Ross is one of the smarter ones out there. Ross talks about housing and oil. If you are in a good mood, don’t watch…
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This is just beautiful……
Netflix (NFLX) CEO Reed Hastings gave a timeline for the company to convert its business to digital distribution: 5 years. After that, he believes the mail-order DVD business will peak and then start to decline.
“We think the by-mail business is very strong but will probably peak in the next five years. Our key challenge is growing earnings per share and subscribers while funding streaming which should give us years of subscriber and earnings expansion.”
This comes less than two weeks after the company rolled out its set-top box to good reviews.
The news here is the contrast between two companies. One doggedly hanging on to an outdated business model and being dragged into the current one and another, a pioneer in the current model already looking down the road at the next one.
Rather than buying a heap of problems at Circuit City (CC) and trying to convert its video rental stores in Apple (AAPL) store look-a-likes, Blockbuster ought to be using that energy and the money involved to try to leap ahead of Netflix in the download game. It has not ruined its brand yet and any box that streamed movies into the home would get a try by folks.
But, the longer they wait, the more the current offerings become entrenched with consumers and the harder, and more expensive, changing their behavior becomes.
But hey, Blockbuster will always have the less than 1% of the population that actually still likes going to the video store…
Disclosure (“none” means no position):None
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Andrew Liveris (DOW) on Energy
Best line? “If the US had become as energy efficient as my company has in the last 5 years, it would not be importing a single drop of oil”…..Nuff said..
This guy is awesome……will anyone in Congress actually listen? How about this. Rather than bringing the execs from Exxon (XOM) or BP (BP) to the hill for a lecture, how about inviting Liveris there so he can give Congress much needed caning? Think they have the guts to do it? Me either…
Disclosure (“none” means no position):Long DOW
Mishkin, who has been a member of the Board since September 5, 2006, submitted his letter of resignation to President Bush. He will return to the Graduate School of Business at Columbia University as a professor of economics and resume teaching in the fall.
Mishkin, 57, was appointed to the Board by President Bush to fill an unexpired term ending January 31, 2014.
When Mr. Mishkin leaves, the Fed’s will have just four governors, making it harder to conduct its business. Board meetings usually need a quorum of four governors, so the absence of just one could interfere with policy decisions and increase the work load on Chairman Ben Bernanke, Vice Chairman Donald Kohn, governor Kevin Warsh and Mr. Randall Kroszner.
The Fed normally has seven governors but currently has only five because Senate Banking Committee Chairman Chris Dodd (D., Conn.) in a typical partisan infantile action has refused to move on White House nominations to those seats. Wonder why we cannot get things done? Mr. Dodd has also refused to even schedule a vote on the nomination of a sitting governor, Randall Kroszner, to a new term. Mr. Kroszner’s term has expired under rules is permitted to continue serving until a replacement is sworn in. Terms to the Fed board are 14 years, and members can be appointed to serve unexpired terms.
Essentially, Dodd would rather add to an already strenuous and understaffed situation at the Fed than let the President’s nominees even come to a vote. Does Dodd actually wonder why no one thought he might a decent Democratic nominee?
Anyone sitting there complaining why the Fed “isn’t getting more done” ought to send their inquiries to Mr. Dodd.
All governors have votes on the interest-rate setting Federal Open Market Committee, along with five of the 12 regional reserve bank presidents. Mr. Mishkin’s departure is unlikely to affect voting dynamics on the committee as he has always voted with Mr. Bernanke.
What is does mean is that either Bush or the next President will have a host of vacancies to fill on the Fed
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Borders Results: Bland and Good
Borders posted results last night and ,well, not great, but better than expected in some areas…
Borders posted a loss of 53 cents per share vs a 63 cent loss last year. Same-store sales at Borders U.S. superstores, or sales at stores open at least a year, fell 4.1 percent. Total consolidated sales, at $784.7 million, were down 1.0% over a year ago. At Borders domestic superstores, comparable store sales for the period decreased by 4.1%. Without the impact of music, same-store sales at Borders domestic superstores decreased by 1.7% for the quarter. The music decline was expected as Borders has made the decision to dramatically scale back operations there.
