It seems that not a day goes by without some news regarding one of the largest deals Wall Street is following intently these days, InBev's $46 billion hostile takeover bid for Anheuser-Busch Cos Inc. (NYSE: BUD).
Not long ago, Reuters reported that Anheuser-Busch filed a suit Monday against InBev NV, calling the brewer's takeover attempt an "illegal plan and scheme" to acquire Anheuser "at a bargain price."
It isn't surprising the Budweiser maker has filed a suit. Only last week, when A-B officially rejected InBev's $46 billion offer, the latter filed a suit of its own as well as launched a proxy battle, filing a consent solicitation with regulators seeking to replace Anheuser's board. Anheuser's suit seeks an injunction to stop InBev's attempts to replace its board. Anheuser says it wants first to make sure certain alleged false and misleading statements are fixed.
From the lawsuit (pdf file) it seems that some of the misleading statements Anheuser is complaining about have to do with InBev's financing possibilities and its plans for the company once it is taken over. I don't normally read litigation documents, but the language here seems quite strong with allegations even of rumor mongering. Judge for yourself:
There's no question that, at this point, Yahoo! (NASDAQ: YHOO) needs to partner up with some company. I didn't see the logic behind the Microsoft (NASDAQ: MSFT) interest in Yahoo! I thought then -- and still think now -- that Microsoft didn't need a big brand in the Internet portal space. It's doing fine with its own MSN.com, its operating-system monopoly and current portfolio of investments.
However, I see the merit in a deal between Yahoo! and Time Warner (NYSE: TWX). The following article discusses the possibility that Time Warner and Yahoo! are talking about a combination. Since Time Warner owns AOL, and since AOL has been transforming its business model over the last few years to capture a more advertising revenue, Time Warner would be wise to at least consider the transaction. Leveraging both brands would generate a lot of clout when it comes to advertisers, who would look at the platform as a must-buy to reach the surfing eyeballs.
There would be many other areas of synergy between the two companies and, of course, the potential to cut redundant costs. Or course, the deal would have to make financial sense and who knows if Yahoo! CEO Jerry Yang will be reasonable.
I think we'll be hearing more about Time Warner and Yahoo! in the coming weeks. However, I don't think anyone should place trades in these stocks based on deal speculation. Buy them for other reasons, but not for purposes of gambling on potential headline news.
Disclosure: I don't own any company mentioned; positions can change at any time.
On June 30, 2008, the last PCs with Windows XP were sold (theoretically) and Microsoft (NASDAQ: MSFT) went hard on Vista, its less than celebrated operating system. I was one of the hold outs, opting to buy my laptop with Windows XP last year even though Vista was being touted as the latest and greatest system. Today, I am sure the remaining XP devices are going for a premium.
What does this mean for the future of PC sales? I think there will be some measure of reduced PC sales in the short run just because the economy is already suffering and consumers and businesses are looking to stretch their devalued dollars.
It also means that some people that do not want the burdensome Vista system and all the baggage that goes along with it will be opting for Apple (NASDAQ: AAPL) Macs. There are many people like me who have been weighing the switch to a Mac for a while. The rest of my household has made the switch (4 Macs, 1 PC) and I did consider this prior to my last purchase. I may swing the other way next time.
For other PC users who remain satisfied with XP, they may not only think to stretch their dollars, but try and hang onto their PCs longer until the value proposition for Vista becomes more convincing. I can always add more memory or speed to my existing computer.
I do not know what the trade-off is for Microsoft. It would make money selling the XP system as well as the Vista system. Any slowdown of PC sales or continued movement toward Apple products has to hurt revenue a little?
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money.
Yahoo (NASDAQ: YHOO) is recently up $2.68 to $24.02.
Microsoft (NASDAQ: MSFT) confirmed the interest in restarting talks to acquire some or all of YHOO, but only if the company's board is replaced at next month's annual meeting.
YHOO call option volume of 180,120 contracts compares to put volume of 71,616 contracts. YHOO July option implied volatility of 68 is above its 26-week average of 43 according to Track Data, indicating larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
This past holiday weekend my colleague Doug McIntyre gave support to a blog I wrote in May 2007 when he posted Google (GOOG): The Failure Of YouTube. In my rant I gave a detailed analysis outlining how Google had overpaid for YouTube by a fantastic amount.
