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Castle Holdings (OTCBB: CHOD) up 60% as Nasdaq (OTCBB: NDAQ) heads further south, the Triple Q's (QQQ) trading just under 21 in mid afternoon trading. At 2:15pm 20.94 -0.08 -0.38% on volume of 51,265,300.
XEROX CORP (NYSE: XRX) Xerox said on Monday, after the close of trading, that the U.S. attorney's office in Bridgeport, Connecticut is investigating its past accounting practices. Shares ended $6.67. At 2:16pm 5.99 off -0.68 down -10.19% on volume of 8,082,500
James J. Houtz, President of Sionix Corporation (OTC Bulletin Board: SINX) yesterday announced their Annual Shareholder's Meeting location has been changed to the Hyatt Regency Hotel and Convention Center in Irvine, California on October 23, 2002 at 10:00 a.m. @11:54am 0.33 0.00 0.00% 3,300
http://biz.yahoo.com/prnews/020905/lath063_1.html
PALM INC. (Nasdaq: PALM) Leading hand-held computer maker Palm said on Monday, after the closing bell, its fiscal first-quarter net loss widened from a year earlier on slower demand, but waxed optimistic about a spate of new products it will unveil ahead of the key holiday shopping season. Shares closed at 76 cents. @2:25pm 0.741 off -0.019 down -2.50% on volume of 47,393,680
FNUSA and or its affiliates has received compensation of equity in SINX and is adding to a significant position in CHOD purchased in the open market. Please visit our web site for section SEC 17b disclaimer.
CONTACT: Financial News USA Tel: +1 714 573 9814 e-mail: info@financialnewsusa.com WWW: http://www.financialnewsusa.com
M2 Communications Ltd disclaims all liability for information provided within M2 PressWIRE. Data supplied by named party/parties. Further information on M2 PressWIRE can be obtained at http://www.presswire.net on the world wide web. Inquiries to info@m2.com.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
This letter from a Congressman to Fannie Mae spells out some of the trouble that awaits FNM.
CONGRESSMAN BAKER LETTER TO OFHEO ON FANNIE MAE DURATION GAP
2002-09-18 14:57 (New York)
(The following is a reformatted version of a letter issued by U.S. Rep.Richard Baker and received via electronic mail. The release was confirmed by the
sender.)
September 18, 2002
The Honorable Armando Falcon, Jr.
Director
Office of Federal Housing Enterprise Oversight
1700 G Street, NW
Washington, DC 20552
Dear Director Falcon:
Early this week, Fannie Mae announced that the duration gap of its portfolio widened to negative 14 months on August 31, 2002, having moved out from negative 9 months at the end of July. Fannie Mae's negative gap was even farther outside management's preferred range of plus or minus 6 months. This disclosure has been the subject of market analyst and media reports; some believe that Fannie Mae, in acting in the markets to rebalance its portfolio,
could exacerbate the corporation's duration gap problem.
Shortly after Fannie Mae's announcement, I received a letter from you stating that "we consider negative 14 months to be a substantial mismatch."
Today, Freddie Mac announced that the duration gap of its portfolio averaged approximately zero months for August 2002, unchanged from July 2002. Over the past year, Freddie Mac's monthly average duration gap ranged between
negative one and plus one month.
Fannie Mae's worsening negative duration gap and the sharp contrast with Freddie Mac greatly concern me.
On December 17, 2001, I wrote you about Fannie Mae's disclosure that for October 2001 the duration gap between its mortgages and debt was a negative 10 months and expressed my concerns with this fact. I requested a complete report about Fannie Mae's duration gap and your supervisory evaluation.
On January 29, 2002, in response, OFHEO stated: "Fannie Mae's approach to managing interest rate risk is to take prudent actions to rebalance the risk of
the portfolio when it moves out of the target range......Depending on the size of the duration gap, Fannie Mae may not necessarily take those rebalancing
actions immediately or in large size. Management will instead take actions progressively over a period of time that may last as long as several months."
"Several months" have elapsed and Fannie Mae's negative duration gap has significantly widened, not narrowed, much less has it been brought back into an
appropriate range.
It appears that your statement - "Management will instead take actions progressively over a period of time that may last as long as several months." - was a misplaced confidence.
In your September 16th letter, you finally outlined steps that OFHEO is taking to address Fannie Mae's mismatch. In my view, OFHEO's recognition of Fannie Mae's problem is overdue and your delaying allowed unacceptable levels of risk to continue for far too long.
OFHEO's calculations of Fannie Mae's risk-based capital requirements for 4th quarter 2001 and 1st quarter 2002, which you provided me this summer, indicated that Fannie Mae had capital surpluses, under all but one scenario. Moreover, OFHEO's annual examination report, issued in June, found that Fannie Mae's interest rate risk management exceeded OFHEO's standards. It now appears
that Fannie Mae's negative duration gap has been a problem for almost a year. How is it possible to have confidence that OFHEO's risk-based capital rule will accurately reveal the corporation's true risk position and performance? OFHEO should focus on implementing the risk-based capital rule as soon as possible, so we can determine its effectiveness.
Sincerely,
Richard H. Baker
Cc: Rep. Paul E. Kanjorski
Hon. Peter R. Fisher
contact
Michael DiResto
Press Secretary
U.S. Rep. Richard Baker, La.-6
michael.diresto@mail.house.gov
(225) 929-7711
Penny King Holdings Corporation, a Delaware Investment Holding Company.
CHOD MOMO:
http://www.investorshub.com/boards/read_msg.asp?message_id=509906
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Financial News USA: FNUSA -- U.S. stocks to watch
TUESDAY , SEPTEMBER 24, 2002 10:43 AM
Orange County, Sep 24, 2002 (M2 PRESSWIRE via COMTEX) -- financialnewsusa.com -- U.S. stocks to watch:
Castle Holdings (OTCBB: CHOD) up 40% as Nasdaq (OTCBB: NDAQ) rebounds, the Triple Q's (QQQ) trading just over 21 in AM trading.
XEROX CORP (NYSE: XRX) Xerox said on Monday, after the close of trading, that the U.S. attorney's office in Bridgeport, Connecticut is investigating its past accounting practices. Shares ended $6.67.
James J. Houtz, President of Sionix Corporation (OTC Bulletin Board: SINX) yesterday announced their Annual Shareholder's Meeting location has been changed to the Hyatt Regency Hotel and Convention Center in Irvine, California on October 23, 2002 at 10:00 a.m.
PALM INC. (Nasdaq: PALM) Leading hand-held computer maker Palm said on Monday, after the closing bell, its fiscal first-quarter net loss widened from a year earlier on slower demand, but waxed optimistic about a spate of new products it will unveil ahead of the key holiday shopping season. Shares closed at 76 cents.
CISCO SYSTEMS INC. (Nasdaq: CSCO) Cisco, the No. 1 maker of equipment that directs Internet traffic, said on Monday after the close that customers are increasingly having a harder time projecting their near-term business prospects in the weak spending environment. Shares ended at $11.96.
NOVELLUS SYSTEMS INC. (Nasdaq: NVLS) Customer orders at Novellus, a maker of semiconductor production equipment, could be even lower than previously projected, Richard Hill, chief executive, said on Monday after the close at the Banc of America Securities conference. Shares ended at $20.77.
TENET HEALTHCARE CORP. (NYSE: THC) Tenet, the No. 2 U.S. hospital operator, said on Monday after the close that it expects operating earnings per share to beat Wall Street estimates, thanks to higher admissions, cost controls and pricing gains. Shares ended at $47.85.
BLACK & DECKER CORP. (NYSE: BDK) Power tool maker Black & Decker said on Monday, after the close, it expects to meet or exceed Wall Street earnings expectations for the third quarter and full year 2002, despite its plumbing products losing some shelf space in a major national store chain. Shares ended at $40.76.
MAYTAG CORP. (NYSE: MYG) Maytag on Monday, after the close of normal trading, warned its third-quarter earnings will fall short of Wall Street forecasts and set production cuts, as it girded for consumers facing a bleak job market to spend less on refrigerators and major appliances. Shares ended at $24.32.
WYNDHAM INTERNATIONAL INC. (WYN) Wyndham is selling 13 hotels to Westbrook Hotel Partners LLC, a private equity fund, for $447 million, The Wall Street Journal reported Tuesday.
Shares closed at 48 cents.
