Looking forward to my first summer off in 11 years!
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Yes boys I did cover and paid dearly for my mistake, all the way up to $10.33. Glad I wasn't stubborn and then actually went long @ $10.46 as the strength today was very impressive.
Hippy~chick
Never got low enough to cover so I shorted another 8500K into the close @ $9.94 avg and was able to bring my average up to $9.63 25.5K shares.
Thats one advantage that short traders have is eventually if they have deep enough pockets they can always cover.
Congrats though to all the guys who held on because it's been a rocky good. Good night Mr traderfan.
Hippy~chick
In fact I am thinking about shorting LPH here @ $2.24.
Hippy~chick
Looking like I may get a profit out of this anyway. New LOD here but I think I may wait for nervous sellers to test the $9.00 mark.
Hippy~chick
Before all you "men" go attacking me, first let me say that over 90% of my profits go to charities. That being said I have been very fortunate in my career and have traveled all around the world. I have seen the good, the bad, and the ugly. If only everyone could see what I have seen we would all be much kinder to each other.
The man with no shoe's was never happy~ then he met the man with no feet.
Hippy~chick
You would be surprised how many people here are doing it Ryan, it's been a relatively good paying short 80% of the time.
I did cover 28k of the 50k before the close @or under 9.50, and will have no problem getting the rest tomorrow. Just a typical girl trading while talking on the phone and made error.
Hippy~chick
It's not funny, I'm trying to cover now.
Opps, I meant to short 5,000 @ $9.40 and I accidentally put in 50,000. Hopefully I can cover without too much damage. I better call my broker.
S-8 filed for 1.57 million shares, that is a very big S-8 worth almost $8 million. Not sure where all these shares are going but it's starting to stink around here.
http://ih.advfn.com/p.php?pid=nmona&article=43456111&symbol=DJSP
And here's another link in regards to the claims that the notary falsely post dated documents. Looks legit too.
http://stopforeclosurefraud.com/tag/law-offices-of-david-j-stern-plantation-florida-33324/
Bad article on Stern here. http://www.tampabay.com/news/foreclosures-bring-wealth-rebukes-for-florida-lawyer/1109664
Here's on part that doesn't sound very good.
The company, which had $260 million in gross revenues last year, is registered in the British Virgin Islands but is based in Plantation and gets more than 90 percent of its business from Stern's law firm, according to a statement filed with the Securities and Exchange Commission. That could be a problem in light of state laws and Florida Bar rules that prohibit fee-sharing and the unlicensed practice of law, the statement acknowledges.
"How can a nonlawyer, publicly traded company be permitted to generate $19.6 million in revenues from foreclosure fees if it is not in fact providing legal services?'' St. Petersburg lawyer Matthew Weidner asked in a recent complaint to the Florida Bar.
Weidner, who represents homeowners, wants the Florida Bar to investigate exactly which "nonlegal" activities the company is handling and whether transferring so many foreclosure functions to nonlawyers could lead to "potential abuse of consumers and the court process.''
In its statement to the SEC, the company lists other risks to growth. Among them: the possibility that Stern's $58.5 million payout could "reduce his incentive'' to drum up new business.
In general, though, DJSP Enterprises predicts a fairly bright future for itself. While loan modification programs may temporarily slow the pace of foreclosure, "we believe these programs are simply delaying the inevitable,'' the statement says.
And as more Americans lose their homes, Stern's spinoff company is developing a promising new business — helping banks sell all those foreclosed houses and condos.
Sleazy move by management to do the Global Hunter Conference and get new shareholders and then reward them a day later with huge dilution. It's no wonder people are staying away from these China stocks.
OTOW, smells like $$$$$ here. eom
FWIW, With over 200,000 registered members Burp ranks in the top 100 at #85 with over 360 personmarks and has helped me and others make plenty of money with his chart calls.
The markets have been rough the last few months but Burp is still sharing his picks, something few will do because they have little success or are all talk.
Please list you picks for the coming weeks so we can see how perfect you are since you are critiquing others skills.
http://investorshub.advfn.com/boards/TopPersonMarks.aspx
Hippy~Chick
p.s. Burp has also bought many strangers IHUB memberships who for one reason or another couldnt afford one, funny you don't have $20 to spare for being such a great trader.
Hey you big stud...when you going to give me a ride? Awesome party yard!
Hippy~chick
News at the close would be great!