The really encouraging news was that debt was reduced to $591.9 million at the end of the first quarter from $722.8 million at the end of the year-earlier quarter and cash flow improved by $133 million.
“Considering the overall conditions, we were pleased,” said CEO George Jones. “The sales environment was tough. We did a much better job managing inventory, we reduced our debt in the quarter by $131 million, and we had a big increase in cash flow.”
Why not be discouraged?
The new website just went up a started yesterday. It will be a profit center this year and if you have not been there, it has been done very well.
Here is a video of the new site:
Also, the new store concept has only begun to roll out. Initial reports are very encouraging and given the rate at which they are opening new ones, one can only assume that what management is seeing it likes, a lot.
All in all, modest results and pretty much what one should have expected given the retail environment out there. That being said, one must look 2 quarters out for any real confirmation that the plan is working. By that time more new concept stores will be open so we will have additional evidence on them and the website will be functioning for 6 months, enough time to make preliminary observations on its effectiveness.
All this assume the company is still independent by then….. by no means a certainty
Disclosure (“none” means no position):Long BGP
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Congress's Incompetance: Now We All Pay
This is not a Democrat or Republican issue. Both have held either the White house or Congress over the last three decades and neither has done anything. Now, we’ll pay….
Today, after announcing a 20% price increases Dow Chemical’s (DOW) CEO Andrew Liveris sai, “For years, Washington has failed to address the issue of rising energy costs and, as a result, the country now faces a true energy crisis, one that is causing serious harm to America’s manufacturing sector and all consumers of energy. The government’s failure to develop a comprehensive energy policy is causing U.S. industry to lose ground when it comes to global competitiveness, and our own domestic markets are now starting to see demand destruction throughout the U.S.”
Although Government inflation numbers have remained relatively flat, chiefly because producers were not passing along prices increase, we are now seeing the end that phenomena. The are not too many products we consume today that do not contain a product DOW produces. That being said, producers now have the following option, decrease profits or increase prices. Guess what they will choose.
There is another, more unpleasant option. Move. Liveris started this at Dow three years ago and it is the reason they have been able to hold earnings constant despite 42% cost increases. In 2002 feedstock costs for Dow were $8 billion. This year that number is expected to hit $32 billion.
Natural gas has almost tripled and oil has doubled in that time frame. We are going to see an exodus of manufacturing out of the US to nations that offer cheaper input prices. We saw this in the labor markets in the 1990’s and the exodus that may begin to happen now will be widespread.
Liveris gave a heads up into what is next….”In addition to these price increases,” Liveris said, “the Company is continuing its aggressive cost-control plan internally and is accelerating its existing top-down competitiveness review for all of its businesses and manufacturing facilities in the light of these new feedstock and energy prices.” Translation? More US job losses
Liveris saw current events happening three years ago and has railed against Congress during that time frame for a national energy policy. Congress rather than acting has done nothing.
Now, we’ll all pay…
Disclosure (“none” means no position):Long DOW
Categories
Congress’s Incompetance: Now We All Pay
This is not a Democrat or Republican issue. Both have held either the White house or Congress over the last three decades and neither has done anything. Now, we’ll pay….
Today, after announcing a 20% price increases Dow Chemical’s (DOW) CEO Andrew Liveris sai, “For years, Washington has failed to address the issue of rising energy costs and, as a result, the country now faces a true energy crisis, one that is causing serious harm to America’s manufacturing sector and all consumers of energy. The government’s failure to develop a comprehensive energy policy is causing U.S. industry to lose ground when it comes to global competitiveness, and our own domestic markets are now starting to see demand destruction throughout the U.S.”
Although Government inflation numbers have remained relatively flat, chiefly because producers were not passing along prices increase, we are now seeing the end that phenomena. The are not too many products we consume today that do not contain a product DOW produces. That being said, producers now have the following option, decrease profits or increase prices. Guess what they will choose.
There is another, more unpleasant option. Move. Liveris started this at Dow three years ago and it is the reason they have been able to hold earnings constant despite 42% cost increases. In 2002 feedstock costs for Dow were $8 billion. This year that number is expected to hit $32 billion.
Natural gas has almost tripled and oil has doubled in that time frame. We are going to see an exodus of manufacturing out of the US to nations that offer cheaper input prices. We saw this in the labor markets in the 1990’s and the exodus that may begin to happen now will be widespread.