TYCO INTERNATIONAL LTD. (NYSE: TYC) New York prosecutors are scrutinizing financial dealings between Tyco and Warren Musser, a former director of one of its divisions, The Wall Street Journal reported Tuesday, citing people familiar with the matter. Shares ended at $14
ECHOSTAR COMMUNICATIONS CORP. (DISH) U.S. Justice Department staff members have recommended that the government block the proposed $11.2 billion merger of satellite television broadcasters DirecTV and EchoStar because it would be anticompetitive, The New York Times reported Tuesday, citing lawyers involved in the review. EchoStar closed at $17.40.
DISCLAIMER:
FNUSA and or its affiliates has received compensation of equity in SINX and is adding to a significant position in CHOD purchased in the open market. Please visit our web site for section SEC 17b disclaimer.
CONTACT: Financial News USA Tel: +1 714 573 9814 e-mail: info@financialnewsusa.com WWW: http://www.financialnewsusa.com
M2 Communications Ltd disclaims all liability for information provided within M2 PressWIRE. Data supplied by named party/parties. Further information on M2 PressWIRE can be obtained at http://www.presswire.net on the world wide web. Inquiries to info@m2.com.
http://www.otcbb.com/asp/quotes.asp?Sort=4&Quotes=CHOD&Bullet.x=44&Bullet.y=11
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Shaken by Wall Street's growing scandals and sickly profits, foreign investors are pulling the plug on their U.S. investments, adding to an outflow of cash that tops $1.25 billion a day.
Some economists worry that if the exodus goes too far, it could threaten the underpinnings of the wobbly economy.
"This is an enormous problem that will become unsustainable within a very short period of time," said Mark Weisbrot, co-director of the Center for Economic and Policy Research in Washington, D.C.
If the trend continues, some economists warn, inflation could roar back to life. That would force the Federal Reserve to raise interest rates, which in turn would slow the economic recovery.
"Foreigners don't have to sell their U.S. securities to have a tremendous impact on our economy," said James Welsh, who heads Welsh Money Management in Carlsbad. "They just have to stop buying."
Japan, which has long been one of the chief U.S. bond buyers, has already been sharply cutting its purchases.
"A lot of Japanese invested in Enron's corporate bonds, which were supposed to be very low risk," said Takeo Hoshi, a Japanese economist who teaches at the University of California San Diego. "After Enron collapsed, Japanese investors began reassessing the risk of U.S. investments. And each scandal makes things look more risky."
Hoshi added that the Japanese are a bit amused by the current state of affairs. "Japanese businesses have been bad for a decade, and they've been pressured to upgrade their accounting to global standards, which means U.S. standards. But now they see that U.S. standards aren't perfect either."
Concerns are widespread. Net foreign purchases of stock decreased nearly 60 percent in the past year, dropping from $41.7 billion in the first quarter of 2001 to $17.6 billion in the first quarter of 2002.
That outflow has contributed to the burgeoning current account deficit, which measures the flow of trade, stock and bond purchases, direct investment and foreign aid between the United States and foreign countries.
During the first three months of the year, the deficit which has been in the red for years soared to a record $112.5 billion. In just three months, the deficit jumped 18 percent, rising from $95.1 billion in the fourth qu arter of 2001.
For the past two years, the current account deficit has hovered around 4 percent of the nation's gross domestic product a gap that most economists view as dangerous. If the deficit continues at its current rate, it will total an estimated $10.6 trillion by 2010 and $32.5 trillion by 2035.
In the boom times of the 1990s, it was easy to ignore the deficit. Skyrocketing stock prices drew a deluge of foreign investors, eager to pump money into an Enron-style energy conglomerate or a rising dot-com upstart.
Times were so good that the government printed lots of cash helping boost the money supply at a clip of 7 percent per year. In normal times, the Federal Reserve might have worried that such an influx of cash would have sparked inflation. But the Fed apparently did not worry much about inflation, since there was so much demand for U.S. dollars overseas.
However, now that Wall Street's bubble has burst, the supply of dollars which are no longer in hot demand could fuel inflation. During the past few months, the euro has become more popular than the dollar, rising from 85.88 cents in January to 99.90 cents on Friday.
The decline in the value of the dollar should help companies export more goods abroad. But if the dollar drops too fast, it could scare investors and spark the Fed to take strong remedies, including a sharp spike to interest rates.
"The less attractive the U.S. appears, the more rapid the dollar will go down," said UCSD economics professor Miles Kahler, who specializes in capital flows. "We could have some precipitous dives."
The dollar's decline and the pullback in foreign investments come at a bad time for the federal government, which needs foreign cash to help make up for the growing budget deficit.
During the first eight months of this year, the government is projected to incur a budget deficit of $140 billion. That compares with a budget surplus of $140 billion during the first eight months of 2001.
"Until recently, U.S. fiscal policy was very orderly. But with the government heading into deficit, a major concern is whether foreigners are willing to hold dollars," said Tom Lieser, chief economist at UCLA's Anderson School of Business. "The strength of the euro has got to be more attractive than dollars to institutional investors."
To finance the trade deficit, the United States has been borrowing $450 billion a year from abroad, largely through the sale of Treasury securities. To raise more money to cover the budget deficit, the Treasury will need to issue new bonds. But U.S. bonds have not been doing well lately, since the Fed has pushed interest rates so low to stimulate the U.S. economy. And the declining value of the dollar is also making bonds less attractive to foreigners.
"The dollar's decline complicates the Fed's management," Lieser said. "Typically, the Fed wouldn't consider raising interest rates at a time when the economy is still shaky. With the dollar declining, though, it might be pushed closer to that."
A rise in interest rates would probably attract more foreign investors to U.S. bonds, offering the promise of higher returns. But if interest rates go too high, it would add to the federal debt, so that interest payments alone could soon start choking the economy.
"The big policy debates for politicians recently have been over the national budget deficit or the Social Security gap, but those pale in comparison to the current account deficit," Weisbrot said.
"With Social Security, you're talking about a problem that amounts to 1 percent of our GDP, which could turn into a major problem 40 years from now. The current account deficit is much larger and could create major problems this decade."
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Time for an investigation into the Treasury Department?
The Investigative Mission
At the close of the Civil War, between one-third and one-half of all U.S. paper currency in circulation was counterfeit. On July 5, 1865, the Secret Service was created as a bureau under the Department of the Treasury to combat this threat to the nation's economy. In less than a decade, counterfeiting was sharply reduced.
During its early years, the Secret Service investigated many cases unrelated to counterfeiting. These cases included the Teapot Dome oil scandals, the Ku Klux Klan, Government land frauds, and counterespionage activity during the Spanish-American War and World War I.
As other federal law enforcement agencies were created, the investigative jurisdiction of the Secret Service became limited to Treasury-related crimes.
With the recent threats to national security and corporate scandals which abound, attention has been diverted away from government corruption within the treasury department.
What is the current financial statement of the US Government?
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Arthur Andersen is facing a $1bn (€1.02) lawsuit from a former client that is accusing the collapsed accounting giant of fraud and negligence.
Peregrine Systems, a software maker that sought bankruptcy protection on Sunday, has filed four charges demanding $250m for each alleged failure. Peregrine sacked Andersen in May.
The lawsuit filed in a California court names Arthur Andersen Germany, Arthur Andersen Worldwide and audit partner Daniel Stulac. Andersen was ruined by its association with Enron, being convicted of obstructing justice by a Houston jury.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
The HSBC banking group is to be fined €2m ($1.9m) by Spanish authorities for running a series of opaque bank accounts for wealthy businessmen and professional football players, according to Spain's El Mundo newspaper yesterday.
The fines were reportedly due to be made under money laundering rules and are understood to involve 138 accounts containing £40m.
HSBC had been informed of the fines by the finance ministry, whose commission for the prevention of money laundering reportedly argued that the bank had an obligation to reveal the names of the account holders, El Mundo said.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Lucent Technologies Consensus Recommendation: Sell
Sep 24, 2002 (The Penny King's Broker Summaries) --
Company: Lucent Technologies (nyse:LU)
Consensus Recommendation: Hold
(Strong Buy: 0, Buy: 0, Hold: 0, Underperform: 18, Sell: 22)
Quarter Consensus Estimate [Q4]: -0.38
FY Consensus Estimate [FY2002]: -0.97
Next FY Consensus Estimate [FY2003]: -0.55
Industry: Telecom Equipment
http://www.thepennyking.com
The record volume of IPOs during the late '90s doesn't compare to the number of companies created as hot money poured into the venture capital industry.
NEWS FOR LU
It's fish or cut bait for venture capitalists.
Techs push Nasdaq below 1,200; first time since '97
Bottomless pit threatens phone industry.
