Daily Archives: November 10, 2008

Centennial 100% Premium Buyout Could Ignite Sector (CYCL, T)

Centennial Communications Corp. (NASDAQ: CYCL) will be trading up huge on a $944 million buyout from AT&T Inc. (NYSE: T).  This was a 100% premium-merger, and you have to wonder if the larger telecom giants still have an appetite to consolidate the players if it means they can grow their footprint.

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Posted on: November 10, 2008 – 7:45 am in Mergers and Buy Outs, Telecom, Wireless, ,

Nortel (NT) Turns 1,300 People Out Into The Cold

UnemplyIt is cold in Canada this time of year and for some people it will get colder. One of the nation’s largest companies, Nortel (NT), will dump 1,300 people and freeze salaries as it fights for its life. Telecom equipment providers like NT and Alcatel-Lucent (ALU) are punting employees are a remarkable rate.

Nortel posted a third-quarter loss of $3.4 billion, or $6.85 per share, compared with a year-earlier profit of $27 million, or $.05, and it cut its earnings estimate.

Chief Executive Officer Mike Zafirovski who was bought in to save the company has not done a terribly good job. The stock is down from a 52-week high of $19.42 to $1.17. It is a good bet it goes lower today.

Douglas A. McIntyre

Posted on: November 10, 2008 – 7:24 am in Earnings Warning, ,

T Boone Picken’s Plan To Run American Energy System

Tx00338coilwellgusherodessatexasposT. Boone Pickens plans to ruin the American electricity infrastructure by overloading it with power from his windmill farms. He may have access to cheap energy, but he may not have access to a means of getting it to where it will do any good.

According to The New York Times, "Adding electricity from the wind and the sun could increase the frequency of blackouts and reduce the reliability of the nation’s electrical grid."

The potential fiasco can be filed under the name of plans which are too good to be true. Wind energy that destroys it own means of transportation.

Douglas A. McIntyre

Posted on: November 10, 2008 – 6:25 am in Oil & Gas

Things At Dell (DELL) Get Worse Under Michael Dell

Dell20logoBringing Michael Dell back to run the company he founded seems to be making things worse.

Last week, Dell (DELL) said it would have to cut more costs and even made the ludicrous suggestion that employees take vacation without pay. As far as anyone knows, Mr. Dell has the money to take that week off. The people who work for him probably don’t.

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Posted on: November 10, 2008 – 6:18 am in PC Companies, , , ,

IBM (IBM) And P&G (PG) Bail Out Detroit

Batmobile512IBM (IBM) will pay about $4 billion in taxes this year. Procter & Gamble (PG) will pay closer to $6 billion. If GM (GM) is losing $1 billion a month, the income taxes from the two healthy companies could support is for nearly a year.

With about $40 billion in tax payments this year, Exxon Mobil (XOM) could support all of The Big Three. Since the oil company made money off high fuel prices perhaps that is only just.

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Posted on: November 10, 2008 – 6:04 am in Autos, , , , ,

AIG (AIG): A Firm With Ineffective Management Makes Problems Worse

AIG (AIG) probably has the wrong management in place. A retired CEO from Allstate may not be the man. The insurance company lost another $24.47 billion billion in the third quarter.

AigThe current plan at the damaged insurance company is "if at first you don’t succeed, try, try again". It is the American character never to give up on something that has be started, no matter how futile the cause. The US government’s financial rescue program has a bit of that spirit in it. Regardless of how bleak a large insurance company or bank’s prospects may be, the Treasury and Fed are prepared to barrel ahead.

One reasons that giving up on troubled financial companies seems to be a bad idea is the lesson of Lehman Brothers. As it fell, it damaged large numbers of firms which held its paper.

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Posted on: November 10, 2008 – 5:37 am in Politics,

Media Digest 11/10/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

NewspaperAccording to Reuters, China announced an economic stimulus package of almost $600 billion.

Reuters reports that AIG (AIG) is about to get a new bailout from the US government which will be worth $150 billion.

Reuters writes that gas prices are continuing their sharp decline.

Reuters reports that Citigroup (C) is in talks to buy a regional bank.

Reuters writes that Democrats are still asking Treasury to help US car companies.

Reuters reports that Dell (DELL) will not launch its music player before Christmas.

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Posted on: November 10, 2008 – 3:56 am in Press Digest, , , , , , , , , , , , , , , ,

Asia Markets And Europe Open 11/10/2008

China_2Asia markets rose on news of a $600 billion Chinese economic stimulus package.

The Nikkei was up 5.8% to 9.081. Canon rose on a falling yen.

The Hang Seng jumped 4.6% to 14,890.

The Shanghai Composite soared 7.3% to 1,874.

In Europe, the FTSE opened up 2.4% to 4,471. The CAC 40 was up 2.6% to 3,448. The Dax opened up 2.7% to 5,072.

Data from Reuters.

Douglas A. McIntyre

Posted on: November 10, 2008 – 3:15 am in International Markets