Altria’s (MO) Phillip Morris USA received $1.2 billion in funds held in an escrow account under the bond stipulation in the Engle smoking and health class action in Florida today.
PM USA also said that it will immediately seek the discharge of a $100 million appeal bond in the same case.
$1.2 billion will repurchase a whole bunch of shares after the PMI spin is complete.
CNBC’s Maria Bartiromo dropped an bomb (at least for me) today in an interview with Hank Paulson.
Bartiromo said “everybody has the highest regard for you within government when it comes to economics, now, the latest talk is that, they want you at Citigroup (C), have you been approached about the CEO position?”
I actually danced when I heard that…
You may remember a month ago I almost begged the powers that be a Citi to get the former Co-President of Goldman Sachs (GS) in the door to run the bank. I had all but given up on it until today.
Paulson’s response?
The usual denial talk about “running full speed at treasury” until the end of Bush’s term. What was odd was that he did not deny being approached or being interested and he answered the question with an odd smile on his face almost as if he was saying to himself, “think she’ll buy this?”
Paulson at Citi would be a dream for shareholders. If anyone could give that institution the kick in the but it needs, it is him…
ZQK Quiksilver Inc 10.18
WSO Watsco, Inc 35.99
WFBC Willow Financial Banc … 9.01
WAG Walgreen Co. 36.49
VOL Volt Information Scie … 12.37
VM Virgin Mobile Usa Inc 6.78
UXG US Gold Corporation 3.12
MW Mens Wearhouse Inc 32.42
MSW Mission West Pptys Inc 9.80
MRT Mortons Restaurant Gr … 11.06
JSDA Jones Soda Co 6.31
JBL Jabil Circuit Inc 16.44
BNHN Benihana Inc 13.55
BLG Building Matls Hldg Corp 5.60
BJRI BJ’s Restaurants, Inc. 17.44
BIG Big Lots Inc 17.77
BBI Blockbuster Inc 3.40
Cell Phones, Bloggystyle, Race Hypocrisy, Krugman
– It though this number would actually be higher.
– Thanks for the mention….
– This is just great…..Maybe it is not what is said but who says it that matters?
– For the 1,242,876,000,000 time since Bush took office, Paul Krugman calls for the end of civilization as we know it.
Not sure if this is the best idea for Citigroup (C)….
The NY Times reported Sunday that Citi insider Vikrim Pandit is the lead candidate for the CEO job vacated by Chuck Prince.
According to The Times “no final decision had been made and that the four-member search committee, led by Richard D. Parsons, was reviewing other candidates.
The board is hoping that a chief executive can be named within the next week, a person briefed on the situation said. The search has been difficult and no clear choice has emerged, the person said, adding that support on the search committee seemed to be building for Mr. Pandit.”
Pandit’s ascension, if it happens, will not go smoothly. Several people inside Citi are vying for the job and given Pandit’s age, 54 and tenure at Citi, 7 months, his getting the job would cause an exodus of candidates who would not see a vacancy at the Citi CEO office for decades. Assuming Pandit did not fail.
What to do then? Bring in an outsider. Why? Any insider that is given the spot will not be greeted by investors with glee because it will be assumed not much will change at the bank. Who then? In the past I have wished for former Goldman Sachs (GS) Co-President Hank Paulson but it would appear the chances of that are, well, nothing. My second choice would be Richard M. Kovacevich. the former Wells Fargo (WFC) chief executive, and current chairman. At 64 and an alumnus of Citicorp’s consumer banking group Kovacevich would accomplish several very important things.
He would bring a impeccable banking track record to Citigroup that would, unlike any other candidate currently being considered, give investors a sense that Citi’s current problems would be fixed. At 62, Kovacevich would also not take the job long term. This would stop an exodus of talent currently at Citi as they would know the CEO job would be up for grabs again in a few years. Finally, his taking the post would finally enable Robert Rubin to do what he wants to do, get back into politics.