You must be kidding! eom
SOURCE: Form 4
ISSUER: CHINA MEDIAEXPRESS HOLDINGS INC
SYMBOL: CCME
FILER: LAM JACKY WAI KEI
TITLE: Chief Financial Officer
DATE TRANSACTION SHARES PRICE VALUE
5/19/10-5/20/10 Purchase 4,000 $12.63 $50,500
OWNERSHIP: 4,000 (Direct)
The Form 4 is filed with the Securities and Exchange Commission by insiders
to report transactions in their companies' shares. Open market purchases
and sales must be reported within two business days of the transaction.
Insider Data Source: The Washington Service
(info@washingtonservice.com or 301-913-5100
RUSSELL 2000 REBALANCING SOON !
My plan is to automate the finding of the delisting candidates
fetch the total amount of shares held by which fund
compare average daily volume to the total to be eliminated shares
if a certain ratio is exceeded then put in buy order at -50% of the shareprice or so.
Have about $25k prepared for this situation.
Was a true party last year. Monster monster monster gains.
most people trade the additions, I just LOVE the removals
yep, stay tuned here, june are the key dates :
2010 Reconstitution
The 2010 reconstitution of the Russell Indexes will take place after the market closes on June 25, 2010.
Reconstitution schedule
June 11 Preliminary additions and deletions to the Russell Global Index, Russell 3000® and Russell Microcap® published after 3:00 p.m. PST
June 18 Updates to the list of additions and deletions
June 25 Updates to the list of additions and deletions
Reconstitution final after the close of the U.S. markets
June 28 Final membership lists posted for the Russell Global, Russell 3000, Russell 1000®, Russell 2000®, Russell Midcap® and Russell Microcap Indexes
The Day The Market Almost Died (Courtesy Of High Frequency Trading)
Submitted by Tyler Durden on 05/06/2010 19:09
A year ago, before anyone aside from a hundred or so people had ever heard the words High Frequency Trading, Flash orders, Predatory algorithms, Sigma X, Sonar, Market topology, Liquidity providers, Supplementary Liquidity Providers, and many variations on these, Zero Hedge embarked upon a path to warn and hopefully prevent a full-blown market meltdown. On April 10, 2009, in a piece titled "The Incredibly Shrinking Market Liquidity, Or The Black Swan Of Black Swans" we cautioned "what happens in a world where the very core of the capital markets system is gradually deleveraging to a point where maintaining a liquid and orderly market becomes impossible: large swings on low volume, massive bid-offer spreads, huge trading costs, inability to clear and numerous failed trades. When the quant deleveraging finally catches up with the market, the consequences will likely be unprecedented, with dramatic dislocations leading the market both higher and lower on record volatility." Today, after over a year of seemingly ceaseless heckling and jeering by numerous self-proclaimed experts and industry lobbyists, we are vindicated. We enjoy heckling - we got a lot of it when we started discussing Goldman Sachs in early 2009. Look where that ended. Today, we have reach an apex in our quest to prevent the HFT "Black Monday" juggernaut , as absent the last minute intervention of still unknown powers, the market, for all intents and purposes, broke. What happened today was no fat finger, it was no panic selling by one major account: it was simply the impact of everyone in the HFT community going from port to starboard on the boat, at precisely the same time. And in doing so, these very actors, who in over a year have been complaining they are unfairly targeted because all they do is "provide liquidity", did anything but what they claim is their sworn duty. In fact, as Dennis Dick shows (see below) they were aggressive takers of liquidity at the peak of the meltdown, exacerbating the Dow drop as it slid 1000 points intraday. It is time for the SEC to do its job and not only ban flash trading as it said it would almost a year ago, but get rid of all the predatory aspects of high frequency trading, which are pretty much all of them. In 20 minutes the market showed that it is as broken as it was at the nadir of the market crash. Through its inactivity to investigate the market structure, the SEC has made things a million times worse, as HFT-trading seminars for idiots are now rampant. HFT killed over 12 months of hard fought propaganda by the likes of CNBC which has valiantly tried to restore faith in our broken capital markets. They have now failed in that task too. After today investors will have little if any faith left in the US capital markets, assuming they had any to begin with. We need to purge the equity market structure of all liquidity-taking parasitic players. We must start today with High Frequency Trading.
Further to demonstrate this point, we bring our readers attention to our post from April 1, 2009 titled An Open Letter To Quant Funds. In it we said:
In his April 14th report Matt Rothman wrote about a dramatic, parabolic outperformance trend for names with high short interest, low prices and fundamentally weak names. He opined that all conditions for this trend to end are in place. Contrary to his very valid arguments, the trend accelerated yesterday.
