Continue reading Closing Bell: Health Care Doesn't Kill the Bulls (C, SOMX, NOVL, PALM, T, AIG, NBG)

Closing Bell: Health Care Doesn't Kill the Bulls (C, SOMX, NOVL, PALM, T, AIG, NBG) originally appeared on BloggingStocks on Mon, 22 Mar 2010 16:20:00 EST. Please see our terms for use of feeds.

Reportedly, former American International Group (AIG) lead man Maurice Greenberg (called "Hank" by most and the "Gangster of Love" by yours truly) has agreed to a staged sale of his AIG shares to UBS (UBS).

On Friday, Starr International (Greenberg's investment vehicle) issued a filing with the SEC stating that it will sell as many as 10 million shares of Greenberg's former firm in four blocks of 2.5 million shares. The price tag for the deal comes in at $278 million. The way the deal is structured is known as a variable prepaid forward sale.

Continue reading Maurice Greenberg Sells AIG Shares to UBS

Maurice Greenberg Sells AIG Shares to UBS originally appeared on BloggingStocks on Mon, 22 Mar 2010 11:30:00 EST. Please see our terms for use of feeds.

In what an attorney calls a story of "anger, betrayal and cover-up," we are learning that former American International Group (NYSE: AIG) CEO Maurice "Hank" Greenberg may have taken $4.3 billion in stock from the company in 2005.

This "withdrawal" reportedly occurred shortly after Greenberg was forced out of the company as he was being investigated for accounting irregularities. Attorney Theodore Wells told a jury in Manhattan yesterday that Greenberg "was mad. He was angry," deciding to give the okay to tens of millions of shares being sold from a trust fund shortly after being jettisoned from the company. The fund was put together to provide incentive bonuses to a group of AIG management and employees that they would receive when they retired.

Continue reading AIG contends former CEO stole billions from retirement fund

AIG contends former CEO stole billions from retirement fund originally appeared on BloggingStocks on Tue, 16 Jun 2009 12:40:00 EST. Please see our terms for use of feeds.

Former American International Group (NYSE: AIG) head honcho Hank Greenberg is selling his entire stake in the company -- just under 12.9 million shares -- to Starr International for at least $1.25 per share. The price will be set based on the closing price the day before the sale, but a clause in the deal prevents it from being less than that.

Who is Starr International? Glad you asked. Starr International is a privately held investment vehicle the operates for the benefit of Mr. Greenberg's charitable ventures. The Wall Street Journal reports (subscription required) that "In addition to buying Mr. Greenberg's shares, Starr International would purchase 25.3 million shares in AIG from an entity called the Greenberg Joint Tenancy Co., 10.5 million shares from C.V. Starr & Co., another firm that Mr. Greenberg heads, and other shares from affiliated entities."

Continue reading Hank Greenberg to unload AIG stake

Hank Greenberg to unload AIG stake originally appeared on BloggingStocks on Sat, 02 May 2009 11:40:00 EST. Please see our terms for use of feeds.

Continue reading Madoff, airlines, Wall Street: We don't need no stinkin' regulation!

Madoff, airlines, Wall Street: We don't need no stinkin' regulation! originally appeared on BloggingStocks on Wed, 24 Dec 2008 16:30:00 EST. Please see our terms for use of feeds.

This post is part of our feature on Money Losers of 2008. See all 20.

There's no doubt about it -- times are tough. People are struggling to find work and to pay the bills as the value of their homes and savings dwindle. The poor get poorer, and the rich get richer.

Or do they? It's all relative, of course, but world's billionaires have been taking some big hits too. We take a look at Sheldon Adelson, Kirk Kerkorian, and Lakshmi Mittal in their own separate posts, but here are some other billionaires who have lost billions this year (courtesy of Forbes and Business Sheet).

