edelfenbein
Think again:Amsterdam.........................................$6.48 Oslo...................................................$6.27 Milan .................................................$5.96 Copenhagen .....................................$5.93 Brussels ............................................$5.91 Stockholm ..........................................$5.80 London ...............................................$5.79 Frankfurt ............................................$5.57 Paris ..................................................$5.54 Lisbon ................................................$5.35 Budapest ............................................$4.94 Luxembourg ....................................... $4.82Zagreb................................................ $4.81 Dublin .................................................$4.78 Geneva............................................... $4.74 Madrid ................................................$4.55 Tokyo .................................................$4.24 Prague ...............................................$4.19 zBucharest ...........................................$4.09 Andorra ..............................................$4.08 Tallinn ................................................$3.62 Sofia ..................................................$3.52 Brasilia ...............................................$3.12 Havana ...............................................$3.03
Wednesday, June 6, 2007
The Backlash against Private Equity
edelfenbein
When most investors think of risk, they think of stocks going down. Today, I think a big risk investors face is selling out too early.
Last week, I wrote about an emerging backlash against private equity buyouts and, in particular, my opposition to the Biomet (BMET) deal. Basically, these PE guys are getting great deals and I’d like to see more shareholders say “not so fast.”
To quote George Bailey:
Can’t you understand what’s happening here? Don’t you see what’s happening? Potter isn’t selling. Potter’s buying. And why, because we’re panicky and he’s not! He’s picking up some bargains. Now we can get through this thing all right. We’ve got to stick together though; we’ve got to have faith in each other.
As usual, I’m totally ahead of the curve.
The Wall Street Journal noted this backlash in an article yesterday. Some private equity deals are being sweetened, or organized as “stub equity,” meaning shareholders get a stake on the private equity side.
I was happy to see shareholder win a victory when the private equity offer for Laureate Education (LAUR) had to be raised to $62 a share from $60.50 a share due to shareholder opposition. Would it surprise you to learn that the private equity group is being led by the company’s CEO?
This is a nice reminder that management works for shareholders, not vice versa.
When most investors think of risk, they think of stocks going down. Today, I think a big risk investors face is selling out too early.
Last week, I wrote about an emerging backlash against private equity buyouts and, in particular, my opposition to the Biomet (BMET) deal. Basically, these PE guys are getting great deals and I’d like to see more shareholders say “not so fast.”
To quote George Bailey:
Can’t you understand what’s happening here? Don’t you see what’s happening? Potter isn’t selling. Potter’s buying. And why, because we’re panicky and he’s not! He’s picking up some bargains. Now we can get through this thing all right. We’ve got to stick together though; we’ve got to have faith in each other.
As usual, I’m totally ahead of the curve.
The Wall Street Journal noted this backlash in an article yesterday. Some private equity deals are being sweetened, or organized as “stub equity,” meaning shareholders get a stake on the private equity side.
I was happy to see shareholder win a victory when the private equity offer for Laureate Education (LAUR) had to be raised to $62 a share from $60.50 a share due to shareholder opposition. Would it surprise you to learn that the private equity group is being led by the company’s CEO?
This is a nice reminder that management works for shareholders, not vice versa.
The Backlash against Private Equity
edelfenbein
When most investors think of risk, they think of stocks going down. Today, I think a big risk investors face is selling out too early.
Last week, I wrote about an emerging backlash against private equity buyouts and, in particular, my opposition to the Biomet (BMET) deal. Basically, these PE guys are getting great deals and I’d like to see more shareholders say “not so fast.”
To quote George Bailey:
Can’t you understand what’s happening here? Don’t you see what’s happening? Potter isn’t selling. Potter’s buying. And why, because we’re panicky and he’s not! He’s picking up some bargains. Now we can get through this thing all right. We’ve got to stick together though; we’ve got to have faith in each other.
As usual, I’m totally ahead of the curve.
The Wall Street Journal noted this backlash in an article yesterday. Some private equity deals are being sweetened, or organized as “stub equity,” meaning shareholders get a stake on the private equity side.
I was happy to see shareholder win a victory when the private equity offer for Laureate Education (LAUR) had to be raised to $62 a share from $60.50 a share due to shareholder opposition. Would it surprise you to learn that the private equity group is being led by the company’s CEO?
This is a nice reminder that management works for shareholders, not vice versa.
When most investors think of risk, they think of stocks going down. Today, I think a big risk investors face is selling out too early.
Last week, I wrote about an emerging backlash against private equity buyouts and, in particular, my opposition to the Biomet (BMET) deal. Basically, these PE guys are getting great deals and I’d like to see more shareholders say “not so fast.”
To quote George Bailey:
Can’t you understand what’s happening here? Don’t you see what’s happening? Potter isn’t selling. Potter’s buying. And why, because we’re panicky and he’s not! He’s picking up some bargains. Now we can get through this thing all right. We’ve got to stick together though; we’ve got to have faith in each other.