Liveris gave a heads up into what is next….”In addition to these price increases,” Liveris said, “the Company is continuing its aggressive cost-control plan internally and is accelerating its existing top-down competitiveness review for all of its businesses and manufacturing facilities in the light of these new feedstock and energy prices.” Translation? More US job losses
Liveris saw current events happening three years ago and has railed against Congress during that time frame for a national energy policy. Congress rather than acting has done nothing.
Now, we’ll all pay…
Disclosure (“none” means no position):Long DOW
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Wednesday's Links
Iran, Sirius /XM, Mackey, Foreclosure
– This ought to make you think twice..no?
– This is criminal, make a decision and let people move on, this has been going on for years
– Just shut up and go away
– So, I guess we can expect more laws now?
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Wednesday’s Links
Iran, Sirius /XM, Mackey, Foreclosure
– This ought to make you think twice..no?
– This is criminal, make a decision and let people move on, this has been going on for years
– Just shut up and go away
– So, I guess we can expect more laws now?
Categories
Wednesday's Upgrades and Downgrades
Upgrades
NGAS Resources (NGAS)- BMO Capital Markets Market Perform » Outperform
WellPoint (WLP)- BMO Capital Markets Market Perform » Outperform
Polaris Inds (PII)- FTN Midwest Sell » Neutral
AGCO Corp (AG)- Credit Suisse Neutral » Outperform Consolidated Comms Illinois (CNSL)- Credit Suisse Neutral » Outperform
Citizens (CZN)- Credit Suisse Neutral » Outperform
BCE Inc (BCE)- UBS Sell » Neutral
Knight Transportation (KNX)- Wachovia Mkt Perform » Outperform
EnergySouth (ENSI)- Brean Murray Hold » Buy
Newfield Expl (NFX)- KeyBanc Capital Mkts Hold » Buy
LCA Vision (LCAV)- RBC Capital Mkts Underperform » Sector Perform
Grupo Aeroportuario del Pacifico (PAC)- Deutsche Securities Hold » Buy
American Axle (AXL)- Citigroup Hold » Buy
Downgrades
United Comm Banks (UCBI)- Sterne Agee Hold » Sell
Liberty Prop (LRY)- Credit Suisse Neutral » Underperform
Duke Realty (DRE)- Credit Suisse Neutral » Underperform
Borg Warner (BWA)- KeyBanc Capital Mkts Buy » Hold
General Motors (GM)- Citigroup Buy » Hold
Anheuser-Busch (BUD)- Deutsche Securities Buy » Hold
BRT Realty Trust (BRT)- Friedman Billings Mkt Perform » Underperform
Categories
Wednesday’s Upgrades and Downgrades
Upgrades
NGAS Resources (NGAS)- BMO Capital Markets Market Perform » Outperform
WellPoint (WLP)- BMO Capital Markets Market Perform » Outperform
Polaris Inds (PII)- FTN Midwest Sell » Neutral
AGCO Corp (AG)- Credit Suisse Neutral » Outperform Consolidated Comms Illinois (CNSL)- Credit Suisse Neutral » Outperform
Citizens (CZN)- Credit Suisse Neutral » Outperform
BCE Inc (BCE)- UBS Sell » Neutral
Knight Transportation (KNX)- Wachovia Mkt Perform » Outperform
EnergySouth (ENSI)- Brean Murray Hold » Buy
Newfield Expl (NFX)- KeyBanc Capital Mkts Hold » Buy
LCA Vision (LCAV)- RBC Capital Mkts Underperform » Sector Perform
Grupo Aeroportuario del Pacifico (PAC)- Deutsche Securities Hold » Buy
American Axle (AXL)- Citigroup Hold » Buy
Downgrades
United Comm Banks (UCBI)- Sterne Agee Hold » Sell
Liberty Prop (LRY)- Credit Suisse Neutral » Underperform
Duke Realty (DRE)- Credit Suisse Neutral » Underperform
Borg Warner (BWA)- KeyBanc Capital Mkts Buy » Hold
General Motors (GM)- Citigroup Buy » Hold
Anheuser-Busch (BUD)- Deutsche Securities Buy » Hold
BRT Realty Trust (BRT)- Friedman Billings Mkt Perform » Underperform
Two billion dollars is a lot of cash for “general corporate purchases”. Sounds more like it is for a “investment in long term opportunity”.