In the story Doug quotes projections that 2008 revenue generated by Google might gross $200 million from YouTube. That's revenue, not profit. A 20% profit would be $40 million if that was possible. In the article I wrote: How can I say Google overpaid for YouTube? I stated the case in plain English why the YouTube investment would have to earn $300 million (net, not gross) minimum, in its first year not to be dillutive.
They missed the target by a mile. They will continue to miss the target and I do not expect it to ever justify the cost. Just because Google has lots of cash slushing around does not mean they have money to waste.
In an open letter to his fellow long-suffering Yahoo shareholders, billionaire Carl Icahn disclosed that he has spoken "frequently" with Microsoft CEO Steve Ballmer; "frequently" over the past week about Yahoo. Ballmer indicated to Icahn that the world's largest software company would still be interested in doing a deal ... with one catch.
"Steve made it abundantly clear that, due to his experiences with Yahoo! during the past several months, he cannot negotiate any transaction with the current board," Icahn said. "If a new board were elected, he would be interested in discussing a major transaction with Yahoo!, such as either a transaction to purchase the "Search" function with large financial guarantees or, in the alternative, purchasing the whole company. He stated that Microsoft would be willing to enter into discussion immediately if the new board that has been nominated were elected."
In a separate press release, Microsoft underscored Icahn's statement, adding that despite speaking with Yahoo!'s board since last year, the company decided that it cannot reach an agreement with the current board. Can you say trial balloon?
The war of words between Yahoo (NASDAQ: YHOO) and dissident shareholder Carl Icahn is intensifying. Last week, Yahoo attached a PowerPoint-style presentation to an SEC filing, bizarrely raising questions about Icahn's track record as a stock picker.
Now Icahn is back with a new letter, issued as a press release titled Icahn Issues Open Letter to Shareholders of Yahoo. Icahn confirmed that he has been in frequent communication with Microsoft (NASDAQ: MSFT) CEO Steve Ballmer over the past week. Icahn wrote that "Steve made it clear to me that if a new board were elected, he would be interested in discussing a major transaction with Yahoo!, such as either a transaction to purchase the "Search" function with large financial guarantees or, in the alternative, purchasing the whole company. He stated that Microsoft would be willing to enter into discussion immediately if the new board that has been nominated were elected."
Lest you think Icahn is blowing smoke, Microsoft followed up with a response to Icahn's statement issued five minutes later, saying, "We confirm, however, that after the shareholder election Microsoft would be interested in discussing with a new board a major transaction with Yahoo!, such as either a transaction to purchase the "Search" function with large financial guarantees or, in the alternative, purchasing the whole company."
This should sway a lot of investors over to Icahn's side in the proxy fight. With its stock having been a weak performer over the past five years, the company is clearly in a position where it needs to be considering strategic alternatives. Microsoft has made it clear that it is not interested in working with the current board on a possible deal and it's in the best interests of shareholders that the company be represented by people who are willing to do what is right for them.
I think we can start the countdown to CEO Jerry Yang's departure to spend more time with his family and charitable endeavors. The market seems to agree, with the stock up nearly 10% MOnday.
Microsoft (NASDAQ: MSFT) wants to expand the reach of its vital Office suite of products. The software giant wants to utilize a subscription model for the collection of programs. The initiative will commence later this month at Circuit City (NYSE: CC) and it will eventually reach other retail stores. People will also eventually have the option of accessing the subscription product via computers such as ones made by Dell (NASDAQ: DELL). The cost is reported to be $70 for twelve months of Office access.
This is an interesting scheme. As the article points out, businesses might not bat an eye at subscribing to software applications, but for consumers, this is a different ballgame. Many of us, myself included, are so used to going down to a Best Buy (NYSE: BBY) to purchase a software package for a flat fee that paying yearly dues just seems like an alien concept. And I'd say this goes double for something as large and complex as the Office program. Microsoft believes that $70 on an annual basis will be perceived as cheap and will expose consumers who might normally either seek upgrades on a pirated basis or who would simply continue using older versions to regular approved updates. It is a large investment, after all, to upgrade to a new iteration of Office.