Stocks with poor fundamentals, market share losses and poor earning prospects that quantitative managers tend to short, gained more than higher quality long positions.
It is clear from Mr. Rothman's report that this trend is a main contributor to outsized losses for quant managers. Some of his respondents admitted to hitting P&L stops. Recent acceleration of this trend, aka the "crap rally" clearly further damaged quantitative managers performance and resulted in further hits of P&L stops. The resulting short covering and long index hedges have perpetuated the market rally for now.
At this point, it is hard to say what set off this process, but it is currently accelerating and feeding on itself.
From the timing of Mr. Rothman's poll of quant managers, it is clear that smaller managers had ample time to exit positions and get flat. Continuation of the "crap rally" could indicate larger, systematic problems at the largest, most sophisticated quant managers.
We are paging Jim Simmons, DE Shaw, Citadel, LSV, Jacobs Levy and "significant"' others. Are you all right? We need you alive, small and nimble, to help provide liquidity and maintain orderly markets, not outsized, bigger than the market and dead.
If you still can, please come out and speak up before it is too late.
Today, it was too late. Liquidity disappeared.
And now we have to deal with the consequences. One amateurish way is to cancel trades which is what the Nasdaq is doing. This is simply pathetic, and indicates that everyone is powerless to stand before the consolidated idiocy of the HFT "cash cows."
One person who does get it is Senator Kaufman, who should be a shining example to all the other idiots and traitors in both Congress and Senate. Senator Kaufman issued the following release:
“As I said on the Senate floor today, the growing sovereign debt and banking crisis in Europe is very troubling. The U.S. needs to get its financial house in order through strong Wall Street reforms that will serve as a lasting bulwark against financial instability.
“I also have been warning for months that our regulators need to better understand high frequency trading, which appears to have played a role today when the US market dropped 481 points in 6 minutes and recovered 502 points just 10 minutes later. The potential for giant high-speed computers to generate false trades and create market chaos reared its head again today. The battle of the algorithms – not understood by nor even remotely transparent to the Securitiesand Exchange Commission – simply must be carefully reviewed and placed within a meaningful regulatory framework soon.”
It is time fot the SEC to step up to its own sole duty, which is not to guarantee itself jobs at Goldman Sachs (well, not so much anymore), or to watch 18 hours of transvestite porn each day, but to protect the US investor from such borderline criminal activity as High Frequency Trading gone amok. Forget the Fat Finger - today we were one Fed Finger away from a meltdown that would make Black Monday seem a joke in comparison. Next time we won't be so lucky.
We will have much more to say on this shortly, but we leave you with the words of Dennis Dick of Bright Trading:
Predatory Market Making May Have Led to Crash
Dennis Dick, CFA
Bright Trading LLC
On January 4th of this year, Rambus (RMBS) fell 30% in a matter of five minutes. It immediately bounced back and was later attributed to a trader with a “fat finger”. When this incident occurred, I discussed on Zero Hedge, the possibility of this being more than just a trader with a “fat finger”. (http://www.zerohedge.com/article/rambus-hft-fat-finger-precursor-things-come). I speculated that this could have been caused by a market structural problem. This could have been caused by a lack of liquidity due to predatory market making.
Today the same incident occurred, except this time, it happened in the overall market. Again, the media is blaming a trader with a fat finger. This may have been the catalyst but it was not the problem.
Predatory market making practices are driving liquidity providers out of the market. Algorithmic systems constantly step in front of displayed liquidity providers, and discourage them from placing passive limit orders. They are programmed to automatically step in front of displayed limit orders, to be at the front of the line for execution. This practice is especially prevalent in thinner stocks. If a human trader places an order at $20.05, the algorithmic system automatically bids $20.06. If the human raises their bid to $20.07, the computer goes to $20.08. This discourages true liquidity providers, and they place less passive limit orders.
Even in the 5 minutes that the market was crashing, these algorithmic systems were still abusing displayed orders. I placed a few buy orders during the crash, and my orders were still automatically stepped in front of by a penny. As my friend, Jason Fournier mentioned in his comments to the SEC, “not only are they discouraging liquidity, they are not allowing it.”
Broker-dealer internalization also abuses displayed liquidity as they continuously internalize retail order flow in front of displayed limit orders. In some cases they step in front of the order by as little as 1/100th of a penny, an abusive practice called sub-pennying.
