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Newspaper wrap-up: Demand slows for ethanol, forcing up food prices

Posted Nov 28th 2007 8:53AM by Eric Buscemi (RSS feed)
Filed under: Newspapers, Magazines, Citigroup Inc. (C), Bank of America (BAC),

MAJOR PAPERS:
  • Citigroup Incorporated (NYSE: C) recently received an unexpected call from a "prominent investment banker" inquiring about a merger with Bank of America Corporation (NYSE: BAC); it was rejected outright, and Citi instead turned to the Abu Dhabi Investment Authority, a part of the Abu Dhabi government, for a $7.5B cash infusion, the Wall Street Journal reported.
  • As ethanol demands forced up food prices, and with questions about its capacity to be a significant oil substitute, demand has slowed, according to the Wall Street Journal, which doesn't help the prospects of newly public companies such as VeraSun Energy Corporation (NYSE: VSE) and Pacific Ethanol Inc (NASDAQ: PEIX).
  • The Financial Times reported that the SRM hedge fund increased its stake in British bank Northern Rock to 8.5% yesterday, probably in order to block Virgin Group from taking over the lender. SRM and RAB Capital, with a combined stake in Northern Rock of more than 15%, are backing a rival bid for the bank by British private equity fund Oilvant.
OTHER PAPERS:
WEB SITES:
  • MarketWatch's Herb Greenberg believes Lululemon Athletica Inc (NASDAQ: LULU) CEO Bob Meers may have "exaggerated a bit" about his job history. While it's true Mr. Meers was employed by Reebok International, he was not president and CEO of the brand for the length of time he stated, nor was he the president of the Rockport shoe and Greg Norman brands.

Newspaper wrap-up: Value of E*Trade's mortgage business up for debate

Posted Nov 26th 2007 8:00AM by Eric Buscemi (RSS feed)
Filed under: Newspapers, Magazines, Ford Motor (F)

MAJOR PAPERS:
  • The Achilles heel of discount broker E*Trade Financial Corporation (NASDAQ: ETFC) may be its lesser known mortgage business, whose value is now at the center of debate regarded its sale price, reported the Wall Street Journal.
  • According to a report prepared for European medicines authority, the Financial Times reported that Roche Holding Ltd (OTC: RHHBY) is responsible for impurities that caused an international recall of its HIV drug.
  • The FT also reported that the United Kingdom's Virgin Group was confirmed as the preferred bidder for British bank Northern Rock, as the bank said it wanted to hold discussions with Virgin "on an accelerated basis."
OTHER PAPERS:
  • Sources close to the matter said that Ford Motor Company (NYSE: F) may put the brakes on overseas plans in many markets including India, South Africa and China on hold until it completes the sale of its Jaguar and Land Rover units, according to the Economic Times.
  • China is expected to unveil more than 20 regulations on foreign mergers and acquisitions, or M&A, according to a senior Chinese legislator, Xinhua reported.

Virgins in space: Spaceport America moves forward

Posted Sep 5th 2007 4:16PM by Tom Barlow (RSS feed)
Filed under: Good news, Launches, Insiders, Next big thing

New Mexico's vision of becoming the home of commercial space travel is moving closer to reality as progress continues on the construction of Spaceport America. The winning design by URS Corp. (NYSE: URS) and Foster + Partners is in the process of being awarded for construction to begin next year, with completion slated for 2010. The 100,000 square foot facility near Las Cruces, NM, is budgeted at $31 million. It will serve as the launch spot for passenger and business travel into space.

The most noteworthy client for the new facility will be Virgin Galactic, part of Sir Richard Branson's Virgin Group. VG will base its suborbital spaceliners here, currently under construction by Scaled Composites in California. The company hopes to begin commercial flights on the Virgin SpaceShip Enterprise shortly after the facility is complete.

The terminal will be environmentally friendly, using passive heating and cooling and solar power collected on site for its electrical needs. A rolling concrete shell will shield those inside from mishaps.

Can you imagine? In just a few years, it will be within our means to get bumped from flights not just around the world, but into space! Live long and prosper.

Virgin Mobile USA dials up an IPO

Posted May 2nd 2007 11:07AM by Tom Taulli (RSS feed)
Filed under: Wal-Mart (WMT), Target Corp. (TGT), Sprint Nextel Corp (S), Best Buy (BBY)

Over the past few months, there were lots of rumors that Virgin Mobile would file to go public. Well, it came true today.

The company provides wireless services targeted at the youth market (ages 14-34). The company is a joint venture between Sprint Nextel Corp. (NYSE: S) and Virgin Group.

While Sprint provides the network infrastructure, Virgin focuses on the pizazz. This is known as the MVNO (mobile virtual network operator) model.

Virgin Mobile launched in July 2002 and now has 4.88 million customers. Last year, revenues topped $1.1 billion but there was still a net loss of $36.7 million. It helps that Virgin Mobile has extensive distribution with retail giants like Wal-Mart Stores (NYSE: WMT), Best Buy (NYSE: BBY), and Target Corp. (NYSE: TGT).

Virgin Mobile's services include flexible plans, both flat per-minute rates and buckets of minutes purchased in advance. There are also stylish handsets and a myriad of entertainment applications (such as ringtones, picture messaging and games).

The lead underwriter on the IPO is Lehman Brothers (NYSE: LEH) and the proposed ticker symbol is VM.

You can find the prospectus at the SEC web site.

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

Las Vegas Sands, MGM Mirage face new Macau competition

Posted Feb 12th 2007 6:25PM by Tom Barlow (RSS feed)
Filed under: Products and services, Launches, Industry, Las Vegas Sands (LVS)

At one time Chinese billionaire Stanley Ho owned the casino business in Macau. But after the Chinese government extended licenses to outside operators such as Las Vegas Sands (NYSE:LVS) and MGM Mirage (NYSE:MGM), Ho's Sociedad de Jogod de Macau (SJM) casinos have dropped to 63% of the market, much of the loss in the high-roller segment. JPMorgan forecasts SJM's share will drop to about 25% within three years. Although SJM owns 17 casinos in Macau, many are aged, run down, and away from the center of development for the coming mega-casinos on the Cotai Strip.

Now Ho has struck back with his biggest, most opulent casino, the almost $400 million Grand Lisboa Hotel. The ostentatious design, even by casino standards, was inspired by the Faberge egg and built in the form of a golden lotus flower topped with long, frond-like plumes.

The magnitude of the project, while huge in comparison with Ho's earlier casinos, pales in the light of the Galaxy Entertainment's planned Coati Mega Resort, Melco PBL's Crown Macau, the Sands' Macau Venetian Casino Resort and whatever the Virgin Group decides to do with the 20 hectares acres they have purchased.

2006's lush returns only hastened development projects in Macau, but with all the huge investments underway, one has to wonder if the customer base will expand quickly enough to pay off. While new investors offer the glitzy, modern facilities, Ho's fortunes are tied to aged properties. Will the Grand Lisboa be enough to keep him in the game?

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Last updated: November 25, 2009: 03:16 PM

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