M&A Sees August Revival as Companies Tap $3 Trillion

Posted by & filed under Economic Analysis, Growth & Valuation.

Description: Companies sitting on almost $3 trillion in cash are starting to spend it, putting what is typically the slowest month for mergers and acquisitions on course to be the busiest this year.

Source:  Businessweek.com

Date: 08/20/2010

Link:  http://www.businessweek.com/news/2010-08-20/m-a-sees-august-revival-as-companies-tap-3-trillion.html
 
Questions for discussion:

  • Summarize the current state of M&A activity?
  • What are the reasons for this level of activity?
  • How do you think activity would react to a rise in interest rates?
  • How do you interpret the recent bond activities?

Druckenmiller to Shut Fund After 30 Years as Stress Takes Toll

Posted by & filed under Management Issues.

Description:  Hedge-fund icon Stanley Druckenmiller is quitting the business after three decades, telling investors he’d been worn down by the stress of trying to maintain one of the best trading records in the industry while managing an “enormous amount of capital.”

Source: Businessweek.com
 
Date: 08/18/2010

Link: http://www.businessweek.com/news/2010-08-18/druckenmiller-to-shut-fund-after-30-years-as-stress-takes-toll.html

Questions for discussion:

  • What are the reasons given for Druckenmiller’s decision?
  • What do you think of his decision?
  • Do you believe he’ll be back, after some time away on a golf course?

News Hub: Yellow Flags Ahead for Investors

Posted by & filed under Company Analysis, Growth & Valuation.

Description:  Brett Arends tells Simon Constable and Michael Casey a few of his ten reasons why investors should becautious ahead.

Source: Marketwatch.com  – video report
 
Date: 08/13/2010

Link: http://www.marketwatch.com/video/asset/news-hub-yellow-flags-ahead-for-investors/3E054F1A-9AAE-4733-B2A4-59E18B0DEEC9

Questions for discussion:

  • Summarize the concerns expressed in this report.
  • Do you agree with the primary points – especially those related to deflation?
  • What investing strategy would you recommend now?
  • What course should corporate financial management planners follow?

Reagan insider: ‘GOP destroyed U.S. economy’

Posted by & filed under Economic Analysis, Governments & Regulators.

Description:    “How my G.O.P. destroyed the U.S. economy.” Yes, that is exactly what David Stockman, President Ronald Reagan’s director of the Office of Management and Budget, wrote in a recent New York Times op-ed piece, “Four Deformations of the Apocalypse.”

Source:  Marketwatch.com
  
Date: 08/10/2010

Link: http://www.marketwatch.com/story/reagan-insider-gop-destroyed-us-economy-2010-08-10?pagenumber=1

Questions for discussion:

  • Summarize the comments made in this article that relate to the role of governments in financial matters?
  • What are the similarities and differences between the financial management of a company and that of a country? 
  • What is your opinion of the current state of financial affairs and how they are impacting on business financial planning?

Cisco Systems’ profit jumps 79%

Posted by & filed under Company Analysis.

Description:  Shares tumble in late trading after revenue comes in lighter than estimates

Source:  Marketwatch.com
 
Date: 08/10/2010

Link: http://www.marketwatch.com/story/cisco-profit-jumps-shares-fall-on-revenue-miss-2010-08-11?siteid=nwtwk

Questions for discussion: 

  • From a fundamental analysis point of view, explain the drop in share value.
  • From a technical analysis point of view, explain the drop in share value.
  • Do you think Cisco is a good investment today?

M&A Losers in $10 Trillion Deal Binge Led by McClatchy, Sprint

Posted by & filed under Company Analysis.

Description: More than half of the 100 biggest takeovers made during the last mergers-and-acquisitions boom have something in common: By one measure, they never should have happened.

Source:  Businessweek.com

Date: 08/13/2010

Link:  http://bx.businessweek.com/mergers-and-acquisitions/view?url=http%3A%2F%2Fwww.bloomberg.com%2Fnews%2F2010-08-13%2Fm-a-losers-in-10-trillion-takeover-binge-led-by-mcclatchy-sprint-nextel.html
 
Questions for discussion:

  • Summarize the lessons learned from this report about the “success and failures” of M&As.
  • What do you suppose is the motivation, in spite of this knowledge?
  • What alternative growth strategies should financial managers take instead?

Blackstone to Pay $4.7 Billion for Dynegy

Posted by & filed under Company Analysis.

Description: The Blackstone Group, the private equity giant, agreed on Friday to buy Dynegy, the Houston power company that once sought to buy Enron, for $4.7 billion including debt, in the largest leveraged buyout so far this year.

Source: NYTimes.com

Date: 08/13/2010

Link: http://www.nytimes.com/2010/08/14/business/14dynegy.html?ref=business

Questions for discussion:

  • Is this a good deal?
  • Is the risk justified?
  • What is the basic financial calculation upon which this deal is based?
  • Do you agree with this line of reasoning?

Apple sets sights on Exxon value

Posted by & filed under Company Analysis, Growth & Valuation.

Description: Apple’s super streak gives it a market valuation second only to the oil behemoth Exxon Mobil. But readers of ‘The Buzz’ are skeptical.

Source: CNNMoney.com – video report

Date: 08/06/2010

Link: http://money.cnn.com/video/news/2010/08/06/n_bz_apple_exxon_mobile.cnnmoney/

Questions for discussion:

  • Summarize the reasons given for the overvaluation of Apple stock?
  • What were the arguments that suggest Apple is not overvalued and in fact has more growth potential?
  • Would you be a buyer of Apple stock today?

Wall Street resumes hiring

Posted by & filed under Economic Analysis, Management Issues.

Description:  CNN’s Maggie Lake talks to a high-powered headhunter, who says Wall Street hiring is bouncing back. 

Source:  CNNMoney.com – video report
  
Date: 08/06/2010

Link: http://money.cnn.com/video/news/2010/08/06/n_wall_street_hiring.cnnmoney/

Questions for discussion:

  • How do you interpret the increase in hiring on Wall Street?
  • Do you believe there is a correlation between Wall Street activity and the economy in general?