Facebook is implementing a new stock structure to make sure the founders retain control, immediately causing rumors about an impending initial public offering. Why would Facebook need Class A and Class B shares otherwise? Under the new structure, which is similar to Google's (GOOG), Mark Zuckerberg and other early entrants wouldn't have to worry about yielding the floor to outsiders when if the company goes public.

The stock structure was adopted to ensure that existing shareholders keep control on voting issues, according to Facebook statement. No details were given as to who the winners are in this arrangement, but a Wall Street Journal report says that, according to its sources, all current shareholders would be converted to Class B shares, which carry 10 times the voting rights of Class A shares.

Continue reading New Facebook share structure hints at IPO

New Facebook share structure hints at IPO originally appeared on BloggingStocks on Wed, 25 Nov 2009 08:30:00 EST. Please see our terms for use of feeds.

The IPO market has been pretty slow for the past two years due to the effects of a subprime mortgage crisis that turned into a credit crisis that turned into a worldwide financial crisis and recession. Nonetheless, two companies made their debuts Thursday -- one on the NYSE (NYSE: NYX), the other on the NASDAQ -- and they nailed it. Hyatt Hotels (NYSE: H) gave its investors a 12% gain on its first Big Board trading day, and Ancestry.com (NASDAQ: ACOM) switched those digits, jumping 21% in its first day of trading.

Hyatt Hotels overcame two major concerns. The worldwide travel market slump has been tough on hotel companies, and Hyatt has been subject to the same forces as everyone else. Also, investors may have been worried about infighting among the founder's heirs (the Pritzker family), but the double-digit price increase suggests that investors don't foresee Bancroft-style squabbles screwing investors -- or, if you don't like Dow Jones, now a part of News Corp (NASDAQ: NWS), Playboy (NYSE: PLA) makes the same point.

Continue reading Hyatt and Ancestry.com IPOs: Beginners' luck?

Hyatt and Ancestry.com IPOs: Beginners' luck? originally appeared on BloggingStocks on Fri, 06 Nov 2009 09:40:00 EST. Please see our terms for use of feeds.

Dow Jones & Company, Inc. (NYSE: DJ)'s Wall Street Journal (a.k.a., Rupert's Rag, a.k.a. The Towel) occupies a unique spot in the media firmament. As I pointed out earlier in the year, it changed its format and now looks to me like a Holiday Inn bath towel. And since it appears that News Corp (NYSE: NWS) has finally won over enough Bancrofts to take control, I am officially changing this column's name from Towel Talk to Rupert's Rag, which will continue to offer a perspective on its news and views.

Reuters reports on an internal memo at The Rag, which confirms that "The Bancroft family has accepted. Dow Jones will be part of News Corp."

Details of which Bancrofts accepted and which did not will no doubt be forthcoming. The New York Times (permalink) reports that family members and trusts representing about 32% of the shareholder vote indicated they would support Murdoch's offer.

Continue reading Rupert's Rag: Bancrofts roll over

Rupert's Rag: Bancrofts roll over originally appeared on BloggingStocks on Tue, 31 Jul 2007 15:06:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• Rupert Murdoch's $5B, $60 a share offer for Dow Jones & Company (NYSE: DJ) appeared to be closer to a final deal as Dow Jones was negotiating with News Corporation (NYSE: NWS) to pay advisory fees for the Bancrofts, the majority stock holders, in exchange for some of the holdout members to back the deal, according to the Wall Street Journal.
• Barron's Online's "Inside Scoop" column reported that so far this year, five top BlackRock Inc (NYSE: BLK) executives grossed more than $82.4M by selling 486.5K shares on the open market at per-share prices ranging from $147.30 to $179.93, according to Thomson Financial data.

• Mortgage woes continued to deepen yesterday, reported the New York Times, which noted that the New York Stock Exchange elected not to allow trading yesterday on the shares of American Home Mortgage Investment Corp (NYSE: AHM), after the company reported that it would suspend its dividend and faced "significant" margin calls from banks.
• The New York Times reported that AT&T Inc (NYSE: T) has made a deal with online music retailer EMusic that will allow people to buy songs from independent labels through their cell phones.
• The Los Angeles Times reported that Toyota Motor Corporation (NYSE: TM) will introduce a new "standard" version of its Prius gas-electric hybrid for the 2008 with a base price of $20,950, 5.5% less than the lowest cost 2007 model.

Newspaper wrap-up 7-31-07: Dow Jones deal almost done? originally appeared on BloggingStocks on Tue, 31 Jul 2007 09:15:00 EST. Please see our terms for use of feeds.