Microsoft would be wise to market the heck out of the subscription model for Office, taking full advantage of the inflationary environment we are currently in. If potential users can be convinced of the value proposition, then they could eventually become hooked on the promise of upgrades over time for the relatively economical price indicated. Checking around on the net, I notice that a lot of the negative comments about this idea center on the fact that there are already free alternatives out there to Office, such as applications offered by Google (NASDAQ: GOOG).
According to people familiar with the situation, the Wall Street Journal reported that Yahoo! Inc (NASDAQ: YHOO) is again talking to Time Warner Inc (NYSE: TWX), this time about taking over AOL, with Time Warner taking a stake in the combined entity. News Corporation (NYSE: NWS) has its eye on any Yahoo moves. Meanwhile, Microsoft Corporation (NASDAQ: MSFT) is considering what its next move against Yahoo might be and is talking to News Corp.
The Wall Street Journal also reported that, as part of the company's plan to cut costs, Tribune Co's Los Angeles Times newspaper may look to cut about 250 jobs, including about 17% of its news staff.
The Financial Times reported that Chrysler, which has been searching for foreign partnerships, signed with China's Great Wall Motor a memorandum of understanding to explore long-term business ties in areas that include technology, distribution and components.
OTHER PAPERS:
According to the Dallas News, AMR Corporation's (NYSE: AMR) American Airlines informed its flight attendants' union that is may lay off 900 flight attendants on August 31.
WEB SITES:
Yonhap reported that LG Electronics will release "Dare," a new touch-screen mobile phone in the U.S. that will compete with Apple Inc's (NASDAQ: AAPL) latest iPhone models.
Stock futures were mixed early Thursday morning, the last and shortened day of trading this week -- markets will close at 1 p.m. EDT. Oil, again, has reached new highs as investors awaited the ECB decision on interest rate. Wall Street is also anxious about the upcoming jobs report, especially after Wednesday the ADP employment figures were worse than expected. Today's session will likely be choppy.
Despite starting the day on a positive note Wednesday, U.S. stocks ended sharply lower after the ADP employment figures damped mood on the Street. Also, crude oil prices rose sharply and an analyst warned that General Motors (NYSE: GM) may have to consider bankruptcy at some point; GM stock closed below $10 a share. The Dow industrials tumbled 166 points, or 1.46%, entering bear territory -- down over 20%, the Nasdaq Composite lost 53 points, or 2.32%, and the S&P 500, fell 23 points, or 1.82% - the only major index still not in bear territory.
Soon, at 7:45 a.m. EDT, the European Central Bank will announce its decision on interest rates. The ECB is widely expected to increase rates, which in turn could further weaken the dollar, driving oil prices higher.
Then, at 8:30 a.m., the Labor Department will release the June payroll figures. Economists expect the unemployment rate to fall to 5.4% from 5.5% last month, but job losses are expected to rise to 60,000 positions, up from 49,000 in May, according to Briefing.com.
At 10:00 a.m., the June ISM services index will be released, and another decline is expected.
For those of you who own blue-chip stocks, this is an eye-opening prediction. An article at CNBC.com talks about the possibility of Dow 10,000. Dow 10,000!
I repeated that in case you didn't get it the first time. It sounds pretty scary to me, and it should sound pretty scary to a lot of you out there. I'd have to presume that most investors don't use the stock market primarily as a substitute casino for the times when Las Vegas is out of reach. Many of you out there must own a Disney (NYSE: DIS) or a Coca-Cola (NYSE: KO), maybe a General Electric (NYSE: GE) or a Microsoft (NASDAQ: MSFT), something generally considered core and safe for the long-term. I happen to own the first three. Anyone who does is in for some huge volatility if Dow 10,000 comes along.
Actually, whether it comes along or not, volatility is here to stay. And here's the thing about the Dow 10,000 prediction: it isn't so farfetched on a mathematical basis. When you first read that number, you say to yourself "No way, that would be like a depression!" But because the numbers are getting higher, the actual point moves aren't as dramatic as they may seem on the surface. If we hit 10,000, that would represent a decline of approximately 29% from the high reached back in October 2007. As I write this, the Dow is about 20% off the high. Is another 9% feasible?