Broker-dealers justify this practice by saying they were giving their customer price improvement. But they completely ignore the unquantifiable loss to the market participant who was displaying the order, and did not receive the fill.
These predatory market making practices are having a devastating effect on liquidity in our market. As true liquidity providers become more discouraged, and place less passive limit orders, the depth of the market gets thinner. Therefore, when we have a trader with a “fat finger” accidentally make a mistake, there are less liquidity providers to cushion the blow.
If these predatory market making practices are allowed to continue, eventually there will be no real liquidity in the depths of the market, and when there is a market impact event, we’re in big trouble.
Today was just a taste of things to come, if our regulators don’t take note.
And for the benefit of the SEC, this is what a broken market looks like.
SNSS PLAY INFO!
Re: SNSS->*$300 AML sales with 200 million fully diluted O/S means $30.00 PPS for AML only.
Look:
Sunesis makes a drug that will hopefully increases the survivability of people suffering from AML, a particularly vicious form of leukemia. Let’s break it down.
There’s 200 million shares outstanding, giving it a market cap of around $200 million (if PPS $1.00). The AML market is $900 million a year. Conservatively, if their drug is approved, they could get a third of the market (at the moment, there are no FDA-approved drugs that are competing with SNSS), $300 million.
Sales at $300 million.
Gross margin in this sector being 85% (80% to 90%) at $255 million.
Operating margin is $50 million (conservatively).
Then Operating income is $205 million.
P/E ratio of 30 (GENZ has 34), then potential market capital of around $60 billion or "$30.00 stock."
That's only for AML in 2012.
Now what else do we have? Ovarian cancer! I alomost forgot about it!
Do you know the market potential on ovarian cancer is? I mean US market is $2 billion to $2.5 billion. I, however, do not know what will be the total market capture because we do not know exactly what the data will be like at the upcoming ASCO.
I believe it is more than great, possibly very significant, by the fact that ASCO gave SNSS, a small bio pharma, a chance to give oral presentation, which would not be possible if the presenting data are not very good!
Now, adding ovarian cancer going into phase 3, we should see PPS a lot higher by a lot!
Gulf spill stay up to date. http://www.gulflive.com/
http://blog.skytruth.org/
The Worst CEOs In American History
Posted: April 27, 2010 at 9:19 pm
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The age of the American CEO did not begin until the end of the 19th century. Prior to that time, all the largest businesses in America were run by owners and families acting as proprietors. The best examples of these were in four industries: steel, finance, oil, and railroads.
Although the firms often had general managers, most historians believe that the period in which the CEO dominated large corporations did not begin until Alfred Sloan took the helm of GM in the mid-1930s.
The 24/7 list is based on a review of the Fortune 500 companies back to 1955. In order to perform further analysis, we also consulted the histories of US corporations dating back to the 1880s.
Those selected for the list fall into one of two simple categories – those who ruined the companies completely while they served as sitting CEOs and those who did severe damage from which their firms could never possibly recover. Some will make the argument that many of these CEOs should be excluded because their companies failed as a result of fraud committed by the CEOs. In each of these cases, however, the chief executives ruined the company. It does not change this fact if this occurred because of avarice or mismanagement.
Readers may argue that there are other CEOs who should have been on this list. However, each of the CEOs on this list ran their companies when they were at or near their peak performance. Many companies on this list like Pan Am and Eastman Kodak, dominated their industries. That makes these failures all the more colossal and, almost certainly, avoidable.
1. Jonathan Schwartz. By the time Sun Microsystems was bought by Oracle for $7.4 billion, Jonathan Schwartz, the hip, blogging, ponytail wearing CEO, had ruined the firm’s prospects so badly that acquisition was its only option.
In the early 1980s, the company was founded by a small group of engineers, including its CEO, Scott McNealy. During his tenure, Sun Microsystems grew to become one of four dominant players in the server and processor space, which also included Oracle, HP and IBM. Prior to Schwartz’s appointment by McNealy, Sun was a largely profitable and competitive company.
Schwartz’s promotion to CEO in April 2006 was followed by a long series of losses. Despite its strong position, Sun started to fall apart as it lost market share in its main server business to HP and IBM. The company’s shares fell from almost $27 to under $4 from late in 2007 to late 2008; Sun also later fired nearly 6,000 people, or about 18% of its employees.
In 2008, in an attempt to diversify, Sun bought MySQL AB, the company offering the popular open source database. The acquisition did not work. As Sun’s share of the server market continued to fall, Schwartz tried to improve market adoption of its Java software, which never brought in much revenue. Despite some success, the problem was that Java is free and Sun never came up with a realistic model to monetize it.