Nothing against Vikrim and me may eventually get the job and do it wonderfully. But, another insider being promoted at Citi, an institution investors have been begging for change at will not boost the stock. Pandit will be greeting with a heavy dose of skepticism. For one, he will have to prove his ability unlike Kovacevich who has proven he can do the job, and secondly, if Pandit is named, investors will wonder why it took so long to name him.
The question will be, was he the first pick, the last one or the only one who said yes?
What is it going to take for these guys to get it right?
Sprint (S) rejected an offer by South Korea’s SK Telecom and private-equity firm Providence Equity Partners to invest $5 billion in the company and to install NexTel’s former Chairman, Tim Donahue, as chief executive officer.
Mr. Donahue’s group proposed a deal in a Nov. 10 letter to Sprint’s board. The board didn’t grant Mr. Donahue or the investors a meeting before declining the offer, these people said. It makes sense, with shares down 36% since early June and subscribers fleeing faster than the Saigon evacuation after Vietnam, why even consider an alternative or hear what they have to say?
Let’s not forget that Mr. Donahue, who was CEO of Nextel negotiated its sale to Sprint in 2004 for $35 billion and became chairman of the combined company after the merger closed in 2005. He stepped down late last in 2006. The proposal said he would return as CEO and would bring in a full slate of executives to handle marketing and operations. Sprint’s fortunes have decline precipitously since his departure.
In short, this guy knows what he is doing. He took NexTel from a bit player to a major force. Maybe current management longs for those good ‘ole days?
Some Sprint directors say Sprint bought a wireless carrier with a “creaky network that needed major upgrades and a user base susceptible to being lured by competitors.” If that is so, why was NexTel adding subscribers by the bucket full at the time of the merger and if the network issues are true, why pay $35 billion for it? NexTel users became “susceptible top being lured” only after being treated like an inconvenience by Sprint customer service reps.
The Donahue group said in the letter to the board that it would invest $5 billion or “potentially substantially more” in the form of securities convertible into equity after some period of time at a stock price 20% higher than Sprint’s current price as well as a noncash dividend of 3% to 4% and said they were prepared to sign a definitive agreement with Sprint within 10 days. In short, they were putting their money where their mouth was…..
Activist investor Ralph Whitworth, who before former CEO Gary Forsee quit had threatened a proxy fight for board seats unless Sprint directors immediately dealt with the company’s leadership issue, praised the Sprint board. “I don’t think the CEO job ought to be up for auction,” said Mr. Whitworth.
Mr. Whitworth’s Relational Investors LLC owns just under 2% of Sprint’s shares. “It’s bad business to link minority investments with CEO selection decisions,” he continued. “If I had been a board member, it would have been dead on arrival. The board did the right thing.”
HYPOCRISY!! So, I guess it is ok to link boards seats to a minority investment Ralph? Am I the only one who caught that? Now, we should listen to Mr. Whitworth, after all he is the one who lead the charge at Home Depot (HD) to get rid of then CEO Nardelli, sell supply and take on massive debt to fund an ill-conceived share buyback. How did that work out Ralph?
I fell bad for Sprint shareholders, it will be a long hard slog with these guys at the helm.
The only was this makes any sense is if they are going to sell to Google (GOOG) soon which given the news Google is officially bidding for wireless spectrum, is less likely every day.
A special “Thank You” to the top traffic generators for the month of November to ValuePlays (ranked in order)
2- Stockpicker
6- TheStreet.com
7- Minyanville
Limited Brands Inc –LTD= $7,586,526
Enteromedics Inc –ETRM= $5,000,000
El Paso Pipeline Partners L P –EPB= $4,504,000
Mcmoran Exploration Co –MMR= $2,733,887
Private Media Group Inc – PRVT= $2,194,250
Inland Real Estate Corp –IRC= $1,858,424
Unitrin Inc –UTR= $1,456,630
Cardinal Health Inc – CAH= $1,149,970
Fannie Mae – FNM = $1,105,687
Weingarten Realty Investors –WRI = $1,011,680
Blackrock Inc New – BLK= $1,003,462
Here are this week’s best at VIN.
A brief look at two attitudes held by value investors which are not only childish but inhibitive to our learning.