In a PowerPoint-style presentation intended to rebuke criticism of its commitment to enhancing shareholder value, Yahoo! Inc. (NASDAQ: YHOO) attacks Carl Icahn's recent track record as an investor.
One slide points out that 11 of Icahn's 15 most recent investments in public companies have declined in value since he took his position. But what exactly is Yahoo!'s point? That Icahn is a lousy investor and probably wrong for investing in Yahoo! too? If that's the case, then they'd better sell the company while they can before it turns into another Icahn dud!
According to people familiar with the discussions, the Wall Street Journal reported that Microsoft Corporation (NASDAQ: MSFT) has held discussions with Time Warner Inc (NYSE: TWX) and News Corporation (NYSE: NWS), among others, about joining it in a deal that could lead to the breakup of Yahoo! Inc (NASDAQ: YHOO). Some of the sources said the preliminary talks are unlikely to result in a deal with Yahoo!
Johnson & Johnson (NYSE: JNJ) is reportedly in exclusive talks to sell its wound-care business Ethicon to the private-equity arm of JP Morgan Chase & Co (NYSE: JPM), according to the Wall Street Journal. Terms of the potential deal were not disclosed.
OTHER PAPERS:
Sources familiar with the inquiry said that the Justice Department has opened a formal antitrust investigation into a deal that would allow Google Inc (NASDAQ: GOOG) to provide some search advertising for Yahoo!. The Washington Post reported that investigators will demand documents from Google and Yahoo!, as well as other large companies in the media and Internet industries.
WEB SITES:
Reuters reported that regulators in the European Union are looking at the long-term effects of BHP Billiton Limited's (NYSE: BHP) $170B bid for Rio Tinto Group (NYSE: RTP). Sources familiar with the EU questionnaire said regulators have asked competitors and customers about effects of the deal on their businesses through 2015.
U.S. stock futures were higher Wednesday morning, as Wall Street could try to having yet another positive session. While Starbucks news of store closing and reports Microsoft may still be interested in Yahoo helped lift sentiment, UnitedHealth already issued a warning this morning. Employment data is also on tap before the market opens.
U.S. stocks finally ended higher on Tuesday. Surprisingly, it was car sales that helped the mood on the Street as as June sales came in not as bad as expected. The Dow industrials ended 32 points higher, or 0.28%, the S&P 500 added 4 points, or 0.38%, and the Nasdaq Composite added 11 points, or 0.52%.
Today, investors will have the ADP June private sector employment figures to chew on ahead of the government's report tomorrow. The employment report is expected to be released at 8:15 a.m. EDT. Then, at 10 a.m., May factory orders are due out.
Also on the docket today is weekly crude inventories, usually released at 10:30 a.m. EDT. While oil came off highs Tuesday due to a slightly stronger dollar, it again rose above $141 a barrel Wednesday, due to persistent supply concerns that has analysts warning of higher prices yet. An IEA report saying supplies will remain tight and demand will likely grow despite higher prices helped push prices higher.
It seems that not a day goes by without some news regarding one of the largest deals Wall Street is following intently these days, InBev's $46 billion hostile takeover bid for Anheuser-Busch Cos Inc. (NYSE: BUD).
On June 30, 2008, the last PCs with Windows XP were sold (theoretically) and 
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This past holiday weekend my colleague Doug McIntyre gave support to a blog I wrote in May 2007 when he posted 
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Stock futures were mixed early Thursday morning, the last and shortened day of trading this week -- markets will close at 1 p.m. EDT. Oil, again, has reached new highs as investors awaited the ECB decision on interest rate. Wall Street is also anxious about the upcoming jobs report, especially after Wednesday the ADP employment figures were worse than expected. Today's session will likely be choppy.
For those of you who own blue-chip stocks, this is an eye-opening prediction. An article at 
In a 
U.S. stock futures were higher Wednesday morning, as Wall Street could try to having yet another positive session. While Starbucks news of store closing and reports Microsoft may still be interested in Yahoo helped lift sentiment, UnitedHealth already issued a warning this morning. Employment data is also on tap before the market opens.
Alcoa's Q2 2008 earnings transcript
Anheuser-Busch (BUD) sues InBev, what's next?
Wal-Mart might help your portfolio during the recession