• Brothers Anil and Mukesh Ambani of India's private conglomerate Reliance lost $32.5 billion and $28.2 billion, respectively.
• Warren Buffett, the Sage of Omaha, lost $16.5 billion. Shares of Berkshire Hathaway Inc. (NYSE: BRK.A) are down about 32% since the beginning of the year.
• Microsoft (NYSE: MSFT) founders Bill Gates and Paul Allen lost $12.3 billion and $2.6 billion, respectively, while CEO Steve Balmer lost $6.5 billion. Shares of Microsoft are down 46% since the beginning of the year.
• Larry Page and Sergey Brin, cofounders of Google Inc. (NYSE: GOOG), lost $11.9 billion and $11.7 billion, respectively, and CEO Eric Schmidt lost $3.8 billion. The share price of Google has fallen 55% since the beginning of the year.
• Larry Ellison, CEO of Oracle Corp. (NASDAQ: ORCL), lost $8.2 billion. Shares of Oracle are down 21% since the beginning of the year.
• Media maven Sumner Redstone lost $7.2 billion. Shares of his private investment firm National Amusements fell 70% this year.

Continue reading Money losers of 2008: Billionaires who lost billions this year

Money losers of 2008: Billionaires who lost billions this year originally appeared on BloggingStocks on Wed, 24 Dec 2008 12:30:00 EST. Please see our terms for use of feeds.

The credit crisis is turned some of the super-rich into the super-poor.

When AIG (NYSE: AIG) was trading for $70 the share former CEO Hank Greenberg and his affiliates had about $20 billion in the stock. Now that number is probably less than $1 billion. AIG now trades around $3.

According to The Wall Street Journal, "Mr. Greenberg said in a Securities and Exchange Commission filing earlier Thursday that he intended to engage in open-market sales of AIG shares for liquidity and other purposes."

Liquidity indeed. The lifestyles of many billionaires includes hundreds of millions of dollars in donations to charities, multiple homes, art collections, and even a private jet. Yesterday former Lehman CEO Dick Fuld began the process of auctioning off his art collection. Being very rich is not what it used to be.

The news about Greenberg and Fuld points to a new wrinkle in the economic crisis. The trouble may not just bring down some of the nation's leading financial companies. It may make some of the country's most wealthy people bankrupt.

Greenberg is in his early 80s. That makes starting all over again pretty tough.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Greenberg to sell AIG shares: The rich become poor originally appeared on BloggingStocks on Fri, 26 Sep 2008 08:45:00 EST. Please see our terms for use of feeds.

Continue reading Cramer on BloggingStocks: The AIG save puts us on better footing

Cramer on BloggingStocks: The AIG save puts us on better footing originally appeared on BloggingStocks on Wed, 17 Sep 2008 08:45:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal's "Smartmoney Stock Screen" looks at eight companies whose valuations make them ripe to buy, and they also may be in the sites of corporate buyers. The big eight include Asbury Automotive Group Inc (NYSE: ABG), Crane Company (NYSE: CR), Scholastic Corporation (NASDAQ: SCHL) and The Scotts Miracle-Gro Company (NYSE: SMG).
• The Wall Street Journal's Walter Mossberg said in the "Personal Technology" column that he cannot recommend Apple Inc's (NASDAQ: AAPL) MobileMe, as it has "too many flaws to keep its promises".
• The Wall Street Journal also speculated that the collapse this week of SemGroup LP, which is the parent of SemGroup Energy Partners LP (NASDAQ: SGLP), may have played a role in the 14% drop in crude oil over the past 10 days.
• In a move that could take advantage of the gap in the financing markets, The Goldman Sachs Group Inc (NYSE: GS) raised $10B to invest in loans backing leveraged buyouts. The fund will reportedly buy senior loans, the Financial Times reported.

• Former American International Group Inc (NYSE: AIG) chief Hank Greenberg is reportedly in settlement talks with New York Attorney General Andrew Cuomo over charges that Greenberg improperly inflated corporate books to show improved profits, the New York Post said.

Newspaper wrap-up: Stocks to buy that might also be taken over originally appeared on BloggingStocks on Thu, 24 Jul 2008 08:35:00 EST. Please see our terms for use of feeds.

I'm not sure how management at Lehman Brothers Holdings Inc. (NYSE: LEH) has time to run the business. What's more, with all the turbulence, I'm wondering if many of the employees are working mostly on parsing rumors and fine-tuning resumes.

Of course, this week Lehman got rid of its CFO, Erin Callan and president, Joseph Gregory. The company also raised $6 billion, which was quite dilutive. So from Monday to Friday, the stock price plunged from $33 to $25.81.

