchange, there is lots of chatter about the next candidates. Well, according to a recent report in the Wall Street Journal [a paid service], it looks like Apollo Management may be trading soon.

Interestingly enough, the firm's founder -- Leon Black -- took a trip to Abu Dhabi. Yes, there's a ton of money there and I'm sure some eager investors who would want to be a part of Apollo. Although, it looks like there are some issues on valuation.

An investment from Abu Dhabi would likely mean a boost for Apollo's efforts in emerging markets. As the dealmaking gets crowded in the U.S. and Europe, private equity needs to find new frontiers of opportunity.

So, with a slug of capital from Abu Dhabi, Apollo might then file for an IPO and get even more money from U.S. public investors.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Apollo of Arabia originally appeared on BloggingStocks on Sun, 08 Jul 2007 10:10:00 EST. Please see our terms for use of feeds.