News Corp: Too soon to celebrate Dow Jones? originally appeared on BloggingStocks on Mon, 25 Jun 2007 16:00:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal (subscription required) reported that online auctioneer eBay Inc (NASDAQ: EBAY) has resumed advertising with Google Inc (NASDAQ: GOOG), after having pulled its ads to prove that it didn't need to spend as heavily on Google's AdWords.
• The Financial Times reported that some inside and outside of Lazard Ltd (NYSE: LAZ) are questioning if CEO Bruce Wassertein has given the company a sustainable model that will be able to thrive without the current "dealmaking binge."
• According to the Financial Times, citing people familiar with the situation, News Corporation's (NYSE: NWS) Rupert Murdoch is looking beyond its $5B offer for Dow Jones and Company Inc (NYSE: DJ) in search of Internet acquisitions or a deal involving MySpace.

• Also concerning News Corp and Dow Jones, the U.K. Times reported that the Bancroft family, which controls Dow Jones, asked late Friday for two seats on News Corp's board, which is one more than Rupert Murdoch has been willing to offer.
• General Electric Company (NYSE: GE) is seeking to build a diesel locomotive plant in India, in partnership with Indian railway companies, reported Business Standard.
• Yediot Ahronot reported that Nice Systems Limited (NASDAQ: NICE) is in talks to acquire Actimize for $280M.

Newspaper wrap-up 6-25-07: eBay takes Google's AdWords back originally appeared on BloggingStocks on Mon, 25 Jun 2007 09:15:00 EST. Please see our terms for use of feeds.

General Electric out, News Corp in? originally appeared on BloggingStocks on Fri, 22 Jun 2007 13:25:00 EST. Please see our terms for use of feeds.

Continue reading The greatest 21st century media drama (so far)

The greatest 21st century media drama (so far) originally appeared on BloggingStocks on Thu, 21 Jun 2007 08:40:00 EST. Please see our terms for use of feeds.

Nearly every time I've written about Rupert Murdoch's bid for the Dow Jones Co. (NYSE: DJ), I've said this: If the Bancrofts want to even think about rejecting his bid, they owe it to shareholders to come up with something better. Well according to Reuters, they actually might be doing just that: "General Electric Co. and Pearson Plc may challenge News Corp.'s $5 billion bid for Dow Jones & Co., with a plan that could let Dow Jones's controlling family to keep an interest in the company, the Financial Times and Wall Street Journal reported on their Web sites on Sunday."

Reports suggest that the plan could allow the Bancrofts to keep a stake as high as 20%. If the reports are true, it's good to see that the Bancrofts are considering trying to find a "white knight" and retain their own financial stake in the company.

But you have to think that, if the company is sold, which it will be, Rupert Murdoch will win. He has deep pockets and has had his eye on the Journal for a long time. He came in with a big preemptive bid, and it's hard to imagine him letting someone else take it away from him.

Stop the presses! Are the Bancrofts going to put their money where their mouths are? originally appeared on BloggingStocks on Mon, 18 Jun 2007 09:00:00 EST. Please see our terms for use of feeds.

If you've been following the media reports, you know that editorial independence is the main issue holding up Rupert Murdoch's bid for the Dow Jones Company (NYSE: DJ): The Bancroft family is none too pleased with Murdoch's history of aggressive, meddlesome management with his newspapers, and they want assurances that he won't turn the Wall Street Journal into a tabloid or something like it.

The Bancrofts are trying to craft an editorial board with the ability to hire and fire editors, but Murdoch wasn't impressed with their proposal at the meeting. The two parties did not discuss the amount of Murdoch's offer, a strong indication that the Bancrofts really do only care about independence. So we can't question their motives.

But does the Board of Directors have a responsibility to look after the interests of the shareholders, the true owners of the company? And just as it's unethical for someone with a controlling position in a company to push through a buyout at a price that isn't fair to minority shareholders, shouldn't the Bancrofts look out for the interests of minority shareholders, rather than their own concerns about editorial independence?

I have no doubt that independence is important. But to reject a bid that is far superior to any value another party could provide Dow shareholders is bad governance. The Bancrofts should find another buyer or, possibly, consider doing a leveraged buyout themselves. But if none of that comes through, they probably need to sell the company to Murdoch, and try to get whatever safeguards in place they can to protect the independence of the greatest newspaper in the world.

Editorial independence is important to the Bancrotfs; But what about shareholders? originally appeared on BloggingStocks on Thu, 07 Jun 2007 18:40:00 EST. Please see our terms for use of feeds.

The Towel's union members are not happy about Rupert Murdoch's $5 billion bid for their employer. Neither are some shareholders, such as James Ottaway. The AP reports that the Independent Association of Publishers' Employees has reached out to supermarket billionaire Ron Burkle to make a competing bid.

Burkle, a buddy of former President Clinton who tried and failed to buy Tribune Co. (NYSE: TRB), is likely to treat union members with greater respect than Murdoch who in my estimation is a bit more to the right of the political spectrum.

Assuming that Burkle does come through with an offer, his odds of winning will be enhanced if he satisfies two tests: 1. He pays more money than Murdoch and 2. He guarantees not to meddle in editorial decisions. Up until today, I had not heard any speculation about Burkle's interest so I won't be surprised if new bidders emerge in the next few days.