There were 12,000 U.S.-based companies backed by venture capitalists between 1998 and 2002, according to Thompson Venture Economics. Of those, only 1,000 have gone public or merged. Hundreds of the rest have shut down. According to VentureOne, about one fifth of companies financed between 1999 and 2000 have shuttered their doors.
Those that still exist have held out stubbornly. Their backers have also helped hold the line. But increasingly, the realization that IT spending isn't turning around until beyond 2003 is sinking in.
Days like Monday, when the Nasdaq broke through 1,200 for the first time in six years and companies like JDS Uniphase warned that first-quarter sales could be as much as 10 percent off prior goals, underscore the harsh reality.
Some venture investors -- the moneybags for the many start-ups created since '98 -- are now cutting their losses and grudgingly accepting market prices. It's a fish-or-cut-bait period for VC units, especially those within corporations or financial institutions.
The average financing in 2002 for storage companies was $15.7 million, while the median acquisition price of a storage company has been around $13 million, according to James Montgomery, co-CEO of Digital Coast Partners, a boutique investment bank. Translation: A venture investor spent $15.7 million for about a third of a company, only to sell the entire company for $13 million. Ouch.
Just this week, San Francisco-based venture firm Saints Ventures sealed a deal to buy a venture portfolio consisting of 13 start-ups from a mutual fund company that's reducing their private-company investments.
Financials and the mutual fund were not disclosed but the mutual fund had poured $100 million into the start-ups. Altogether, these 13 start-ups had more than $1 billion invested in them during the heyday.
The mutual fund company is just one of many financial institutions that formed venture capital arms in the '90s in order to take advantage of the compressed time between late-stage investing and IPO. "Between 1998 and 2000, there were 1,600 new venture funds created," said Ken Sawyer, a former investment banker who started Saints just after the Nasdaq started to tumble.
Since the meltdown and regulatory changes, however, these financial institutions have had a hard time finding buyers. Much of that challenge is due to the obvious fact that the reliable buyers of the past are now bankrupt, or under investigation. See our new scandal sheet. Others, like Symantec are still digesting prior acquisitions or, like Lucent are continually warning of shortfalls.
Buy now, or let them suffer
Sure, tech companies, like Sun Microsystems have said they're looking to buy smaller tech companies to expand their product lines. There are also the usual suspects, like Microsoft and Cisco Systems who've earned reputations as acquirers. Even USA Interactive has been pretty vocal this year about its $9 billion in cash to spend.
But how much incentive is there for tech companies to buy when they can just wait until these start-ups go out of business. Just Monday, software company Peregrine (PRGN: news, chart, profile) filed for bankruptcy protection.
It may be the case that sellers have to become really motivated. Apparently, they are.
"Our phone has been ringing off the hook since Labor Day from venture capitals wanting to sell their portfolio companies," said Montgomery. "Many of these companies financed in the past five years are just product lines and buyers (tech companies) are looking to extend their own product lines." Montgomery, who just sold Encore Software to multi-media company Navarre for $10 million in cash and other considerations, said he's working on selling 25 companies between $10 million and $50 million, with a formal deal to be announced every couple weeks.
By dealing with individual sales, however, there is a higher risk that deals don't get done. After all, buyer skepticism remains high. "It's tough to know what you're buying," said Jesse Reyes of Thompson Venture Economics. That's why merger activity is elusive despite the relatively low prices.
Selling individual stakes in start-ups is also a risky purchase, and ostensibly a tough sale.
"The smart money is pounding the pavement in search of a new generation of greater fools," said Peter Cohan, author of e-Stocks: Finding the Hidden Blue Chips Among the Internet Impostors.
As an angel investor, Cohan had an opportunity earlier this year to purchase founder's stock in a formerly 'hot' software venture. "After a few months of due diligence, the company co-founder, who was seeking to cash in some of his founder's stock, ended up on the wrong end of the double-digit percentage layoff."
That's why companies like Saints Ventures can offer to haul out the whole pile of VC trash. But such sanitation services come at a price.
Sawyer said that in general, these VC portfolios are trading at a discount between 80 and 95 percent off the invested dollars.
The 13 companies that Sawyer just purchased aren't all losers, but they're definitely not all winners. In fact he'd value several as worthless. But he's hoping for a few home runs to drive the returns.
One company is TellMe, an Internet start-up that had its fifteen minutes of fame in October 2000 when it raised more than $100 million and was valued at nearly $1 billion.
Dan Schryer, founder of Venture Asset Group, which is managing the sale of Exodus venture portfolio of 17 companies, believes Saints' strategy should be a last-resort for companies seeking to dispose of their venture assets. He thinks by working with each individual company, he can extract more value. He hopes to generate about $20 million from selling the companies in the Exodus portfolio, which the defunct hosting company put $200 million into.
Financial targets
Rather than target venture investments within corporations, like Intel,Dell Computer, and Hewlett-Packard (which may or may not be likely sellers of an entire portfolio), Sawyer is targeting VC units of financial institutions, partly because he believes they're increasingly seeking to unload these investments in bulk.
One venture-capital newsletter, called The Private Equity Analyst, reported this month that CS First Boston has taken steps to auction off interest in buyout funds valued at $150 million. This would be the first of three batches of net asset value of $400 million. CSFB was not immediately available to comment.
There is also speculation that DB Capital Partners, the private equity arm of Deutsche Bank Group, is considering selling some of its private-equity portfolio. Deutsche Bank would not comment.
To be sure, some financial institutions are aggressively building their private-equity practices. The official word at JP Morgan Partners is that it's not scaling back any of its private-equity investments or selling off any assets.
JP Morgan Partners said it has raised $6.5 billion from its parent company in capital for a new private equity fund which is expected to be closed to new investment in October.
JP Morgan Partners, with 150 employees around the world, plans to allocate more funds in leverage and management buyouts as opposed to early-stage and later-stage venture investing. One of JP Morgan Partners' seed investments was JetBlue.
"There are some investment banks and corporate groups that take a long-term view and will still be around through thick and thin," said Jesse Reyes of Thompson Venture Economics. "But a good portion are just tourists." And just like many tourists, they've left a lot of garbage for haulers like Saints Ventures or other VC firms to clean up.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
If anyone gets any faxes about this company please PM me.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Heading in the right direction:
http://biz.yahoo.com/prnews/020917/nytu015_1.html
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Nice news:
http://biz.yahoo.com/bw/020917/170514_1.html
Penny King Holdings Corporation, a Delaware Investment Holding Company.
A group of U.S. manufacturers said on Wednesday it has requested a meeting with U.S. Treasury Secretary Paul O'Neill to ask him to explain remarks he made on Tuesday about the value of the U.S. dollar.
When asked by Reuters if O'Neill would grant a meeting, a Treasury spokesman declined to comment.
Speaking on CNBC television on Tuesday, the Treasury chief departed from his usual strong dollar line, and said he believed the currency's recent trading ranges against other currencies seemed "reasonable".
"This morning as I looked at what's happening in the foreign exchange, I saw the euro (near 96 cents) and the yen around 123. We've traded in a range that seems reasonable to me," O'Neill said on Tuesday.
The Coalition for a Sound Dollar complained O'Neill's comments indicate he believes there is no reason for the dollar to weaken further even though the manufacturers believe it is still too strong, putting pressure on the international competitiveness of U.S. companies still suffering from last year's recession.
"The markets will interpret the Secretary's remarks as an indication of where the dollar should be pegged, impeding further necessary downward adjustment," said Frank Vargo, spokesman for the coalition.
He said over the past two years, more than one million jobs have been lost in the U.S. manufacturing sector, mostly in connection with the stronger dollar.
The dollar was last trading at 0.9770 against the euro and 121.64 against the yen.
The manufacturers have previously had meetings with the U.S. Treasury to complain about the strong dollar but U.S. officials do not appear to have changed policy, maintaining the line that they believe in a strong dollar, the value of which should be determined by markets.
Data out earlier on Wednesday showed there may be some improvement in exports because of the dollar's weakness. The Commerce Department said the trade gap for July narrowed, led by record exports of U.S. autos, as well as strong exports of civilian aircraft and food, feeds and beverages. Total exports reached their highest level since June 2001.
The dollar lost roughly 4 percent of its value against other currencies on a trade weighted basis between April and June this year, according to a Lehman Brothers estimate. But the manufacturers say the currency is still 20 percent stronger than in 1997.
Japanese shares traded in the United States rose on Wednesday on the Bank of Japan's surprise plan to buy shares directly from banks, but the wider ADR market slumped on grim earnings outlooks for financial and technology companies.