Sardar Biglari’s Lion Fund increased its stake in Steak n Shake and the activist billboards and websites go up. I’m guessing he will also be putting the new cash from Western Sizzlin’s rights offering to work on this situation as well shortly.
The head of Fairfax Financial had a front-row seat when the Japanese market began its 15-year retreat. And he thinks the U.S. indexes might be about to do the same. Click on FULL STORY for all.
Fund manager Amit Chokshki attended this week’s 3rd Annual New York Value Investing Congress on behalf of Seeking Alpha. Here are Amit’s notes from the presentation of David Einhorn, Greenlight Capital:
Fund manager Amit Chokshki attended this week’s 3rd Annual New York Value Investing Congress on behalf of Seeking Alpha. Here are Amit’s notes from the presentation of T2 Partners’ Whitney Tilson and Glenn Tongue:
Fund manager Amit Chokshki attended the 3rd Annual New York Value Investing Congress this week on behalf of Seeking Alpha. Here are Amit’s notes from the presentation of Leon Cooperman, Omega Advisors:
Fund manager Amit Chokshki attended this week’s 3rd Annual New York Value Investing Congress on behalf of Seeking Alpha. Here are Amit’s notes from the presentation of Rich Pzena, Pzena Investment Managment:
At current levels, I can’t find a better risk/reward stock in the market than USG.
“In this web-only video clip shot with my own trusty minicam, you’ll see some additional footage from Becky’s “video diary” as she tells us what really happens “behind-the-scenes.”
A response to “The Follies of Value Investors” – The comparison between the returns of different value / quant funds – Number of employees working for Lampert, Pabrai, Buffett – Investing with great allocators
WAG Walgreen Co. 36.87
UXG US Gold Corporation 3.50
NVGN Novogen Limited 6.10
NOBL Noble Intl Ltd 16.10
NOA North Amern Energy Pa … 12.55
SOLD Housevalues Inc 3.42
SMTK Simtek Corp 2.05
IIG Imergent Inc 12.79
IHC Independence Holding … 13.90
BMJ Birks & Mayors Inc 6.15
BIG Big Lots Inc 19.00
ANEU American Cmnty Newspa … 4.00
ACME Acme Communication Inc 3.05
Sears Holdings (SHLD) Chairman Eddie Lampert issued the following letter to employees yesterday.
To our Associates:
Yesterday, Sears Holdings announced our results for the third quarter of 2007. While we were not pleased with these results, much of the commentary in the media and on Wall Street following the results ignores the strength of our company and the progress that we have made. In fact, over the past several years, we are one of the few retail companies that have actually reduced our overall debt levels, while at the same time investing over $1 billion on capital expenditures, making investments in inventory for our customers, contributing significantly to our pension plans for our past and future retirees and repurchasing over $3 billion of our shares.
As Aylwin said yesterday, we cannot blame our results entirely on the retail and macro-economic environments, and we need to continue our quest to improve. At the same time, it is also the case that many retailers, including Home Depot (HD), Lowe’s (LOW), Macy’s (M), Kohl’s (KSS) and JC Penney (JCP), have suffered from the economic environment of the past year and have had disappointing sales and earnings results. Much of the commentary following their results focused on the difficulties in the housing markets, the overall macro environment, and the highly promotional nature of the retail environment that has existed recently. An analyst for Fitch, the credit rating agency, reacting to JC Penney’s new store openings was cited as praising JC Penney for keeping expenses under control. When other companies manage expenses carefully, it is often characterized as a sign of good management and prudence. In the case of Sears Holdings, meanwhile, expense controls are often cited as a root cause of poor performance.
Sears Holdings sells a large variety of merchandise. Many of our merchandise categories, including home appliances, tools, and lawn and garden equipment are directly related to home improvement, home maintenance and home turnover related activities. As Mike Ullman, CEO of JC Penney, was quoted recently as saying, “It’s hard to sell window coverings to homes that aren’t being built.” JC Penney reported lower income in its most recent quarter compared to last year. Kohl’s Corp. reported that its income for the past quarter was lower as well. The same goes for Home Depot and Lowe’s. All of these companies have spent enormous amounts to open new stores and to remodel existing stores and still ended up with lower earnings. Spending lots of money doesn’t always lead to the results people expect.
