Friday, May 12, 2006

Changes at Think

Think (AMEX:THK) announces changes to the board. In actual fact one individual was the COO and secretary-treasurer. The other was the Chairman. The company is involved with interactive advertising and related activities so they are used to stretching reality. The President Scott Mitchell is now also the interim CEO. But he was not previously on the board. But the SVP for corporate communications and investor relations (Xavier Hermosillo) was on the board. The company has recently acquired several new entities but hey everything sounds just fine. Just fine I tell you.

Thursday, May 11, 2006

UnitedHealth Group Sinking Ship

Huge restatement may be required to account for the suspect stock options. What is really needed is a new board. This one is completely incompetent and does not deserve anyone's trust. This may be achieved through a takeover. Lets see now if we shoot the board and several senior executives what is the underlying value of the business after some ridiculous legal costs. Wonder if the directors liability insurance is still in force?

BMO Director Sues Shareholder Activist

Robert Astley has served shareholder activist Robert Verdun with a $1 million defamation suit. Filed in court yesterday the suit makes claim against Mr. Verdun that "the deliberate intention of discrediting Mr. Astley's reputation and holding him up to public scandal, ridicule and contempt." Mr. Verdun was one of the original shareholder activists who would attend annual general meetings and actually ask questions that management did not want to hear. Microphones were cut off and there was at least one instance of actual scuffling at the podium. Many companies loathed his presence. But now that certain matters are before a judge will we see the truth of what actually went on? Or will we just dig two graves and forget about it.

NYSE Shareholders Upset

In an open letter to directors and shareholders of NYSE Group Inc Tom Caldwell is taking the position that former seat holders who now hold shares need to be represented on the board of directors. Specifically he is looking for three seats out of the twelve available. Mr Caldwell and investors were the second largest holders of seats before NYSE went public. Mr. Calwell is also unhappy with the restrictions on how former seat holder shares are restricted over the next three years. This group has profited enormously from a rather savvy play. Are they really trying to take their chips off the table?

Wednesday, May 10, 2006

Boeing's New Blood

Judge Luttig has been appinted as SVP and GC of Boeing (NYSE:BA). The judge is a well connected republican who recently served on the US Court of Appeals 4th circuit. He will be reporting directly to James McNerney Jr. who is both Chairman, President and CEO. The appointment is obviously keyed to Judge Luttig's knowledge of Washington and Big Government. No mention of skills or abilities in corporate governance or related issues.

Walmart Employment Problems

Walmart (NYSE:WMT) has recently made several very high profile appointments to an Employment Practices Advisory Panel, including a former mayor of Detroit and the highest ranking female general and other notable figures. Leaving aside the significant social justice issues the real problem for Walmart is the changing demographic of an aging population base. Walmart has relied on cheap labor. If unemployment stays down and long term demographic trends stay on course, the work force will not settle for Walmart job opportunities. This will have a fundamental impact on Walmarts cost structure. Walmart is unfamiliar with scenario's where they compete to acquire resources.

Tuesday, May 09, 2006

McDonald's McCurrency?

McDonald's (NYSE:MCD)recently reported global sales are on an upsurge. Banging the corporate drum they made reference to "Constant Currencies" when referring to global earnings. In the footnotes they provide "Information in constant currency is calculated by translating current year results at prior year average exchange rates." This is not a real number. Imagine looking at ExxonMobils revenues on the basis of last years oil prices. Who cares. Proper analysis needs to be grounded in reality.

Thomson Corp Annual Report Faux Pas

Thomson (NYSE:TOC)held their annual meeting last week. Attending shareholders pointed out some embarassing bafflegab on page two of the annual report. Clearly a mistake of the inadvertent variety. CEO Richard Harrington when called to task attempted to brazen it out with more verbal nonsense about geographical expansion. The attempt was laughable. I worry about the executive ego that cannot admit to an obvious mistake. Truth and integrity go a long way to creating shareholder value. Treating an individual investor with contempt and disdain worries the hell out of me.

Monday, May 08, 2006

Zale Corporation More Executive Casualties

Zale Corporation (NYSE:ZLC)continues to lose executives. Late Friday well after market close and when most investors had turned off their screens, Zale announced that Mark Lenz Group SVP and CFO had been placed on administrative leave. It appears that Mark Lenz's infraction dates back to a lack of timely disclosure of vendor payment treatments to the outside auditor. The payments had been pushed back from the last two weeks of fiscal year end July 2005 to first week of Aug 2005. Zale Corporation has experienced a wave of executives leaving for various reasons. The SEC is also investigating accounting practices. But strangely the board seems quiet and invulnerable. When so much is rotten it really is the boards fault and responsibility. The stock has not performed well in the past year.

Weekend Follies (May 6-7, 2006)

Weekend follies attempts to identify companies issuing substantive press releases at odd-ball hours over the weekend. This generally requires additional caveat emptor. This weekend produced nine culprits. Three on Nasdaq Mercer International, MB Financial and United Community Bancorp. Six on NYSE Wachovia WB, Golden West GDW, Pinnacle Entertainment (PNK), Reddy Ice (FRZ), Continental Airlines (CAL) and Zale Corporation (ZLC)