Many of the largest percentage gainers on the New York Stock Exchange were Japanese American Depositary Receipts, following the BOJ's announcement of the unprecedented move that came over a week after Japanese stocks fell to 19-year lows.
Japan's banks have huge shareholdings on their books, which they are aiming to cut in order to reduce their vulnerability to market fluctuations.
"It's a case of institutions and pension funds coming to the end of quarter this month" and selling losers such as Alcatel, which has dropped 16 percent this quarter, said Barry Hurwitz, senior ADR trader at HSBC Securities in New York.
Normally these quarter-end influences come into play at end of the quarter. Nobody's going to be brave in this market, unfortunately."
Latin American issues traded on U.S. exchanges fell as Brazil's markets weakened on pre-election jitters despite Central Bank President Arminio Fraga's affirmation that Brazil's debt was sustainable and the economy was in good shape.
Prolonged difficult conditions and continued internal slip-ups at J.P. Morgan Chase could ultimately force the bank into a merger, said UBS's Glossman. The combination of J.P. Morgan and Chase Manhattan was heralded as the creation of a powerful buyer of other companies, not a seller. Likely buyers include Citigroup and Bank of America, either combination would create the first trillion dollar asset bank in the United States, putting the new institution on a greater competitive footing with large, already consolidating Japanese banking conglomerates.
Debt rating agencies S&P and Fitch cut their rating on J.P. Morgan Chase debt after the warning, and analysts on Wednesday slashed earnings estimates and recommendations.
Prosecutors froze $600 million of Kozlowski assets mostly cash and securities. That means the defendants cannot use this money as collateral toward their bail.
Tyco is in the process of seizing most, if not all of Kozlowski's assets, including a $17 million Fifth Avenue apartment, a $7 million Park Avenue apartment he turned over to his ex-wife, a $5 million Nantucket home and a $30 million compound in Boca Raton, Florida.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Growing concerns over the operational performance of two financial heavyweights has manifested in modestly wider credit spreads in some key derivative markets Wednesday.
Interest rate swap spreads are one to two basis points wider against comparable Treasury yields across the entire swaps curve in moderate trading Wednesday, following moves by Standard & Poor's and Fitch Ratings to strip J.P. Morgan Chase & Co. of its double-A ratings late Tuesday.
The ratings downgrades, which followed the bank's announcement of a sharply lowered third quarter earnings forecast, coincided with some increased scrutiny of mortgage giant Fannie Mae in the wake of recent news about a wide mismatch between its liabilities and assets.
Credit protection spreads for both names was wider amid active two-way trading in the credit derivatives market Wednesday, said traders. Five-year default swaps on J.P. Morgan were quoted 10 basis points wider at around 95 basis points or $90,000 per annum for $10 million of protection for J.P. Morgan bonds. Quotes for Fannie Mae were around 31 basis points, out from Tuesday's close of 27 basis points for five-year protection.
Taken together the problems at these two institutions, whose counterparty positions are among the most widespread on Wall Street, have refocused attention in swaps and other fixed income markets on the specter of systemic risk.
"These two events raise the question as to what other exposure risk and credit concerns exist within financial markets," said Brad Stone, derivatives strategist at Barclays Capital in New York. "There is more upside risk in swap spreads given the current environment."
Both J.P. Morgan and Fannie Mae are huge counterparties to other financial institutions trading interest rate swaps. Fannie regularly uses swaps to hedge prepayment risk on its mammoth mortgage portfolio, while J.P. Morgan is the largest player in terms of notional holdings in the derivatives market.
Of the $50.1 trillion in notional derivatives outstanding at insured commercial banks, the bank accounted for just over half of the total at the end of June, according to the latest OCC Bank Derivatives Report compiled by the Office of the Comptroller of the Currency. That amount includes both foreign exchange, commodity and interest rate derivatives.
The ratings downgrade is expected to force J.P. Morgan' counterparties to tighten their credit standards. Noting that the "severity of the problems is somewhat surprising," Morgan Stanley analysts said in a research note Wednesday that they "would expect increased scrutiny of JPM's derivatives franchise in the near-term."
Very few market participants say a tightening in credit standards by J.P. Morgan's swaps counterparties could create settlement problems in the interbank swaps market because swaps are regularly marked to market and are usually fully collateralized between counterparties.
But many nonetheless recognize that credit concerns among the banking counterparties that participate in the swaps market do create some pressure for wider swap spreads, especially given the recent weakness in equities markets.
With the 10-year swap spread - quoted at 54.25 basis points Wednesday versus Tuesday's late close of 53.25 basis points - "swap spreads are too narrow given the current (credit) risk environment," said Michael Cheah, portfolio manager at SunAmerica Asset Management in New York. "I would be surprised if other financial institutions do not disclose poor credit exposures given how widespread credit problems in the past year have been."
The degree of spread widening Wednesday was muted when compared with the previous episode of credit concerns regarding J.P. Morgan and Citigroup seen in late July. During a period of four days then, the 10-year swap spread widened twelve basis points. The volatile conditions abated after J.P. Morgan issued a statement denying a market rumor that it was experiencing liquidity problems.
The relatively cautious reaction of the swaps market Wednesday was underlined by the three month London Interbank Offered Rate for J.P. Morgan being quoted at 1.82%. This was in line with the 11:00 a.m. London setting and indicated that other participants in the cash market were not charging the bank a premium to borrow cash following its downgrade.
"Spread widening has been very muted," said Robert Podoresfsky, chief derivatives strategist at Fleet Global Markets in Boston. With J.P. Morgan well capitalized and swap trades underpinned by collateral agreements, the issue of counterparty risk is well contained within the interbank market, he said.
Another diluting effect is the current surge in corporate bond issuance. Around $12 billion in new issuance has been announced or priced so far this week and swap dealers expect around half of that to be swapped. Corporate bond issuers often swap their fixed rate exposures into floating rate payments, narrowing the swaps spread.
The swelling "pipeline of corporate issuance supports tighter swap spreads," said George Ooman, derivative strategist at Credit Suisse First Boston in New York. If the pipeline remains healthy until the end of the month, CSFB expects the 10-year swap spread to trade in a 50 to 60 basis point range with higher levels of issuance tending to push the spread below 55 basis points. However, " credit concerns are a key influence upon the swap market," said Ooman.
Indeed, the fact that spreads have widened in the face of such issuance suggests the J.P. Morgan concerns are weighing to some extent on the market.
As for concerns over Fannie Mae's mortgage portfolio, which experienced a record wide 14-month gap between assets and liabilities in August, Fleet Boston's Podoresfsky said, "the swap market is well versed in the mechanics of mortgage accounts frequently rebalancing their portfolios."
Fannie Mae needs to buy exposure to low-risk fixed interest flows, which can be achieved by receiving fixed in swaps. Yet there is a question of just how much hedging activity Fannie will undertake in swaps to close the gap, especially given the concurrent J.P. Morgan concerns and the fact that the Office of Federal Housing Enterprise Oversight - Fannie's regulator - is requiring weekly reports from OFHEO examiners on the company's exposure to interest-rate risk. Also, given that Fannie knew of the duration gap two weeks before publicizing the fact, many traders believe it may have already completed the bulk of its hedging.
Whatever hedging activity that Fannie and other mortgage investors do undertake is more likely to involve purchases of Treasurys rather than receiving fixed rates of interest in swap contracts, some analysts say. The current low level of swaps over underlying Treasury yields means that "mortgage hedgers will likely choose Treasurys if rates keep declining," said Barclay's Stone.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
LU will close below $1.00 today. 2x NPTBV is under .30. They won't return to profits for another year.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
GE's Total Stockholder Equity $58,727,000,000
Net Tangible Assets $22,319,000,000
Real Net Present Tangible Book Value Per Share: $2.24.
Will GE add 200% to its net present tangible book value during the next 24 months with downgrades for its assets pending?
Short 72.5MM shares daily from hedge funds.
http://biz.yahoo.com/rb/020916/people_welch_8.html
Credit quality of ABS set to weaken further in US
Piers Townsend - 16 Sep 2002
A record number of rating downgrades dominated the US asset-backed securities (ABS) market in the first half of the year and the trend is set to continue, according to Moody's, the ratings agency.
Moody's made 502 downgrades of US ABS in the first six months of the year, representing 37% of the total downgrades since the market's inception in 1985. There have been 468 upgrades since then, compared with 1363 downgrades.
In the first half of this year there were just eight upgrades.
Collateralised debt obligations (CDOs), in which debt instruments such as high-yield bonds and loans are pooled and used to back the issuance of new notes, have been among the worst hit. They accounted for 80% of the downgrades. Julia Tung, an analyst in Moody's structured finance group, said: "In the second half of 2002 we anticipate a significant number of downgrades of CDOs, as well as securities backed by franchise loans and aircraft leases - sectors that have been under stress since 2001."
