Archive for May, 2009

  • NYT Climbs to $5, the Sunday Paper Not the Stock
    , May 5th, 2009 at 10:18 pm

    A few weeks ago, I noted that the price of a Sunday New York Times ($4) was worth more than one share of the New York Times (NYT).
    The good news is that the stock has rallied since it hit its 52-week low of $3.44.
    The bad news is that they’re raising the price of the Sunday paper to $5.
    I wonder who will make it to $10 first.

  • GM plans 1-for-100 reverse stock split
    , May 5th, 2009 at 7:08 pm

    That’ll help get the share price up:

    General Motors Corp. said Tuesday it is planning a reverse stock split that would give shareholders one share of new stock for every 100 shares they currently own.
    The automaker said in a filing with the Securities and Exchange Commission that the deal would be part of an agreement with the Treasury Department in which the government would assume at least half of GM’s debt in exchange for company shares.
    The filing said both sides are still negotiating the terms of the debt swap.
    Under GM’s plan, the U.S. government would get a 50 percent equity stake in exchange for about $10 billion in loan forgiveness. The UAW, for its part, would get a 39 percent stake in exchange for $10 billion in payments to its health care trust in stock. GM would issue up to 60 billion shares as a result of the bond exchange, Treasury loan and VEBA agreement.

    At this point, wouldn’t it be easier to split the Treasury 100-to-1?

  • NICK Update
    , May 5th, 2009 at 7:00 pm

    Just for the record, the stock did volume of 1,200 shares yesterday. Today the stock opened at $3.22 shot to $4.37, a gain of 37%. Then promptly fell back to $3.52 which is a loss of nearly 20%.
    Overall, it’s a gain of 10.7%.

  • Found Deep Inside an SEC Filing
    , May 5th, 2009 at 4:25 pm

    First Financial Bancorp (FFBC) discuss its retirement plans:

    These changes also resulted in revisions to our non-qualified retirement plans. Generally, benefits under previous formulas were frozen and current participants accrue under new formulas. The changes reflect a shift towards account balance formulas and a shit away from traditional annuity-type formulas.

    At least they’re not wasting money on copy-editors.

  • “Don’t Open Your Mouth And Say Dumb Things”
    , May 5th, 2009 at 3:46 pm

    The fun begins at 6:55:

    (Via Joe W and ZeroHedge)

  • Nicholas Financial Reports Earnings of 20 Cents a Share
    , May 5th, 2009 at 12:23 pm

    Excellent news! Our favorite little micro-cap, Nicholas Financial (NICK) reported Q1 earnings of 20 cents per share, the same as last year’s Q1. Revenues increased 3.9% to $13,224,000.
    I’ll have to look more into the numbers when I have a chance, but this is great news. The stock has been up by as much as 37% today!

  • Cognizant Beats the Street and Guides Higher
    , May 5th, 2009 at 11:56 am

    This is turning into a very good day for the Buy List. Cognizant Technology Solutions (CTSH) reported earnings of 42 cents a share, five cents more than estimates. For Q2, CTSH said it expects to earn 42 cents a share and $1.71 for the full year. The shares are still reasonably priced. The stock is up for the sixth day in a row.

  • How David Beats Goliath
    , May 5th, 2009 at 11:41 am

    I have to confess having a love-hate relationship with Malcolm Gladwell. He writes very well and I’m always eager to read his next Big Think-Middle Brow article. I want to like his articles, but whenever I finish one, I feel like I just ate a bowl of whipped cream.
    Gladwell has a winning formula. Take an interesting law of social science (or a humdrum truism) and show how it’s applied in several incomprehensively different scenarios. Self-parody lurks behind the scenes.
    Seeing the scenarios is the payoff of any Gladwell piece. Personally, I fill out a little bingo grid before hand. In each box, I’ll write things like “wine-making in the Yukon” or “hedge funds during the Ming Dynasty.” Then I check off each one Gladwell references.
    His latest article is about how underdogs can win by resorting to unconventional strategies—or as he says, how David can beat Goliath (Biblical reference…bingo!). Seems pretty obvious to me, but now I have to know the connections!
    The connections Malcolm! What are the connections??
    Twelve-year-old girls basketball and Lawrence of Arabia! No, I’m not making this up. Hell, I couldn’t make it up.
    The coach of the 12-year-old girls team decided to press the entire basketball floor and challenge every in-bounds pass. This was an unconventional strategy. The opposing teams got flustered and often turned over the ball, and the weaker team could pull off the upset.
    I have a great deal of sympathy for this type of thinking. How can you look at a game, or any activity, in a different way and challenge orthodoxy? That’s what investing is all about. For example, I think there’s good evidence showing that punting on fourth-down isn’t worth it. But it will be odd for a pro team to start doing that. I’ve also heard that shooting foul shots underhanded is far superior than overhand. Yet what macho ball player will start doing that? The numbers geeks have shown that stealing bases is very risky and you shouldn’t do it unless you’re pretty darn sure you’ll make it.
    The crawl style of swimming was unknown to the West until a competition in 1844 when Native American crushed a bunch of British swimmers who used the preferred-method, the breaststroke. (I used to think the crawl style was called freestyle.) It’s rather disquieting to think that some strategy that has stood the test of time is simply wrong.The economist Joseph Schumpeter said that innovation isn’t merely part of the economy, it’s the heart of the economy.
    So I do enjoy Gladwell’s pieces yet I feel as if he stretches his themes further than the facts allow. For example, the last scenario presents a computer programmer who wins a naval war-game contest by ignoring strategies and crunching the numbers in the rulebook. That doesn’t sound too innovative to me. I wouldn’t call it poor sportsmanship but it’s hardly within the spirit of the law. In that case, I’d rather go with Goliath.

  • Wasn’t There a 10th Amendment?
    , May 5th, 2009 at 11:37 am

    USA Today reports:

    In a historic first, Uncle Sam has supplanted sales, property and income taxes as the biggest source of revenue for state and local governments.

    (Via: Arnold Kling and Nick Schulz)

  • Cayman Islands’ Tax Haven
    , May 5th, 2009 at 10:45 am

    Ugland House is a five-story office building on on South Church Street in the Caymans. Guess how many companies are based there?
    Answer: 18,857.