Yet, by Friday, things were perking up. The stock price shot up 13.7%. Maurice "Hank" Greenberg, the, who is the former CEO of AIG (NYSE: AIG), said he bought shares. This was also the case with BlackRock (NYSE: BLK) and Putnam Investments.

But there was something else: Wall Street was abuzz with buyout rumors.

In fact, according to a report from CNBC, it looks like the senior management team of Lehman is meeting this weekend (which is a rare thing). Are they talking to possible suitors? Or, is it to review the figures for Q2? Both?

Despite all this, the fact remains that Lehman's potential suitors are also distressed. So, even if there is a deal, the valuation is likely to be muted.

But there is an interesting scenario: Blackstone Group LLP (NYSE: BX) as a buyer or major investor. The firm is well capitalized and may want an investment banking platform. Moreover, the firm's cofounders -- Stephen Schwarzman (CEO) and Peter Peterson (Senior Chairman) -- were formerly with Lehman (back in the 1980s).

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Blackstone to buy up Lehman? originally appeared on BloggingStocks on Sun, 15 Jun 2008 09:40:00 EST. Please see our terms for use of feeds.

Former AIG head may face SEC charges originally appeared on BloggingStocks on Wed, 21 May 2008 09:20:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal reported that a federal judge said that the government had "sufficient evidence" for a jury to conclude that a conspiracy to fraudulently boost the financials of American International Group Inc (NYSE: AIG) began with former CEO Maurice R. "Hank" Greenberg. That led to a transaction that artificially inflated AIG's loss reserves.
• Citigroup Incorporated's (NYSE: C) Falcon Strategies fixed income hedge fund is down 75%, the Wall Street Journal reported, bad news for the three U.S. banks that invested in it to help increase returns on employee life insurance. One of the banks, Fifth Third Bancorp (NASDAQ: FITB), is suing Transamerica Life and Smith Barney, both of whom helped to arrange the investment, and some are now questioning whether Citigroup will be forced to give back some of the investments as they have with individual investors.
• After it stopped offering some mortgages last month because it was swamped by volumes of new applications, the Financial Times reported that First Direct, a unit of HSBC Holdings Plc (NYSE: HBC), has resumed lending to new customers. The bank said it has continued to receive "significant interest" in its mortgages from existing customers.

• In an effort to raise capital from shareholders, the Telegraph reported that Barclays Plc (NYSE: BCS) is considering a takeover bid for a rival in the U.S. or UK. Sources believe Barclays may attempt to acquire an investment bank, a struggling bank or a deal in a fast-moving economy. Potential names mentioned include UBS AG (NYSE: UBS) and Lehman Brothers Holdings Inc (NYSE: LEH).

Newspaper wrap-up: Citigroup may have to repay some hedge fund losses originally appeared on BloggingStocks on Tue, 20 May 2008 08:00:00 EST. Please see our terms for use of feeds.

Hank Greenberg, the former CEO of AIG (NYSE: AIG), built the company from a modest insurance firm to one of the largest financial services businesses in the world. Then, Eliot Spitzer went after him and Greenberg was forced out. He has been trying to get back in ever since.

Through his own holdings and those of a foundation he controls, Greenberg has enough shares to make trouble for AIG, and now he may have cause. The company lost $7.8 billion in the last quarter. Greenberg insists that if he had been in charge, none of that would have happened.

According to The Wall Street Journal, Greenberg has "upped the pressure on current management in a sharply worded letter that said 'AIG is in crisis' and called on directors to postpone Wednesday's annual meeting."

Greenberg's view is somewhat convenient. The company started selling derivatives when he was still there. His attack on management assumes that he could have escaped the problems that have hit almost every major financial company in the US and Europe.

Greenberg dreams that things would have been different if he had stayed as CEO, but it is only a dream that he cannot support with any reality.

Douglas A. McIntyre is an editor at 247wallst.com and the author of the Ten Stocks Under $10 letter.