Most of the downgrades have been the result of deteriorating assets in the pools that back ABS issues. Tung said that this trend differed from previous years. "Prior to the first half, 38% of downgrades were due to the downgrading of the credit enhancer," she said. The credit enhancer helps increase the creditworthiness of the assets in the pool so that the osier can sell more highly rated notes to investors. Less than half of all downgrades before the first half were related to asset performance, Tung reported.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Good Morning: Cash drain on GE: Deutsche Bank has trimmed its US operations with the sale of one of its leasing business to General Electric, the US conglomerate, for $2.9bn (€3bn).
Deutsche is selling a large portion of Deutsche Financial Services, a US subsidiary that specialises in commercial finance. The German bank will retain US consumer finance operations.
Josef Ackermann, chairman of the Deutsche's executive committee, said: "This is an important further step in our strategy to focus on core businesses."
With tough economic conditions in Europe and the US taking their toll, Deutsche has been seeking to sell businesses and investments that it considers non-essential as part of a drive to cut costs and improve profitablity.
Deutsche has said that it also plans to sell parts of its passive asset management business. Last year it sold a European auto-leasing business to Société General.
Under the terms of the deal GE's Commercial Finance subsidiary will pay Deutsche $2.9bn in cash, a price that includes the leasing business' debt. Neither company would say how much debt is involved.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Total Stockholder Equity $920,000,000 Net Tangible Assets $553,000,000
Other Assets $7,309,000,000 to be written off eventually...
Real Net Present Tangible Book Value per share: 0.161
100 million shares changed hands today.
Shorting down to .32. Lucent will not add 200% to net tangible book value any time within the next 24 months.
Expect large stockholders to experience the following with LU:
Bayerische Landesbank, JP Morgan Chase and Lehman Brothers are set to become majority owners of media rights to the Formula One international motor racing championship.
The European Commission’s competition directorate acknowledged last week that it had been notified of the banks’ intention to acquire control of SLEC, the holding company set up by Formula One supremo Bernie Ecclestone.
The share transfer is expected to be completed after October 3, when it should have been cleared by the competition directorate.
The banks will take over Formula One shares that were pledged as collateral for $1.6bn (€1.57bn) of loans. They lent the money to Kirch, the German media group headed by Leo Kirch, so it could buy 75% of SLEC from Ecclestone and EM.TV in 2001. Kirch became bankrupt this year.
The shares will be apportioned pro rata: Bayerische Landesbank is the biggest lender, having given $1bn. JP Morgan Chase and Lehman Brothers lent $300m each.
The banks can try to recoup their losses by floating the company; selling it to a media group such as News Corporation; or to car manufacturers that sponsor race teams. The carmakers, which access a global television audience through sponsorship, were opposed to the initial Kirch deal, because the German company wanted to show Grand Prix in pay-per-view format.
SLEC is under contractual obligations and financial constraints that have squeezed its ability to generate cash. Some revenues are ring-fenced for bondholders of an asset-backed securities issue, while race participants are not contracted to Formula One beyond 2007. They are discussing setting up a rival championship to gain a bigger slice of the profits than their current 47%.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
British Energy, the UK nuclear power company, has suffered its second credit rating downgrade in a month on fears of bondholder losses.
Moody's rating for the company, which has secured emergency funding from the government but has yet to secure a future after September, fell to B2 from Ba3 on Monday.
The previous rating action - also a downgrade - was made just 10 days ago after the UK government agreed a £410m (€651m) working capital and collateral facility with British Energy that falls due on September 27. Investors fear that the company will default on its obligations and may become bankrupt after that time.
Moody's said: "The government's support to date has been limited to a short-term liquidity facility and no assurance has been given that bondholders will not suffer a loss." The rating agency left the new rating on review for downgrade, which implies that the next move will be another negative one.
Moody's analysts said: "The government has made it clear that protecting value for investors in British Energy is not its prime consideration." The agency concluded: "In the absence of a full guarantee from the UK government it is unlikely that this credit will return to investment grade." If the company default and bondholders suffer losses, the rating is likely to Caa or lower.
The downgrade took place on the same day that Moody's issued a gloomy forecast for bondholders of companies involved in distressed exchanges such as debt-for-equity swaps. The report, which focused on the dangers faced by bond investors in the distressed telecoms sector, came days after MobilCom, the German wireless operator, was rescued by an emergency overdraft from the state. MobilCom's future was thrown into doubt when majority owner France Télécom decided last week to stop funding the company.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
A quartet of leading Wall Street banks have unleashed more than 800 new Sell ratings on US-listed companies as they usher in new equity ratings. The surge of downgrades represents a 25-fold increase in Sell recommendations from the four firms in just over one month.
Credit Suisse First Boston, Salomon Smith Barney, Lehman Brothers and Bear Stearns had Sell or underperform ratings on 34 stocks in August. That has sky-rocketed to 833 as new ratings systems have come in, according to data from Thomson Financial’s First Call.
More downgrades are expected as Goldman Sachs and JP Morgan reform their ratings systems. Morgan Stanley, which changed its ratings system in March, rates 181 companies Underperform, compared to just three in February.
Traditionally, banks have issued Sell recommendations on just 1% to 2% of the companies they covered – leading to criticism that they were too frightened of losing business from corporate clients to sanction negative reports.
But in the new climate of industry reform and pursued by government investigations, many of the biggest Wall Street names are sending negative reports on 20% to 28% of the companies they rate.
The glut of Sell recommendations has been timed to coincide with the introduction of rules on analysts’ disclosure.
From last week, banks have to state in their research reports how many companies they rate Buy, Sell and Hold or Overweight, Market Weight and Underweight, to comply with reforms brought about by the National Association of Securities Dealers, the New York Stock Exchange and the Securities and Exchange Commission. The rules also demand that banks simplify their rating systems to three rating tiers, rather than four or five.
Two weeks ago, CSFB rated only 10 companies a Sell – out of the 1,059 it rates, according to Thomson First Call. As of last Monday, the bank rated 205 or 19% of its covered companies a Sell. SSB had 30 Sell recommendations two weeks ago. Last week, that number changed to 281 or 26% of the companies it covers. The number of Bear’s Sell recommendations rose from nine to 113.
One reason for the radical changes is many banks have changed the way they assign ratings by moving to the three-tier system, rather than call whether the share price is likely to move up or down over the next 12 months. Analysts have to rank companies in their sector against each other and split them into three tiers.
The top tier in a sector will be rated Overweight. These stocks will be expected to outperform the sector average. The middle tier is rated equal or market weight and the bottom tier is rated underweight – under performing the sector average.
Some banks say there will be a minimum of 15%-20% of companies in this bottom tier. CSFB, SSB, Bear Stearns and Morgan Stanley are among the banks using this system.
Charles Schwab, the US broker, and Bear Stearns were among companies that SSB downgraded to underperform last week.
Not all banks have seen their rating distributions change so radically. Deutsche Bank changed to a three-tier Buy, Hold, Sell system last week.
But it has not changed to the relative rating system others are using. Only 18 of the 643 companies it rates are in the Sell category.
Banks also have to declare what percentage of companies in each category they have investment banking relationships with.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
LAS VEGAS. PurchasePro.com Inc.
(NASDAQ:PPRO), the one-time Wall Street darling whose shares once traded as high as $224, on Thursday said it filed for
bankruptcy protection and agreed to sell its assets to
privately held Perfect Commerce.
The online marketplace company, whose shares closed at 22
cents on the Nasdaq on Thursday, also said it reached an
agreement with the Securities and Exchange Commission to settle
the regulators' investigation into the company and its dealings
with other technology firms.
PurchasePro rose to fame in 2000 during the dotcom go-go
days when businesses rushed to set up online marketplaces as a
way of saving money on purchases by linking to suppliers over
the Web.
But marketplaces didn't take off as quickly as PurchasePro
and its rivals -- including now troubled Commerce One Inc.
(NASDAQ:CMRC) and Ariba Inc. (NASDAQ:ARBA) -- had anticipated. The Internet bubble burst and the shares of online
business-to-business (B-to-B) software companies plummeted.
While the majority of marketplaces soon went out of
business, some, like PurchasePro, have tried desperately to
hang on.
But analysts said it was only a matter of time.
"The demise of PurchasePro is emblematic of how over-
inflated the promise for this market was," said Joshua
Greenbaum, head of Enterprise Applications Consulting in
Berkeley, California.