Sun could have become one of the largest enterprise technology companies in the world. Schwartz blew that chance. Larry Ellison did not.
2. Ken Lay. Enron grew out of Northern Natural Gas Company and Internorth, both essentially natural gas companies. Enron reached $101 billion in sales in 2000 despite this humble origin, through a series of acquisitions and expansions into new businesses. Ken Lay became CEO in 1986 and presided over most of the company’s growth which was largely fueled by diversification into energy generation, gas distribution businesses and water based utilities. Lay was so successful at marketing the firm to Wall St. and to the press that it was Fortune’s “America’s Most Innovative Company” for six years in a row, from 1996 to 2001.
It became clear in 2001 that Enron was hiding portions of its liabilities off of its balance sheets. Most of its assets and earnings were doctored. By the end of the year, Enron filed for bankruptcy. An investigation of the scandal found that Lay had an active hand in inflating the company’s financial health. In 2006, Lay was found guilty of securities fraud and other charges. He died in October 2006, just before his sentencing.
3. Chuck Conway. Chuck Conway was the head of Kmart when it declared bankruptcy. He was charged with accounting fraud that improved the company’s balance sheet.
Founded in 1899, Kmart, formerly known as Kreske, was one of the preeminent retailers in the US for decades. By the 1970s, Kmart was the Walmart of its era and controlled a large portion of the “big box” retailer business in the US, Canada, and Australia. At its peak, it had over 1,000 stores. In the 1980s, despite its slowing growth, the company began to invest in separate business lines, which included Waldenbooks, the Sports Authority, and Office Max.
By 2000, following a string of unsuccessful business decisions, Conway was brought in to turnaround Kmart. When he joined the company in 2000, it was still a formidable force in the US retail space, despite its lackluster performance over the prior 15 years. As part of his inaugural address, he said his primary goal was to improve the company’s supply chain and bolster its brand so that the firm could better compete with Walmart, a company that was founded over 60 years after Kmart. He did not carry out any of his goals.
At the time of Kmart’s bankruptcy in 2002, he was charged with defrauding stockholders by covering up details of the firm’s faltering financial position. He was also accused of spending the company’s money on airplanes and houses.
4. George Shaheen joined Webvan in September 1999 after being the head of Andersen Consulting, later renamed Accenture.
The company, one of the largest start-ups during the Dot-com Bubble, was set up to take grocery orders over the Internet and deliver the orders within 30 minutes. Webvan planned to have operations in 26 cities. It never got beyond 10, and most of these remained on the West Coast. The company spent $1.5 billion over a year and a half period, beginning in 2000. At one point, Webvan had 4,500 employees and owned a string of warehouses. When it declared Chapter 11 in 2001, it fired 2,000 people.
Webvan doubled down on its strategy to operate an online grocery business by buying HomeGrocer in June 2000. It was an error that increased Webvan’s cash burn rate. The logistics needed to execute its business model were a nightmare. Shaheen failed to understand that all retailers operate on tiny margins and Webvan had no leverage with customers to improve that. Perhaps, worst of all, he authorized issuance of an IPO that raised $375 million – almost none of it was recovered.
Shaheen holds a special place among bad CEOs. He fancied himself as one of the greatest business consultants in the world when he ran Andersen. Yet, it seems he did nothing to effectively review Webvan’s business model. It appears that he made no attempt to work with his board of directors or management to alter the company’s operations.
5. Tommy Sopwith. Tommy Sopwith, the founder of The Sopwith Aviation Company, began the storied airplane business in 1912. Contracted by the British government during the First World War, the company built 16,000 aircraft and employed 5,000 people. It was one of the largest aircraft manufactures of the first two decades of the 20th century.
Sopwith was slow to realize that most airplane manufacturers would need to convert their products to appeal to the commercial market and failed to adjust to the civilian world in time. Sopwith tried to sell slightly modified models of its military planes, but was unsuccessful. Although the company bought ABC Motors Limited, a motorcycle and engine manufacturer, in 1919, it was too late to diversify this business. Sopwith closed the following year.
Sopwith’s problems were compounded by charges that the company made exorbitant earnings on its wartime enterprises, and were eventually punished by punitive anti-profiteering taxes.