AIG's former CEO tries to get another foot in the door originally appeared on BloggingStocks on Tue, 13 May 2008 08:40:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• Lockheed Martin Corporation (NYSE: LMT) is expected to beat out The Boeing Company (NYSE: BA) for an approximate $1.8B contract to from the U.S. Air Force to build a new generation of navigation satellites, the Wall Street Journal reported.
• According to the Wall Street Journal, former American International Group Inc (NYSE: AIG) CEO Maurice R. "Hank" Greenberg is pressing the troubled insurer to turn the company around. He says that he and other major shareholders have "deep concern about the persistent and seemingly endless destruction of value at AIG."
• Hybrid Capital Second, a Morgan Stanley (NYSE: MS) investment vehicle, increased its stake in internet start-up Livedoor to 18.15% from 12.76% in March, the Financial Times reported, superseding the company's founder, Takafumi Horie.

• After it incurred $3.2B of bad debts in the first three months of the year, the Telegraph reported that Knight Vinke, an HSBC Holdings Plc (NYSE: HBC) shareholder, has renewed calls for the bank to shed its U.S. consumer finance business.

Newspaper wrap-up: Lockheed expected to win $1.8B contract for navigation satellites originally appeared on BloggingStocks on Tue, 13 May 2008 08:10:00 EST. Please see our terms for use of feeds.

AIG (NYE: AIG) was the most respected insurance firm in the world when it was run by Hank Greenberg. But he is gone, along with the respect.

AIG managed to lose $7.8 billion in the last quarter, an impressive amount even by the standards of current bank and brokerage deficits. According to The Wall Street Journal, "The giant insurer also announced that it would raise $12.5 billion in capital to replenish its balance sheet."

Of course, the reason for the losses was, among other things, investment in instruments based on mortgages.

One odd piece of news that came out of the awful quarter from the insurance firm was that it would raise its dividend. It is hard to imagine where that cash will come from.

The smoke signal sent up by AIG is that the crisis involving US financial firms is not over. AIG did not say that the future was bright and the sun was coming out from behind dark clouds. Pessimism was the emotion of the day.

Watch for more big losses from banks and brokerage in the second quarter. AIG is a canary in a coal mine.

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

AIG: How to lose $7.8 billion originally appeared on BloggingStocks on Fri, 09 May 2008 03:56:00 EST. Please see our terms for use of feeds.

Continue reading Cramer on BloggingStocks: Spitzer's men couldn't put it back together again

Cramer on BloggingStocks: Spitzer's men couldn't put it back together again originally appeared on BloggingStocks on Tue, 12 Feb 2008 08:35:00 EST. Please see our terms for use of feeds.

Hank Greenberg is an old man now. His stated age is 82, but he must be closer to 90. He was the CEO of American International Group (NYSE: AIG) from 1967 until 2005. He was pushed out because of an accounting scandal and federal prosecutors are still looking into that.

But Greenberg does not want to take his hundreds of millions of dollars and retire. In a filing with the SEC yesterday he was pushing for "strategic changes" at the big insurance company and perhaps the spin-off of some businesses. Through various funds and foundations, Greenberg controls over 13% of AIG's shares and the filing with the government states that he "believes that there are opportunities to significantly improve [AIG's] performance and strategic direction, as well as the value of their investment." The Wall Street Journal writes that (subscription required) Greenberg and the funds he controls "anticipate holding discussions with stockholders and third parties that may address a number of issues," including whether to spin off some operations, and "concerns over the direction and management of [AIG] generally."

In his desire to exert some control over his old company, Greenberg may get himself into more hot water. AIG has already filed a suit against him for damaging the company. Lashing out at AIG will clearly make the government look harder at its case against him. Prosecutors certainly don't want more headlines about the fight between the man who made AIG and the company itself. The government would not want it to appear that they aren't addressing problems at AIG in a timely fashion.

Greenberg does have at least one leg to stand on. AIG shares are down over 10% in the last two years while the S&P is up almost 30% If the old man can get the company's board to take action by raising its dividend or buying back shares, it might drive the stock back up.

Greenberg. Old but not yet infirm.

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

Long-time CEO back to rattle AIG's cage originally appeared on BloggingStocks on Sat, 03 Nov 2007 09:41:00 EST. Please see our terms for use of feeds.

AIG (NYSE: AIG) is recently down $0.56 to $63.28. Smith Barney says, "AIG has yet to provide investors with an earnings release date for 3Q '07 results. In the wake of the subprime meltdown, investors are eager to asses the fate of AIG's $29 billion of subprime mortgage exposure and its credit guaranty business." AIG call option volume of 13,468 contracts compares to put volume of 36,042 contracts. AIG November option implied volatility of 44 is above a level of 33 from last night and above its 26-week average of 22 according to Track Data, suggest larger near term risk.