"There weren't enough savings to justify the technology
adoption that every company had to go through," Greenbaum
added.
In the B-to-B heyday, brokerage firm Merrill Lynch forecast
in a February 2000 report that 15 percent to 20 percent of
electronic commerce will be transacted through online
marketplaces, implying a revenue opportunity of approximately
$400 to $500 billion by 2003.
SETTLES SEC INVESTIGATION
PurchasePro said in August it was being investigated by the
SEC and that it was providing details of its transactions with
other companies to regulators. The company didn't disclose the
purpose of the investigations, but said it was cooperating
fully with them.
One such partnership under investigation, however, was
PurchasePro's relationship with AOL Time Warner Inc. (NYSE:AOL), through which AOL licensed and sold PurchasePro's
business-to-business software.
AOL said in July that its accounting practices were under
investigation by the SEC for a series of unconventional
advertising deals that occurred in 2000 and 2001.
PurchasePro did not provide the financial terms of the sale
to Palo Alto, California based Perfect Commerce, which makes
auction software. It said the sale was still to be approved by
the U.S bankruptcy court in Nevada.
PurchasePro said it would continue to operate during the
reorganization process and that it had the option of obtaining
up to $750,000 debtor in possession financing.
AOL Shares Short 70.1M
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Look at it this way. If I offered to sell you a penny for a two cents would you pay it to me? Even if I massaged it enough to rub the copper off the surface and showed you that Zinc might be worth more than copper in the near future, or told you how rare of a penny it might become, would you buy it from me for two cents?
Let's look at your ABS and compare methods of perception.
Period Ending May 2, 2002
Total Stockholder Equity: $5,773,000,000
Net Tangible Assets: $4,374,000,000
Total Outstanding Shares: 407.0M
Reported Book Value (on the surface): $14.18
Real Net Present Tangible Book Value Per Share (NPTBV): 10.74
Therefore, the market makers (anal-ists), and management are stating a 31.945% higher than actual real net tangible per share. The Market price closed today at Last Trade
4:01pm $27.02 Change +0.32 (+1.20%) Prev Cls 26.70 Opened
26.27 On Volume of 1,363,700, which is really 681,850 shares actually changing hands (another deceptive mathematical manipulation in the markets.
At two times NPTBV the stock is valued at $21.48 which is below its Sep 4 price when it hit a new 52-week low $24.20.
Your target price of 16 as a buy is still 160% above NPTBV, but using our formula, we would short the stock until it reached our price target, but cover on rapid upticks.
Here are the institutional money managers, their holdings as of 31 March 02, how much they have to lose if the stock went to its real values, that keep ABS artificially above both our price targets by trading amongst themselves in large block transactions:
Capital Research and Management Company 39,256,500 9.64 $1,094,863,785
Legg Mason Inc. 28,118,641 $784,228,897
FMR Corporation 19,922,805 $555,647,031
Brandes Investment Partners L.P. 14,277,043 $398,186,729
Barclays Bank Plc 12,753,707 $355,700,888
Franklin Resources, Inc 11,914,499 $332,295,377
State Street Corporation 9,539,021 $266,043,295
Taunus Corporation 6,864,223 $191,443,179
Vanguard Group, Inc. 6,730,550 $187,715,039
Zurich Scudder Investments, Inc. 4,518,106 $126,009,976
Top Mutual Fund Holders:
Washington Mutual Investors Fund 18,772,550 4.61 $523,566,419
Investment Company of America 6,666,500 1.64 $185,928,685 30-
Income Fund of America Inc 6,130,000 1.51 $170,965,700
Templeton Growth Fund, Inc. 6,000,000 1.47 $167,340,000 Fidelity Dividend Growth Fund 4,516,900 1.11 $125,976,341
Vanguard Index 500 Fund 3,357,379 0.82 $93,637,300
American Balanced Fund 3,335,400 0.82 $93,024,306
American Fds Insurance Growth/Income Fd 3,040,000$84,785,600
Fidelity Equity-Income Fund 2,776,200 0.68 $77,428,218
Fidelity Contrafund Inc 2,771,200 0.68 $77,288,768
If you were a sharp SEC lawyer in training you would look at the trading that goes on between these companies to see how they are keeping the price above real values. What is lacking in the financial system is a standard system of weights and measures, which neither the Federal Reserve, nor the SEC, or the US Treasury uses as a benchmark across the boards to keep prices stable, a reality in line with the truth of what these pieces of electronic paper are really worth.
This will change, but it will take lots of time and education, and a lot of people losing trillions more before the reality of this type of knowledge and perception sets in with the institutions who have the most to lose in this global pyramid scheme.
The bottom line is, will ABS management add 160% or 200% to its NPTBV over the course of the next 24 months? If you think so, buy it. If you think not, short it.
Shares Short 14.2M daily...
Use that quick litmus test on any of the DOW components and you will see how truly overvalued every Big Board stock except for maybe 3 or 4 actually are. KO is trading 10X+ above NPTBV.
How long before the big bears figure that out?
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Former dot-com
darling Commerce One Inc.(NASDAQ:CMRC), whose shares have plummeted
to below 50 cents from over $125, on Friday said shareholders
had approved a 1-for-10 reverse stock split aimed at ensuring
its can continue trading on Nasdaq.
Commerce One, which sells software to link purchasers and
suppliers on the Web, saw its shares end at 34 cents on Friday
-- a far cry from their lifetime closing high of $128.78.
The reverse split will be effective at the close of
business on Sept. 16.
Elsewhere, Palm Inc. (NASDAQ:PALM) is planning a reverse split
of 1-for-10 or 1-for-20.
Software maker Firepond Inc. (NASDAQ:FIRE), which traded over
$100 in 2000, did a 1-for-10 split last month. Its shares now
trade at $2.54.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Over 3 million layoffs in the past 12 months with unemployment rates above 5% is massive. Foreclosure rates are at 40 year high with interest rates at a 30 year low according to CNBC
Penny King Holdings Corporation, a Delaware Investment Holding Company.
240,000,000,000 of 6+ trillion mortgages currently in arrears as reported by CNBC. Foreclosure rates at an all time historical high following high level of unemployment and massive layoffs of the past year. Some open short positions:
http://biz.yahoo.com/p/f/fnm.html Shares Short 11.3M
http://biz.yahoo.com/p/f/fre.html Shares Short 9.29M
http://biz.yahoo.com/p/n/nxcd.ob.html Shares Short 1.74M
http://biz.yahoo.com/p/n/nis.html Shares Short 1,000
http://biz.yahoo.com/p/a/axp.html Shares Short 14.7M
http://biz.yahoo.com/p/a/ahmh.html Shares Short 987.0K
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Some historical paths to Kingship;
1. By a mandate of the citizens seeking a positive leader.
2. By war wages won by deceit used to force subjects into submission.
3. By political process.
4. By lineage and ascendency from a previous King. Heirship.
5. By assasination, seizure of power, through revolt.
6. By subterfuge and covert manipulation.
http://classics.mit.edu/Tacitus/annals.1.i.html
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Perhaps it was written by a Punster named Seizer:
http://classics.mit.edu/Tacitus/annals.1.i.html
5. I watched the Beatles first appearance on the Ed Sullivan show live, not just in reruns.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
I heard an analyst touting KO this morning on CNBC with the commentators agreeing. Global investors, hedge funds, mutual funds, and large cap investment bankers can artificially inflate the price of a stock by creating artificial demand and fixing bid prices, but smart individual investors who can study financial statements and know the difference between real net tangible book value and fluffed up balance sheets that contain goodwill and "intangible assets" which creates artificial net worth, can take advantage of this set of circumstances by carefully shorting those stocks that have the most fluff in the financial statements.
Certified financial statements are no guarantee that what the managements stated value of the company is equal to the "real" value. Perceptions are skewed when financial statements are not carefully studied and broken down into their real components. The US Government has the most unreliable financial statements, far worse than any reported by corporations that trade publicly. 401K holders and mutual fund managers are gradually getting the picture. Even Greenspan is back peddling, stating that the Fed was not responsible for the prior bubble (remember "irrational exhuberance"?) and its bursting. The real cause of the bubble bursting is rapidly expanding public awareness of what constitutes real value versus illusory promotional mathematical market manipulation.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Anyone know how many shares of this company Paul Allen or Vulcan Ventures owns?
Penny King Holdings Corporation, a Delaware Investment Holding Company.