6. John Sculley. John Sculley is on the list for one reason. He fired Steve Jobs from Apple. Similar to the Google board’s decision to hire Eric Schmidt to run the company with its precocious founders, Sculley was hired to be Apple’s CEO in 1983. Because of his significant business experience and marketing acumen, which included the top job at PepsiCo and introduction of the Pepsi Challenge, the board hoped Sculley would bring a proven management style to Apple. It also hoped that he would bring a mature business approach to a company that was growing quickly but was run by inexperienced executives, which included its co-founder Steve Jobs.
In 1985, he convinced the board to strip his rival, Jobs, of all managerial responsibility, effectively canning one of the greatest product designers and marketers of all time.
Sculley believed in expensive marketing campaigns. Unfortunately, his marketing heft did not compensate for his insufficient product management skill. At the end of the day, he lacked sufficient technical background to be a product manager for Apple. During his tenure, he invested heavily in a number of failed ventures, including Apple’s Newton, an early PDA-like device, cameras and CD Players. And in 1993, Sculley’s lack of knowledge regarding the technical details of the products built by Apple and its competitors cost him his job.
Apple bought the computer company that Jobs had created, NeXT, in 1997, and Jobs became Apple’s CEO that same year. Like Sculley, the rest is history.
7. In 1887, Thomas Edison, the greatest inventor in US history, formed the Edison Phonograph Company – founded to profit from the phonograph technology he created.
Edison himself ran the company through most of the years it operated. Sound was recorded on wax cylinders. Recognizing the commercial appeal of the device, Edison increased adoption of his products by acquiring and offering more entertainment recordings for his machine. However, because the cylinders were difficult to mass produce, sales were limited.
In response to this design flaw, competitors, notably Columbia, designed and sold lighter discs, now called records. Its superior design allowed for faster production than the wax cylinders.
In 1916, Edison expanded into dictation, a more profitable business. But by that time, Edison had made a fatal decision that would lead to the firm’s eventual failure: he allowed competitors to dominate the business of selling the discs. Around that time, a group of popular artists under the Victor brand did all of their recordings on discs and Edison lost the market for recorded audio that he had created.
Although Edison hedged his bet in 1913 by creating his own disc division, he continued to aggressively market the wax cylinder product, believing it would be the eventual winner in the format wars. He was wrong and The Edison Company, as it had been renamed, shut down in 1929.
8. Bernard Ebbers. Under Bernard Ebbers’ stewardship, Worldcom became the second largest long distance company in the US, after it bought MCI in 1997 in a transaction valued at $37 billion.
Bernard Ebbers had been CEO of Worldcom’s predecessor firms starting in 1985. Over 15 years, he built the company through a series of acquisitions, culminating with the MCI deal.
In 1999, Ebbers tried to buy Sprint. Had the merger been completed, the $129 billion deal would have made Worldcom the largest telecom company, placing it ahead of AT&T. However, the deal was plagued by objections from regulators and eventually fell through.
During the merger, Ebbers began to prop up the Worldcom results with the help of senior financial executives at the company. The tech and telecom downturn of 2001 began to undermine Worldcom’s earnings and over the next two years, the efforts to manipulate the company’s financial results became more aggressive.
On top of this, Ebbers needed to sell large portions of his own Worldcom stock, to support his lavish lifestyle. The Worldcom board, fearing Ebbers’ sales would destroy the firm’s share price, made him a series of loans.
In 2002, internal auditors discovered that Ebbers’ efforts were the cause of a $3.8 billion financial fraud. That same year, Worldcom filed for Chapter 11.
In 2005, Ebbers was convicted of fraud, conspiracy and filing false documents. He was sentenced to 25 years in prison.
9. Angelo Mozilo co-founded Countrywide Credit Industries in 1969 as a mortgage lender.
By the mid-1990s, Countrywide had created a system to lay off risk by reselling bundled loans into the secondary market as mortgage-backed securities. Countrywide also expanded its services so that it could make loans, service them via collections, and handle closings with real estate appraisal services. About half of Countrywide’s loans did not conform to the criteria necessary for them to be sold to Fannie Mae and Freddie Mac. This increased its need to sell securitized loans to institutions.
By the mid-2000s, Countrywide’s core lending business had grown so much that it was estimated to have issued over 15% of all home loans in the US. When housing prices began to falter, the mortgage-derivatives market that CountryWide had helped to create began to collapse. These derivatives had been a major source of revenue for CountryWide and in August 2007 it was near financial collapse. The federal government provided capital to CountryWide but the sums could not salvage it as an independent business.