With The Towel's stock closing 50 cents above Murdoch's price, it appears that investors expect more money on the table.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has consulted to News Corp.'s CEO and has no financial interest in Dow Jones.

Towel Talk: Will Ron Burkle give Murdoch a run for his money? originally appeared on BloggingStocks on Tue, 05 Jun 2007 18:00:00 EST. Please see our terms for use of feeds.

Before the bell 6-5-07: Stock futures fall ahead of Bernanke, data originally appeared on BloggingStocks on Tue, 05 Jun 2007 08:06:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal reported that TPG Capital and Silver Lake are poised to buy telecommunications equipment company Avaya Inc (NYSE: AV) for about $17 a share; Nortel Networks Corporation (NYSE: NT) was also said to be interested.
• News Corporation's (NYSE: NWS) Rupert Murdoch said he is willing to go along with tighter editorial independence, but won't give in to a key demand from Dow Jones & Company Inc's (NYSE: DJ) controlling Bancroft family that they control an editorial oversight board that would protect this, the Wall Street Journal reported.
• Barron's Online's Trader section believes Service Corporation International's (NYSE: SCI) 90% surge since August is the result of funeral service companies' virtual immunity to a slowing economy or rising rates - the market's two biggest fears right now.

• The New York Times reported that software maker Cadence Design Systems Inc (NASDAQ: CDNS) is in talks with private-equity players that include Kohlberg Kravis Roberts and the Blackstone Group about a possible sale of the company.
• Technology Web sites have discovered that Apple Inc (NASDAQ: AAPL) embeds customers' personal data into files the company uses to distribute music from its online iTunes music store, creating fears about privacy, the UK Times reported.
• The UK Times also reported that Royal Bank of Scotland Group (OTC: RBSPY) may be looking to sell Southern Water for GBP4B, a move that could lead to many more deals in Britain's privatized water industry.

Newspaper wrap-up 6-04-07: TPG Capital, Silver Lake may buy Avaya originally appeared on BloggingStocks on Mon, 04 Jun 2007 09:15:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal reported that the Bancroft family, which controls 64% of Dow Jones & Company Inc's (NYSE: DJ) voting power, said that it would meet with News Corporation (NYSE: NWS) to discuss its $5B bid for the company, but would also consider other bidders and options.
• The Wall Street Journal reported that The Coca-Cola Company (NYSE: KO) is attacking their sluggish performance by focusing on their bottler network in 200 countries, a move executives believe is important to the company's long-term health.
• Cadbury Schweppes ADS (NYSE: CSG) may soon announce a cost-cutting exercise worth nearly GBP300M that could feature closure of factories and job cuts, the Financial Times reported.
• Barron's Online's "Inside Scoop" column reported that Michael E. Marks, the chairman of Flextronics International Ltd (NASDAQ: FLEX), a director at SanDisk Corporation (NASDAQ: SNDK) and a new director of Sun Microsystems Inc (NASDAQ: SUNW), has made a $1M investment in Sun, the largest by an insider since August 2004.

• Retail giant Wal-Mart Stores Inc (NYSE: WMT), which has been on an "expansion craze" for decades, has decided to make a gradual slowdown in U.S. store expansion, and may embark on an initiative to return to more basic apparel offerings and an emphasis on low prices, the New York Post reported.

Newspaper wrap-up 6-1-07: Bancroft family to meet with News Corp originally appeared on BloggingStocks on Fri, 01 Jun 2007 09:15:00 EST. Please see our terms for use of feeds.

Dow Jones & Company's (NYSE: DJ) Wall Street Journal (a.k.a., The Towel) occupies a unique spot in the media firmament. As I pointed out earlier in the year, it changed its footprint and now looks to me like a Holiday Inn bath towel. Towel Talk offers a perspective on its news and views.

News Corp.'s (NYSE: NWS) bid for The Towel has plunged a fiery torch into the viper's nest of conflict and ambition at the paper. And this conflict has opened up the possibility of numerous bidders and targets in the beleaguered newspaper business.

I come to this story with some conflicts of my own. I have done consulting work for News Corp.'s Chairman and CEO and have worked with several reporters from The Towel. But what I find most interesting about this takeover is that it plunges right to the heart of the conflict within The Towel between the Bancroft family, which I imagine backs the Towel's arch conservative editorial page, and the reporting side, whose union representatives have opposed the deal.

Continue reading Towel Talk: Dow Jones' red state blues

Towel Talk: Dow Jones' red state blues originally appeared on BloggingStocks on Wed, 02 May 2007 13:00:00 EST. Please see our terms for use of feeds.

Continue reading Dow Jones and News Corp: Very 'Guys & Dolls,' very wrong

Dow Jones and News Corp: Very 'Guys & Dolls,' very wrong originally appeared on BloggingStocks on Tue, 01 May 2007 20:28:00 EST. Please see our terms for use of feeds.