Stocks were marginally higher early Friday, as the market tries to extend its three-day winning streak. The recent gains have been spurred, in large part, by renewed hopes the banking crisis has (finally) reached its nadir.Such hopes are based, in large p
From The Business Insider, March 13, 2009:Did the Wall Street Journal scare you out of the market with that DOW 5000 cover? Sucker!
After an 11% three-day pop, the DOW’s over 7000 again. The higher
it goes, the more people will turn bullish.
The stock market has rallied the past three days for any number of reasons, chief among them it was due for at least a technical, “dead-cat” bounce after hitting 12-year lows on Monday. …
Citigroup, which has received $45 billion of U.S. government funds since October, may have had its fill of taxpayer money.
Citi’s chairman thinks the bank does not need any more capital injections from the government and is confident that it will remain in private hands.
“No, I think actually, particularly with the latest conversion … Citi is actually one of the better capitalized banks in the world,” Richard Parsons told Reuters. He also brushed aside any prospect of the U.S. government nationalizing the bank.
Parson’s comments follow CEO Vikram Pandit’s upbeat memo to staff earlier this week, in which he said the bank was profitable in the first two months of 2009 and confident about its capital strength.
Still, considering that U.S. regulators have been working on a contingency plan to stabilize the bank if its problems mount, it’s worth asking if the sudden wave of euphoria over Citi’s recovery prospects may fade with the latest stock rally.
Other Deals of the Day:
* Japanese non-life insurers Sompo Japan Insurance and NipponKoa Insurance said on Friday they would merge operations in April 2010 to cope with falling demand and rising risks.
* A unit of Indian financial services company Reliance Capital is acquiring 51 percent in UK-based exchange and money transfer firm No 1 Currency, a spokeswoman for the Indian unit said on Friday.
* Sara Lee, which is focusing on its core food and beverage business, is examining a sale of its European household and personal-care business, the Wall Street Journal said.
* Swiss Life said on Friday it was in talks with German insurer Talanx over the Swiss group’s 24 percent stake in pensions specialist MLP, which a source familiar with the situation has told Reuters it wants to reduce.
* The Philippines’ dominant telecommunications firm PLDT said on Friday one of its mobile phone firms will buy about a 20 percent stake in Manila Electric Co for 20.07 billion pesos ($414 million).
* Clothing retailer American Apparel is near a deal to sell a 20 percent stake to British private equity firm Lion Capital for about $80 million, the New York Times said citing people involved in the deal.
* Polish pay-TV operator Cyfrowy Polsat sold an 11 percent stake in phone operator Sferia it bought only two days earlier due to objections raised by minority shareholders, it said on Friday.
(Photo: Richard Parsons. REUTERS/Brendan McDermid)
(Refiles to correct Donahoe’s first name to John.)
To sell Skype, or not to sell Skype. That is the question for eBay, and Wall Street has diverging opinions on whether the San Jose company will or won’t unload its Internet telephone service.
Skype was acquired under the reign of former CEO Meg Whitman (now a California gubernatorial hopeful) and touted as a nifty way for eBay’s millions of sellers and buyers to connect. That reality never materialized, and current CEO John Donahoe has acknowledged that synergies between eBay and Skype are nonexistent.
Still, Skype is on a tear, growing at double digits and adding 350,000 global users a day. The five-year-old company logged $551 million in revenue in 2008 — that number is expected to double by 2011 — and is now a subject of great speculation by analysts, who wonder whether eBay plans to spin it off, or hold it close.
Cowan and Co’s Jim Friedland, for one, thinks it’s for sale. Writing in a note the day after eBay held an analyst presentation to outline the company’s three-year plan, Friedland said it appeared “eBay was using the Skype discussion to trigger a bidding war between Google and Microsoft.”
“We believe the asset would be attractive to both Google and Microsoft to enhance their web-based enterprise application services. In addition, Skype’s user base of 405 million, which is particularly strong internationally, would likely strengthen Google’s dominant position in the consumer web app market.”
But Bernstein Research’s Jeffrey Lindsay did not see it that way: “We think the dearth of buyers such as Google or Microsoft will mean that eBay is more likely to spin out part of Skype to the public (like Time Warner did initially with Time Warner Cable).”
Huh. Donahoe, incidentally, has said only that eBay will do what’s best “to maximize Skype’s potential and value.”
Deutsche Bank’s Jeetil Patel opined that, since Skype is performing well, “Management should hold on to this business model” and Credit Suisse’s Spencer Wang said he did not see eBay rushing to sell.
“While we think the company would be open to parting with Skype at the right price (currently valued at $1.8 billion on eBay’s balance sheet), a divestiture of Skype does not appear imminent,” Wang wrote.
(Photo: Reuters)