As usual, I’m totally ahead of the curve.
The Wall Street Journal noted this backlash in an article yesterday. Some private equity deals are being sweetened, or organized as “stub equity,” meaning shareholders get a stake on the private equity side.
I was happy to see shareholder win a victory when the private equity offer for Laureate Education (LAUR) had to be raised to $62 a share from $60.50 a share due to shareholder opposition. Would it surprise you to learn that the private equity group is being led by the company’s CEO?
This is a nice reminder that management works for shareholders, not vice versa.
Goldman Sachs Runs Italy?
edelfenbein
Some Italians aren't pleased that their prime minister, head of the central bank and deputy treasury head are all former Goldman Sachers.
I understand, but look at it this way: Who has a better government track record over the last 100 years, Italy or Goldman?
Some Italians aren't pleased that their prime minister, head of the central bank and deputy treasury head are all former Goldman Sachers.
I understand, but look at it this way: Who has a better government track record over the last 100 years, Italy or Goldman?
Avaya To Be Taken Private
edelfenbein
Another stock is leaving the public market. This time, it’s Avaya (AV), which is one of the spin-offs of the spin-offs of AT&T.
It’s been 25 years since Judge Greene ordered AT&T to be broken up, and the pieces are now all over the place. One of the rules of the breakup order is that the new companies had to have worse and worse sounding names. This started with Nynex and continued through with Lucent, Avaya and Agere.
In 2000, Avaya was spun-off from Lucent which isn’t even Lucent anymore, it’s Alcatel-Lucent (ALU). Although I doubt the hyphen will stay around much longer. In 1996, AT&T spun-off Lucent. I remember I sold my shares almost immediately and the stock shot up from there.
If you’re old enough to remember those old-style rotary phones, those phones weren’t owned by customers, they were leased from Ma Bell. Well, that business still exists and Lucent runs it. If you’ve ever wondered why New York City’s area code is 212, it’s because it’s fast on a rotary phone.
According to Lucent, they lease about 750,000 phones today.
Another stock is leaving the public market. This time, it’s Avaya (AV), which is one of the spin-offs of the spin-offs of AT&T.
It’s been 25 years since Judge Greene ordered AT&T to be broken up, and the pieces are now all over the place. One of the rules of the breakup order is that the new companies had to have worse and worse sounding names. This started with Nynex and continued through with Lucent, Avaya and Agere.
In 2000, Avaya was spun-off from Lucent which isn’t even Lucent anymore, it’s Alcatel-Lucent (ALU). Although I doubt the hyphen will stay around much longer. In 1996, AT&T spun-off Lucent. I remember I sold my shares almost immediately and the stock shot up from there.
If you’re old enough to remember those old-style rotary phones, those phones weren’t owned by customers, they were leased from Ma Bell. Well, that business still exists and Lucent runs it. If you’ve ever wondered why New York City’s area code is 212, it’s because it’s fast on a rotary phone.
According to Lucent, they lease about 750,000 phones today.
June 5 in History
edelfenbein
From Gary Alexander’s “This Day in Market History.”
Adam Smith was born in Scotland on June 5, 1723.
John Maynard Keynes was born in Cambridge on June 5, 1883, exactly 160 years after Smith.
On June 5, 1933, the U.S. Congress officially took America off of the gold standard. Gold’s price was raised by governmental fiat, from $20.67 to $35 per ounce. Gold was forbidden for Americans to own, but the gold mining stocks were fair game and were among the best performers in the 1930s.
From Gary Alexander’s “This Day in Market History.”
Adam Smith was born in Scotland on June 5, 1723.
John Maynard Keynes was born in Cambridge on June 5, 1883, exactly 160 years after Smith.
On June 5, 1933, the U.S. Congress officially took America off of the gold standard. Gold’s price was raised by governmental fiat, from $20.67 to $35 per ounce. Gold was forbidden for Americans to own, but the gold mining stocks were fair game and were among the best performers in the 1930s.
Market Sees 41% Chance of a Rate Hike
edelfenbein
Ben Bernanke predicts that the economy will rebound later this year. That's good to hear. Of course, in February he was expecting 2.5% to 3% growth this year -- not the 0.6% we have.
More importantly, however, is what the market says. The markets' odds for a Fed rate cut has dropped to 29% from 83% since the beginning of May. There's now a 41% chance of a rate increase.
Ben Bernanke predicts that the economy will rebound later this year. That's good to hear. Of course, in February he was expecting 2.5% to 3% growth this year -- not the 0.6% we have.
More importantly, however, is what the market says. The markets' odds for a Fed rate cut has dropped to 29% from 83% since the beginning of May. There's now a 41% chance of a rate increase.
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