Archer Daniels Midland Company (ADM) today announced that it plans to offer and sell, subject to market and other conditions, 35,000,000 equity units and to grant the underwriters an option to purchase 5,000,000 additional equity units to cover over-allotments. Each equity unit has a stated amount of $50, for a possible aggregate offering amount of $2 billion if the underwriters exercise their over-allotment option in full.
The equity units will initially consist of a contract to purchase ADM common stock and a 5.0% beneficial ownership interest in a $1,000 principal amount debenture due June 1, 2041. Under the purchase contract, holders are required to purchase ADM common stock no later than on June 1, 2011. ADM intends to use substantially all of the net proceeds from this offering for general corporate purposes, including repayment of short-term indebtedness and investment in long-term growth opportunities.
I have wrote in the past about possible ADM targets, the latest being this one about a possible Cuban investment. ADM has been pretty upfront about its desire to expand it capacity in other nations with lower feedstock costs.
One would have to pretty naive to think that a $2 billion capital raising was for anything but.
What will be really interesting is not the “are they or aren’t they” question but the “where” they decide to do it. My guess is they will be taking a trip south…….. outside of our borders…
Companies like Pacific Ethanol (PEIX) and Verasun (VSE) are not cheap by any means. Given their current predicaments, share price aside I would be shocked if ADM expressed interst. The most diversified of the bunch, The Andersons (ANDE) most likely has no interest in being sold. That leave Cuba and Brazil as the most likely targets…
Just popping into my head….maybe a rail investment? ADM already has extensive rail operations and is a huge user of the industry, maybe buying into it and profiting with it would help?
Either way, gonna be fun…
Disclosure (“none” means no position):Long ADM, None
Two billion dollars is a lot of cash for “general corporate purchases”. Sounds more like it is for a “investment in long term opportunity”.
Archer Daniels Midland Company (ADM) today announced that it plans to offer and sell, subject to market and other conditions, 35,000,000 equity units and to grant the underwriters an option to purchase 5,000,000 additional equity units to cover over-allotments. Each equity unit has a stated amount of $50, for a possible aggregate offering amount of $2 billion if the underwriters exercise their over-allotment option in full.
The equity units will initially consist of a contract to purchase ADM common stock and a 5.0% beneficial ownership interest in a $1,000 principal amount debenture due June 1, 2041. Under the purchase contract, holders are required to purchase ADM common stock no later than on June 1, 2011. ADM intends to use substantially all of the net proceeds from this offering for general corporate purposes, including repayment of short-term indebtedness and investment in long-term growth opportunities.
I have wrote in the past about possible ADM targets, the latest being this one about a possible Cuban investment. ADM has been pretty upfront about its desire to expand it capacity in other nations with lower feedstock costs.
One would have to pretty naive to think that a $2 billion capital raising was for anything but.
What will be really interesting is not the “are they or aren’t they” question but the “where” they decide to do it. My guess is they will be taking a trip south…….. outside of our borders…
Companies like Pacific Ethanol (PEIX) and Verasun (VSE) are not cheap by any means. Given their current predicaments, share price aside I would be shocked if ADM expressed interst. The most diversified of the bunch, The Andersons (ANDE) most likely has no interest in being sold. That leave Cuba and Brazil as the most likely targets…
Just popping into my head….maybe a rail investment? ADM already has extensive rail operations and is a huge user of the industry, maybe buying into it and profiting with it would help?
Either way, gonna be fun…
Disclosure (“none” means no position):Long ADM, None
Another week, another post on Sears’ (SHLD) Chairman buying AutoNation (AN) shares.
Lampert added over 500,000 shares bringing his ownership to 69.6 million shares or 38.9% of the total outstanding.
Disclosure (“none” means no position):Long SHLD, none
In three seperate transaction, Leucadia (LUK) added an additional 1.4 million shares of investment bank Jefferies (JEF).
The purchases bring Leucadia’s ownership to 48.585 million shares
Disclosure (“none” means no position):None