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May 7, 2009
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Stress Relief
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| Nothing beats an auction. From now until noon Friday, you can bid on exciting items such as getaways, restaurant certificates, sporting and theatre tix, and more! All part of the great Cardinal Bank Charity Classic, benefiting the Inova Kellar Center. Start bidding here. |
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Alex Wong/Getty Images
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"Today, I consider myself the luckiest man on the face of the Earth." OK, well, Tim Geithner hasn't held the press conference revealing stress test results yet, but when he does this afternoon, we bet it'll be Lou Gehrig-esque. He's expected to announce that half of the 19 banks tested will be asked to raise more capital, but it will only be about a $100B combined and some can do it by a stock conversion to common equity. On the news, Citigroup, the weakest of the group, saw its stock rise 16%. The world was buoyed by the anticipated news: The Nikkei hit a six month high, not to mention the S&P climbed 15 points, the Dow 100, and Nasdaq 5.
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Bryan Mitchell/Getty Images
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Ford, meanwhile, continues to create stress for GM and Chrysler. Already the only Big 3 not to request bailout money, yesterday president of the Americas Mark Fields announced a $550M change in direction, converting its leading SUV plant into a small-car haven that will include an all-electric Ford Focus in 2011. The Michigan Assembly Plant was the company's most profitable during the Ford Expedition/Lincoln Navigator heyday but will now be a cog in the company's overhaul to develop affordable electric cars.
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Stephen Lovekin/Getty Images
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News Corp is reporting a 70% drop in net income last quarter, thanks to struggling newspaper, broadcast TV, and MySpace divisions; only cable held its own. But don't sulk for CEO Rupert Murdoch; that's still a $300M net gain, plus he gets to hang with People's sexiest man, Wolverine star Hugh Jackman (left, in case there was any confusion). In what may be a surprise to 18-24 year olds everywhere, MySpace is still profitable; and, in what will be a surprise to nobody anywhere, Murdoch says he wants to make it "really profitable." Side note on newspapers: An 8.3% wage cut saving the NY Times-owned Boston Globe is said to be near.
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Mark Renders/Getty Images
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Private equity firm Kohlberg Kravis Roberts is buying Anheuser-Busch InBev's South Korean Brewery, Oriental Brewery for $1.8B in cash, making it the world's second largest leveraged buyout this year. Debt-heavy transactions have been rare for all, but KKR secured up to $800M (lenders include Nomura, HSBC, JPMorgan Chase and Standard Chartered) for the deal expected to close in 3Q. However, AB-InBev CEO Carlos Brito retained the right to buy back Oriental Brewery within five years, at a premium. Reached for comment, the millions of people who made bad decisions while under the influence of InBev products said "Wait, we can take those back?" then looked around the room and passed out.
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Justin Sullivan/Getty Images
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Cisco CEO John Chambers reports "stabilization" for the first time in many months. Of course, he also reported a 24% drop in profit and a 17% drop in revenue for its fiscal quarter, though it beat Wall Street expectations. News that order rates at the tech bellwether bottomed out could lift spirits in the slumping industry. If that logic isn't hard enough to follow, consider this stabilization includes an anticipated 20% drop in sales for next quarter as well. The news from the world's leading maker of networking equipment piggybacks on last month's positive numbers from Intel.
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LOCAL
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DC-based Blackboard announced yesterday it plans to buy Angel Learning, a fellow education software manufacturer, for $95M in cash and stock. The move should help CEO Michael Chasen and the gang, who broke even last quarter after losing more than $4M during the same period last year. In other local tech news, Rockville-based Vanda Pharmaceuticals landed FDA approval to market its schizophrenia treatment iloperidone, causing its stock to multiply 7x during after-hours trading.
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DC has become an indirect beneficiary of the Obama Administration's increased spending, as organizations are looking to host meetings in the nation's capital, says Washington Convention Center Authority CEO Greg O'Dell, who you remember as CEO of the DC Sports and Entertainment Commission. "There's been some decline in conference attendees because of the economy, but organizations are planning to come here to get to the new Wall Street that's been created." Greg says the 2.3M SF center is adding another 40K SF of meeting space, plans to have a hotel in place by '12, and has a booking list three years deep. Plus, they just set a Guinness World Record for the largest sit down dinner with 16K+ diners.
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Less traffic and more dollars? Works for us. A report by George Mason's Center for Regional Analysis Director and our bud Steve Fuller (that's him at our New Washington event last week) released a study yesterday saying the new Beltway HOT lanes will create $2.7 billion for local economies and 11,800 jobs between now and '13. In Fairfax County alone, the project is expected to bring in $2.33 billion and increase job growth 10 percent.
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This week, Resonate Networks, a new online ad network that targets online audiences based on attitudes, partisanship, issue positions, and more, officially launches. We met COO Andy Hunn, Vice Chairman Sara Taylor, and CEO Bryan Gernert at their Alexandria offices. You may remember Sara as the White House Political Director under 43 after she led the $220 million paid advertising campaign during the '04 election. The company, which includes investors from both political parties, like former Clinton Deputy Chief of Staff Harold Ickes, did swarms of research to target users' online attitudes. "Traditional models may categorize someone as green, but may not know where they stand on offshore drilling," Andy says. "We do, so we can market to them accordingly."
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Deputy Defense Secretary William Lynn, here during his swearing in earlier this year, told the House of Representatives Armed Services Committee yesterday the Pentagon wants to create 20,000 gov't jobs over the next five years in a move to overhaul DoD's acquisition of more than $100 billion of weapons each year, taking work away from contractors." William also said the Pentagon wants stronger correlation between contract fees and performance.
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| Stay Informed! |
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If you read the Scene Bisnow, you'd know what Redskins tackle Albert Haynesworth and our reporter Kristina D'Ambrosio have in common. Well, guess what? You can read it, for free! Subscribe here.
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