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

Option update 10-25-07: AIG puts up on subprime concern originally appeared on BloggingStocks on Thu, 25 Oct 2007 13:27:00 EST. Please see our terms for use of feeds.

There are two kinds of CEOs: innovators -- who come up with growth ideas -- and janitors -- who cut costs and instill discipline. There are times when it's best to invest in an innovator, and others when a janitor generates superior shareholder returns. What does this mean for stocks? Potential buys include Boeing Co. (NYSE: BA), Google, Inc. (NASDAQ: GOOG), and American International Group, Inc. (NYSE: AIG), and potential holds include Hewlett-Packard Co. (NASDAQ: HPQ), Microsoft Corp. (NASDAQ: MSFT), and Apple, Inc. (NASDAQ: AAPL).

This thought came to mind after reading an excerpt from the Wall Street Journal's Alan Murray's new book -- Revolt in the Boardroom: The New Rules of Power in Corporate America. It's a measure of his clout that he got the front page [subscription required] -- albeit of the Saturday edition. Murray's argument is that "boring" CEOs are now on the rise "in the wake of ... Enron" (a hackneyed expression that should be banned from the journalistic lexicon).

Following journalistic convention, Murray extrapolates a trend from three cases. He argues that boards have appointed "boring" CEOs -- I call them janitors since they are the executive equivalent of a clean up crew that comes in after a rock concert -- to avoid their predecessors' scandals. He cites the "boring" examples of Jim McNerney at Boeing, Martin Sullivan at AIG, and Mark Hurd at HP. They can boost the stock price for a while by cutting excess cost and instilling process discipline.

But they often fall down when it comes to generating revenue growth ideas. This is where investors can benefit from an innovator CEO -- the archetype of which is Apple's Steve Jobs. For investors there are two problems with such innovators:

Continue reading What kind of CEO should you invest in -- innovator or janitor?

What kind of CEO should you invest in -- innovator or janitor? originally appeared on BloggingStocks on Sat, 05 May 2007 11:10:00 EST. Please see our terms for use of feeds.

Ben Berkowitz is the business news editor for AOL. His weekly column looks at news stories with long-term significance that were initially overlooked.

The story you didn't read this week but should have is the almost off-handed way that super-billionaire Sam Zell said he'd perhaps like to buy Tribune Co. (NYSE: TRB). And if that wasn't enough, now everyone's favorite even-bigger billionaire Warren Buffett is said to be snapping up shares of the New York Times Co. (NYSE: NYT).

These titans of industry understand something that even the Internet has not changed: owning a newspaper is both a mark of prestige and an easy way to have a very loud voice. Anyone who thinks their motives are altruistic has perhaps been sniffing too much newsprint.

Sam Zell is a real-estate baron. What on earth would he do with a newspaper chain? (Yes, Trib also owns the Cubs, and some TV stations, and a few other properties, but the same question applies. There are easier ways to own a baseball team.)

Keep asking: why does housing developer and art patron Eli Broad want the Los Angeles Times? Or supermarket magnate Ron Burkle? Why would insurance heavyweight Hank Greenberg want the New York Times? Why does Jack Welch want the Boston Globe? Hint: remember the rumors about Welch trying to steer election coverage in various NBC newsrooms in 2000.

Simple: they want to control mainstream media outlets to push their agendas. Broad has a vision for changing the future of Los Angeles. Burkle is a big Democratic supporter. Greenberg has been abused mercilessly in the press for the financial doings at AIG. Welch's wife is a journalist.

The motives for Zell and Buffett are less clear; maybe Zell wants to take a crack at Trib for the sake of it? Great businessmen love challenges. And Buffett, well, just do what the man says. He buys it, you buy it. Really, he didn't get rich on his looks or fashion sense.

Continue reading The Story You Didn't Read: Moguls go newspaper crazy

The Story You Didn't Read: Moguls go newspaper crazy originally appeared on BloggingStocks on Fri, 09 Feb 2007 15:44:00 EST. Please see our terms for use of feeds.