In July 2008, Bank of America closed a transaction to buy the failed mortgage lender. Subsequent to the events, it was disclosed that Mozilo had sold shares in the company that gave him a profit of nearly $300 million between 2005 and 2007. Shareholder class action suits claim that Mozilo was aware of the company’s problems during much of this period. The company was also sued in several states for misleading customers about the terms of the mortgage agreements, particularly the effects of adjustable rate mortgages on monthly payments. Countrywide was accused of originating loans with little or no due diligence on those receiving the loans. Those loans were then packaged and sold by CountryWide in the secondary market. Friends of Angelo, stock holders were not.
10. John Rigas. Adelphia Communications, once one of the largest cable companies in the US, filed for bankruptcy in 2002. John Rigas, its founder is now in prison.
Rigas founded the company in 1952 and built Adelphia into the fifth largest cable TV enterprise in the nation. By the late 1990s, Adelphia had almost 5 million subscribers to its cable TV service and a rapidly expanding high-speed Internet business. It had cable systems in over 30 states.
In 2002, the company filed for bankruptcy, in part because Rigas had siphoned off money to fund other companies owned by his family. He was eventually charged with stealing nearly $100 million. After its bankruptcy most of the Adelphia assets were eventually purchased by Time Warner Cable.
11. Juergen Schrempp was the architect of the 1998 merger of Daimler and Chrysler, which he called a merger of equals. In fact, Schrempp took control of the combined company almost immediately even though he had a co-CEO, Bob Eaton, for part of his tenure.
Schrempp sold the “merger” to shareholders by saying that Chrysler would reap huge savings by using parts and technology from Daimler, which was highly regarded for its engineering prowess. After the merger, however, Chrysler executives resisted the plan, and Schrempp did not push the matter as hard as he claimed he would. Schrempp also failed to accomplish another key point of the merger’s benefits that he touted: Chrysler’s sales foot print in the US would help Mercedes sell more cars in the US and Mercedes presence in Europe would help Chrysler.
Schrempp ignored the management of Chrysler in the US and its marketing and manufacturing operations began to fall apart only a year after the marriage. Within a year of the deal closing, the new company lost more than 50% of its market cap. Shareholder Kirk Kerkorian sued the company for $9 billion, charging the Germans with fraud for failing to do what they claimed they would do with Chrysler.
Schrempp was pushed out by his board in 2005. Cerberus Capital Management, a private equity firm, bought Chrysler from Daimler for $7.4 billion in 2007.
12. Eastman Kodak was founded in 1880 and for much of the 20th Century was the gold standard of the film and camera industries. By 1963, the company was No. 44 on the Fortune 500 with sales of over $1 billion, putting it ahead of industrial giants Alcoa and Dow Chemical. The company thrived for the next decade as its share price rose from $12 to $65.
The company continued to dominate the consumer and enterprise photo world until 1984, when Fuji began selling film similar to Kodak’s for 20% less than Kodak’s price. Kay R. Whitmore, the company’s CEO from 1990 to 1993, assumed that its brand would win out over price, and continued to charge premium rates for its film. He was wrong.
Even though Kodak scientists invented the first digital camera and first mega-pixel camera, Kodak failed to commit the company entirely to the digital world. Kodak assumed that its high-profit film business would continue to dominate the market.
Kodak tried to bridge the period between the decline of film and digital products with instant cameras, launched in 1987. This helped the company remain profitable in the film business for another 15 years. Whitmore, it could be argued, had a window from the early 1990s until later in the decade to use the company’s brand and R&D prowess to retain the firm’s lead in the imaging business.
Kodak failed to adapt to the new reality, or rather it adapted in a half-hearted way. In the 1990s, it came out with Photo CD, a quasi-digital quasi-analog bridge product with some impressive technology. The company was in the business of selling digital cameras. With each passing year, the core audience for Kodak’s film, film paper, and the cameras that use them disappeared.
13. Pan Am was the US flagship carrier overseas from the beginning of the Great Depression until the early 1970s. From early on in its history, it flew to Europe, Asia, and Latin America. The firm pioneered the use of clipper aircraft and was an early adopter of commercial jets and jumbo jets, which helped insure the success of the United States aerospace industry.
Most of the company’s growth came during the leadership of Juan Trippe, still considered by many to be the greatest airline CEO in history. Trippe not only expanded the company. He built, by many measures, the most experienced and professional flight crews and ground crews in the industry. Pan Am also built the predecessor of the modern airline reservation system in a partnership with IBM.