See a shorting opportunity here?:
http://biz.yahoo.com/t/a/airm.html
http://biz.yahoo.com/prnews/020907/nysa014_1.html
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
AIR METHODS CORPORATION
-------------------------------------------------------------------------------
(Name of issuer)
COMMON STOCK, PAR VALUE $.06
-------------------------------------------------------------------------------
(Title of class of securities)
009128307
-------------------------------------------------------------------------------
(CUSIP number)
MATTHEW J. DAY, ESQ.
118 E. 25TH STREET, EIGHTH FLOOR
NEW YORK, NEW YORK 10010
(212) 673-0484
-------------------------------------------------------------------------------
(Name, address and telephone number of person
authorized to receive notices and communications)
SEPTEMBER 9, 2002
-------------------------------------------------------------------------------
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
/ /.
Note. six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d- 1(a) for other parties to whom copies are
to be sent.
(Continued on following pages)
(Page 1 of 7 Pages)
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
<PAGE>
--------------------- -----------------
CUSIP No. 009128307 13D Page 2 of 7 Pages
--------------------- -----------------
================================================================================
(1) Name of Reporting Person and IRS Identification No. of Above Person:
ACQUISITOR PLC
--------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (See Instructions).
(a) /_/
(b) /_/
--------------------------------------------------------------------------------
(3) SEC Use Only
--------------------------------------------------------------------------------
(4) Source of Funds (See Instructions)
WC
--------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e). /_/
--------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
UNITED KINGDOM
--------------------------------------------------------------------------------
Number (7) Sole Voting Power
of 482,600
Shares
Bene-
-----------------------------------------------------------
ficially (8) Shared Voting Power
Owned -0-
By
-----------------------------------------------------------
Each
Report- (9) Sole Dispositive Power
ing 482,600
Person
-----------------------------------------------------------
With:
(10) Shared Dispositive Power
-0-
--------------------------------------------------------------------------------
(11) Aggregate Amount Owned by Each Reporting Person
482,600
--------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) /_/
--------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
5.1%
--------------------------------------------------------------------------------
(14) Type of Reporting Person
CO
================================================================================
<PAGE>
--------------------- -----------------
CUSIP No. 009128307 13D Page 3 of 7 Pages
--------------------- -----------------
The following constitutes the Schedule 13D filed by the undersigned
(the "Schedule 13D").
Item 1. Security and Issuer.
This statement relates to shares (the "Shares") of the Common
Stock, par value $0.06 per share ("Common Stock"), of Air Methods Corporation
(the "Issuer"). The principal executive offices of the Issuer are located at
7301 South Peoria, Englewood, Colorado 80112.
Item 2. Identity and Background.
Items 2(a), 2(b) & 2(c).
This Schedule 13D is filed by Acquisitor plc, a company
incorporated in Wales and England of the United Kingdom (the "Reporting
Person"), with a business address of 190 The Strand, London, England WC2R
1JN. Acquisitor was formed in 1999 and endeavors to achieve a high rate of
capital growth for its shareholders by acquiring significant holding in
companies which the members of its Board of Directors consider to be
fundamentally undervalued. Acquisitor is managed by its Board of Directors.
The directors of the Reporting Person are Duncan
Soukup, John Radziwill, Luke Johnson and Christopher Mills. The business
address of Mr. Soukup is 118 E. 25th Street, 8th Floor, New York, NY 10010.
The business address of Messrs. Johnson, Mills and Radziwill is c/o
Acquisitor's business address given above.
In accordance with the provisions of General Instruction C to
Schedule 13D, information concerning the executive officers and directors of
Acquisitor is included in Schedule A hereto and is incorporated by reference
herein.
(d) During the last five years, the Reporting Person and the
members of its Board of Directors have not been convicted of a criminal
proceeding (excluding traffic violation and similar misdemeanors).
(e) During the last five years, the Reporting Person and the
members of its Board of Directors have not been party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
(f) Messrs. Soukup, Radziwill, Johnson and Mills are citizens
of the United Kingdom.
<PAGE>
--------------------- -----------------
CUSIP No. 009128307 13D Page 4 of 7 Pages
--------------------- -----------------
Item 3. Source and Amount of Funds or Other Consideration.
The aggregate purchase price of the 482,600 shares of Common
Stock acquired by the Reporting Person is $3,476,806 and came from its working
capital.
Item 4. Purpose of Transaction.
The Reporting Person believes that the shares of Common Stock
of the Issuer are undervalued and represent an attractive investment
opportunity. It presently has no plans or proposals which would relate to or
result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of
Schedule 13D except as set forth herein. The Reporting Person intends to have
open communications with the Issuer's management in order to monitor their
efforts to increase stockholder value. Depending on various factors including,
without limitation, the Issuer's financial position and investment strategy, the
price levels of the shares of Common Stock, conditions in the securities markets
and general economic and industry conditions, the Reporting Person may in the
future take such actions with respect to its investment in the Issuer as it
deems appropriate, including without limitation purchasing additional shares of
Common Stock in the open market or otherwise, seeking to elect a slate of
directors to the Issuer's board of directors or presenting proposals
for stockholders' consideration at an annual or special meeting of the
Issuer's stockholders. The Reporting Person may also sell some or all of its
shares of Common Stock in the open market or through privately negotiated
transactions, or change its intention with respect to any and all matters
referred to in this Item 4.
Item 5. Interest in Securities of the Issuer.
(a) As of the close of business on September 10, 2002,
the Reporting Person beneficially owns 482,600 shares of Common Stock
constituting approximately 5.11% of the shares of Common Stock
outstanding. The aggregate percentage of shares of Common Stock reported
owned by the Reporting Person is based upon 9,448,327 shares of Common Stock
outstanding as of August 2, 2002, as reported in the Issuer's Quarterly Report
on Form 10-Q for the quarter ended June 30, 2002 filed with the Securities and
Exchange Commission on August 12, 2002.
(b) The Reporting Person has the sole power to vote and
dispose of the shares of Common Stock reported in this Schedule 13D.
(c) The table below lists all transactions in the
Issuer's Common Stock in the last sixty days by the Reporting Person. All such
transactions were made in the open market.
Transactions in Shares Within the Past 60 Days
Shares of Common
Stock Price Per Date of
Purchased/(Sold) Share Purchase/Sale
---------------- ---------- -------------
28,300 5.4905 09/06/2002
10,800 5.4654 09/09/2002
9,500 5.9473 09/10/2002
<PAGE>
--------------------- -----------------
CUSIP No. 009128307 13D Page 5 of 7 Pages
--------------------- -----------------
(d) No person other than the Reporting Person is known to have
the right to receive, or the power to direct the receipt of dividends from, or
proceeds from the sale of, such shares of the Common Stock.
(e) Not Applicable
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of the Issuer.
Not Applicable.
Item 7. Material to be Filed as Exhibits.
Not Applicable.
[The remainder of this page was intentionally left blank.]
<PAGE>
--------------------- -----------------
CUSIP No. 009128307 13D Page 6 of 7 Pages
--------------------- -----------------
SIGNATURES
After reasonable inquiry and to the best of his knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: September 10, 2002
ACQUISITOR PLC
By: /s/ Duncan Soukup
--------------------------------
Name: Duncan Soukup
Title: Managing Director
<PAGE>
--------------------- -----------------
CUSIP No. 009128307 13D Page 7 of 7 Pages
--------------------- -----------------
SCHEDULE A
Information Concerning Directors of Acquisitor plc
Acquisitor is managed by its Board of Directors, whose details are given below:
Duncan Soukup, Managing Director, aged 48
Since January 2000, Mr. Soukup has served as managing director of Acquisitor. He
is also president and chief executive officer of Lionheart Group, Inc. a US
based financial services holding company that he founded in 1994 which in
January 2002 became a subsidiary of York Energy Ltd., a Guernsey company quoted
on the Ofex market in the UK. Mr. Soukup served as the chairman and chief
executive officer of York from November 2000 until August 2001, and currently
serves as a Director. From 1988 to 1994, Mr. Soukup served as a managing
director of Bear, Stearns & Co. Inc. where he established and ran the company's
foreign Equity Research and Sales department and was until 1998 a director of
Sage Laboratories, Inc., a US public company that was acquired by Filtronic plc
of the UK.