In fact, Sears Holdings has made significant investments and taken measured risks, including the increase in our inventory position over the past couple of years. Not all of these risks pan out and, in the case of our inventory investment, the additional inventory has not resulted in improved sales and profitability. Had the economic environment been different, certain actions may have led to different results. We are taking actions to adjust our inventory position so that, by the end of our fiscal year, we expect our inventory levels will be below the levels of the prior year.
Retail is a fickle business. Nevertheless, like any other business, by focusing on the long term, making decisions based on facts and logic, and appreciating that all decisions are based on many possible future scenarios, companies can navigate the ups and downs of the economy and the stock market to create long term value for their shareholders. That is our focus, and our goal, at Sears Holdings. We will take the actions we believe are necessary to drive value over the long term and manage the business closely and opportunistically in the short term.
We thank you for your hard work and are committed to working to deliver better results in the future. Remember, not everybody likes rooting for the underdog. It is up to us to earn their respect by our performance on the retail playing field.
Respectfully,
Edward S. Lampert
Chairman
Sears Holdings
Buffett’s success, Blogsport, Rove, Censorship
– Here is one of the best articles to date about what makes Warren so good at what he does.
– Great name Adam.
– If you can’t get ’em legally, just cheat.
– Starbucks apparently has some thin skin
Why “mandate” refiners use less ethanol they are already using? Shouldn’t a “mandate” require they use more than they already are? Isn’t that the point?
Regulators on Tuesday set the new renewable fuels standard of nearly 4.7% for next year to meet a federal mandate that at least 5.4 billion gallons of ethanol be blended into transportation gasoline in 2008.
The standard for 2007 was slightly more than 4 percent, which amounted to roughly 4.7 billion gallons, according to the Environmental Protection Agency. The volume target increases every year until reaching 7.5 billion gallons in 2012. Why is this a joke? The U.S. currently has 134 operating ethanol plants with a total capacity of 7.2 billion gallons. That means the “mandate” could have been raised another 20% to 30% and current capacity could have easily handled it.
With producers like ADM (ADM) currently undergoing capacity upgrades that will have it producing 1.6 billion gallons itself annually, if congress and the EPA are indeed serious about making a dent in our oil consumption and the strangle hold it has on us, more aggressive target are required. Verasun (VSE) has put expansion on hold chiefly due to uncertainty over Congressional legislation.
The industry is currently subdued after it meteoric rise in early 2006. Unless congress want the inevitable consolidation that will occur, concentrating production in only a few companies, action is required. We are at a crossroads. We have the production available but unless we force refiners like Exxon (XOM), BP (BP) and Chevron (CVX) to use it, they will not as it ultimately threatens them.
Ethanol currently sells for $1.96 a gallon and every car in the US can run on a 10% blend. Currently several states have not yet enacted the 10% blend level and this EPA “mandate” only assures that will not happen anytime soon.
Almost 8 million of autos and trucks can run on the E85 blend. My Suburban can, but I cannot buy the fuel here. Supply it and you can bet I will. I would gladly support an Iowa farmer over a Saudi Shiek and smile while doing it.
Down the road, Konrad Imielinski reports:
“The U.S. House of Representatives could vote on a wide-ranging energy bill next week that would triple the use of ethanol. There is speculation that legislation will require 20.5 billion gallons of ethanol by 2015, with 5.5 billion gallons of that coming from cellulosic ethanol. The bill is also speculated to set short-term targets of 9.5 billion gallons by 2008 and 11.6 billion gallons by 2009. Back in June, the Senate passed a proposal to require 36 billion gallons of ethanol use by 2022. Democrats will also attempt to hit the oil industry with $15 billion in taxes and require utilities to get 15 percent of their electricity from wind, solar and other renewable sources.”
Congress needs to act and the party that takes the lead may just get credit years from now for saving us from oil. Isn’t that enough motivation?