William Seawell was the CEO of Pan Am in 1980 when the company bought National Airlines in a bidding war against Frank Lorenzo, a corporate raider. Seawell believed that Pan Am needed a large domestic airline to feed its international routes. But the price for National was $400 million. And that added to the debt the company had already taken on to buy its fleet of Boeing 747s, which it had purchased to increase the capacity of its international fleet. Pan Am tried to salvage its balance sheet by selling the Pan Am building in New York. In September 1981 Seawell was replaced by C. Edward Acker who came too late to save the airline. After struggling with its debt, the company declared bankruptcy less than a decade later.
14. Moody’s CEO, Raymond W. McDaniel Jr., has been the head of the company since 2005. Since that time, Moody’s, which was founded in 1900, has gone from being one of the two most respected credit rating agencies in the world, along with S&P, to being the target of public criticism and law suits by Connecticut State and investigations by Congress of its role in the credit crisis.
The Washington Post recently wrote of the investigations “A probe of the credit-rating industry by the Senate Permanent Subcommittee on Investigations found that firms used outdated models, were influenced by their clients and waited too long to downgrade investments as the collapse in the housing market intensified in the year before the financial crisis.”
More recently The Financial Crisis Inquiry Commission issued a subpoena to Moody’s complaining that the credit rating agency had not complied with its request for documents and e-mails to aid in its investigation. Most recently California subpoenaed Moody’s Investors Service Inc., asking for documents in the state’s investigation of the company’s evaluations of asset-backed securities. There is almost no case to be made that the trouble for Moody’s will not get worse and that its reputation has been effectively ruined. Over the last five years, the DJIA is up slightly and Moody’s is off by over 40%.
During McDaniel’s watch, Moody’s century-long sterling reputation for integrity vanished. It is almost certain that the value of its brand can never be regained.
15. Eckard Pfeiffer ruined Compaq, one of the original PC companies, and for years one of the most successful.Compaq was started in 1982 with a $3,000 investment from its three founders. That same year, the company released the first commercially available portable computer, the father of the laptop. In 1984, the company released its first desktop, arguably making it the PC company with the broadest product line of any in the world. In 1989, Compaq moved into the low-end server market and pushed IBM and Packard Bell out.By the late 1990s Compaq would have been better off focusing on the PC and server markets. Unfortunately, Eckard Pfeiffer, the company’s CEO from 1991 to 1998, had plans to greatly expand the company’s businesses and sales. In 1997, he bought Tandem, a manufacturer of high-end servers. He then purchased DEC, the leading mid-frame computer company, in 1998. In both Tandem and DEC, Pfeiffer strayed from Compaq’s core business, buying high-end brands that were not only expensive but were in the process of becoming obsolete. Notably, Pfeiffer was unaware of the value of one of DEC’s assets, Altavista, the original search engine and the predecessor to Google and Yahoo!
As Pfeiffer took that company up-market, competitors like Dell and Gateway stole most of the lower end of the market—the area Compaq had once dominated. After seven years as CEO, Pfieffer was sacked by his board of directors. It was too late for the company to recover critical market share in the fastest growing parts of the PC market. Compaq was sold to HP in 2002.
BFAR,I was lucky to get filled @ .80 while I was away on a gtc order. I hope China is treating you well Will, I've heard good things about you and your top notch DD!
~HippyChick~
SGZH looking much better, looking more and more like the shareholders will be happy.
8K filed CFO resigns. That is very bad considering the horrible last Q with a weak explanation and the deadly silence. It certainly smells like trouble coming.
Is LPIH a scam? I see the CFO has misled investors more than once.
I think i'm pregnant Mikey, we need to talk!
That BB guy is such a cheater on the song games, I'm gunna fix him one day!
I hear you asking but I'm not going to tell!
I'm in your paltalk rm everyday sugar pie!
Are you and that Norm guy up to no good again? Bad boys!
Mikey you big stud! Guess who?
Hippy~chick
You better not tell them our little secret or no more inside scoops from China for you. You still owe me a foot massage too!
Hippy~chick
Burp you are amazing. I have been playing your picks and quietly making a killing. I don't even check what these companies do anymore, one question? Do you need a girl friend?
Hippy~Chick
Classic! Nothing like super duper top secret info from reliable sources. btw I heard XODG Is going to put out news, I really don't know when but I think in about 6 weeks. But don't ask me for a link because I can't say~ so take it or leave it.
Hippy~Chick