Luke Oliver Johnson, Director, aged 40
Mr. Johnson has served as a director of Acquisitor since January 2000. He is
also the chairman of Signature Restaurants PLC. He has over 17 years of
experience of making investments in public and private companies. He worked as
a stockbroking analyst at Kleinwort Benson Securities from 1984 to 1988, and
has subsequently served as a director of a number of public companies. He
served as executive director, chairman and non-executive director of Pizza
Express plc from 1993 until 1999. He was involved in the flotation and
subsequent sale of various public companies, including American Port Services
plc, Abacus Recruitment plc and My Kinda Town plc. In all these cases he also
served as a non-executive director. In the last ten years he has been involved
as a principal in a number of private equity transactions across a range of
industries. In addition he serves as a non-executive director of Elderstreet
Downing VCT plc. Mr. Johnson will share the selection process with Mr. Soukup
but he will not be devoting all of his time to the business of Acquisitor in
light of his other business interests.
John Stanislas Albert Radziwill, Non-Executive Director, aged 55
Mr. Radziwill has served as the chairman of Acquisitor since January 2000. He
has also served as the chairman and chief executive officer of York Energy Ltd.,
a Guernsey company quoted on the Ofex market in the UK since August 2001, and
prior to then served as a director. Mr. Radziwill was also, until its sale
to Danzas AG, a director of Air Express International Corporation, a
worldwide transportation and logistics company. From 1977 to 1997, Mr.
Radziwill was president of Radix Organization Inc., a private US investment
banking firm, and from 1979 until 1995 was president of Radix Ventures
Inc., a US publicly quoted company engaged in international
transportation services. Mr. Radziwill is also a director of Goldcrown
Group Limited, a private UK property investment vehicle.
Christopher Mills, Non-Executive Director, aged 49
Mr. Mills has served as a director of Acquisitor since January 2000. He has
been a Chief Investment Officer of J O Hambro Capital Management Ltd ("J O
Hambro") since 1983. He is also a Chief Executive of North Atlantic Smaller
Companies Investment Trust plc ("NASCIT") and American Opportunities Trust
plc ("AOT", both NASCIT and AOT are investment trusts listed in the United
Kingdom). Prior to joining J O Hambro, Mr. Mills worked for Samuel Montagu
Limited, Montagu Investment Management Ltd and its successor company, Invesco
MIM. At Invesco MIM, Mr. Mills served as a director and Head of North American
Investments and North American Venture Capital.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Thanks. Interesting stock price.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Many moons ago, based on sheer fundamentals, we began shorting anything trading over three times net tangible book value under the assumption that fundamentally speaking, any company that could demonstrate earnings growth by management which filtered down to the bottom line future net tangible category for the benefit of the many instead of the few at the top of each corporate pyramid in America, we might consider it a buy, if it looked like that figure would come in at 300% growth over 36 months.
In some cases we made exceptions to this formula and you can see those negative results in our Live Tracker at swingwire dot com. We have not attempted to hide our losses. On the other hand, we won't show you all our gains other than to state that the groups that followed us for the past 36 months are the ones that wound up with a good portion of that $6 trillion in equity which has evaporated from the markets, not only on the S&P 500, the DOW, or NASDAQ, but particularly in small cap and penny stocks, many of which are now trading at the sub penny level.
We are downshifting our formula. If any non financial company trades above two times net tangible book value, regardless of pro forma projections, or what anal-ists might be touting, we day short it. Take your pick, there are 17,000 stocks out there, many which you can no longer short because they trade under $5.00. But there are still plenty of opportunities.
KO for example is trading at 16X net present tangible with at least $3B in intangibles reported on its balance sheet and certified by its CEO. If its intangible it can disappear into thin air overnight. That is a risk no one should take, particularly in this market. So looking at real net tangible using KO as a prime example, at two times net present tangible, sans the intangibles, fundamentally KO has a net worth of 7.2 billion divided by 2.48 billion shares outstanding, and you have a net present tangible book value of $2.90.
Discounting all references to future projections, and pro forma financial estimates, and anal-ist estimates of earnings growth, the reality is that this company is currently trading AROUND 1,622% above its net tangible book value. So the question you have to ask yourself is this: "Do you feel lucky? Well do ya, Punk?" Well if you were Clint Eastwood, you would really take a good look at the bad and the ugly of this stock, dig deeper and see if management plans to add 1622% to its net present tangible book value any time soon. Or will it add 200% to its NTBV even in the next 24 months? And then we dig deeper and find out that, no it hasn't done this in the past 24 months, so why should we gamble and charge in like a bull in a china closet expecting it to continue to rise, when the boys in the back Offices at Merrill are flipping this thing out the back door like World Comm and Enron et al, making billions and paying pennies on the dollar in penalties, while Schwab and Co run ads showing the Bear spilling his sugar all over his coffee, and despite his mournful outlook, it's the bull in the commercial that is the real idiot!
Nope, I would say to Clint Eastwood, no I don't feel lucky, and I aint no punk, so shoot me, I'm not a piano player either, but if I'm anything like that dumb looking bear, KO will be the knockout bear play of the year. Don't trust me on this, do your own research, and call KO yourself and ask them, are you guys going to manage this company in such a way that our net worth as stockholders is going to grow as fast as the amount of stock options you are are giving to the upper layer of this iceburg that is about to melt if we really shed some truth and light on the situation?
Where's the beef in KO? There's no bull there. Now when it comes to financial stocks, the formula is 1.5x NTBV. If you can't figure out why, run your own numbers. Then tell me what you find and I'll tell you what we think.
OUR DISCLOSURES are at the first few commentaries posted here. If you are seeking advice on any particular stock, we can't give it under SEC rules without a license, but if you want to donate to our cause, we can give you our two cents worth for each dollar per second that might come our way as your voluntary kind contribution. After all, how long does it take to say Buy, or Sell? There are no holds in this market, unless you want to add to your wallpaper collection. My wall has lots of colorful sheets all over it.
http://finance.yahoo.com/q?s=KO&d=c&k=c3
http://finance.yahoo.com/q?s=KO&d=c&k=c3&p=m200&t=1y&l=on&z=m&q=l
http://biz.yahoo.com/djus/020828/1549000559_1.html
Apply this same formula to (PEP) Pepsi and see if its not trading at 800% above its reported NTBV. If you prophet from this then you can donate half of your wisdom to our cause, and then maybe we can increase the kitty at this site.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Finally. EM
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Yes it looks like a good fit. I'll see what we can do, despite its negative book value.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
I agree, it appears that the fine lines between truth and fiction have been blurred beyond recognition in some instances. Accurate perception is hard to come by these days amidsts trillions of words pouring from the minds of 300+ million netsters...How is life treating you these days?
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Suits - Counter Suits - We all wind up wearing our suits sooner or later. At least suits are better than H-bombs or suicide missions. Did you catch that Frenchman who writes a book that 911 was all an an inside military government conspiracy designed to boost the military spending budget, and that the people being held in Cuba are all the passengers of the supposed aircraft that hit the Pentagon and World Trade Towers?
Penny King Holdings Corporation, a Delaware Investment Holding Company.
New Laws to be Proposed by Bank Activities Reform Commission:
"If any employee, agent, or hired personnel of a securities brokerage house is convicted of any fraud, the license of the brokerage will be terminated permanently."
That may seem harsh, but it is the only rule that will restore confidence in the 17,000 plus currencies currently floating around as fiat money in the world of stocks and bonds these days...not even audited financial statements can be trusted.
BARC is a service mark of the Free and Clear Foundations of America.
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Hi Guys, you read it here first:
http://www.investorshub.com/boards/read_msg.asp?message_id=471042
I'm not an investment advisor. I'm not a stock promoter. I'm just a slob like you trying to find his way home!
Show us the real f***ing money Mr. Greenspan!
Get out from under your arms Mr. Pitt!
Be ready for anything all my dearly beloved friends!!!
Penny King Holdings Corporation, a Delaware Investment Holding Company.
From now on short anything trading above two (that's right 2) times net present tangible book value per share. Forget PPI, forget sales and pro forma statements, forget analyst recs, forget the past gibberish that cost you and your fellow human investors $7 trillion in fluffed up equity. Just ask yourself this one simple question: Does this company have a track record of flowing its earnings to the net present tangible book value for all stockholders and will it add 200% to its present net tangible book value during the next 24 months? If the answer is yes to that loaded two part question then buy all means buy it up. But if the answer is no, then by all means short it till it reaches 2x net present tangible. That is what the Saudis are being advised to do, and they are pulling their money out of the US to protect themselves from a trillion dollar lawsuit. Follow the money honey because if honey were money we'd all be a sticky mess. There are only 6 out of 30 stocks on the DOW that trade lower than 2x net present tangible. The best short on the DOW NOW is KO! That's a knockout for Coke!
Penny King Holdings Corporation, a Delaware Investment Holding Company.
Just signed up for this free two week trial. We'll see how it pans out.
Penny King Holdings Corporation, a Delaware Investment Holding Company.