Thursday, December 13, 2007

BlackRock Top Guns Bailing?

BlackRock (BLK) lost Kieth Anderson today. Kieth Anderson was the vice chairman and chief investment officer fixed income. As well he was one of the founders. The reason for his departure was officially "That he will start his own money management firm"

Hey Kieth didn't you already do that and make a bundle. BlackRock has been experiencing some executive suite leakage as various luminaries all seem to be heading for the exit doors. Of course they are all supposed to be starting up another money management firm. Most of these guys are rich enough that their own personal assets would keep many a money management firm busy with just their account.

The sudden desire to start another firm is starting to wear thin. Couldn't you just make tens of millions of dollars where you are now. After all everything is set up. Contacts, lines of credit, office space and furniture; its all there. So what nuance are investors to find credible?

The party is coming to an end and a few guys are going to the coat check a little early. After all they have been reading trends and forecasting supposedly correctly in recent past. Time to wave bye-bye.

Wednesday, December 12, 2007

Amazon Bill Me Later

Amazon (AMZN) recently announced that they will make an investment in Bill Me Later and will shortly also offer the services of Bill Me Later on the Amazon Web Site. For those of you who do not know Bill Me Later is a neat little service that allows consumers with good credit to just provide a few identifying details on themselves and then be granted charge card style credit to facilitate the purchase. Retailer gets their money so you can see why Amazon likes it a lot.

Bill Me Later is a credit card style product that caters to well placed concerns about Internet security and what can happen to you individually if some one hacks into your personal credit card.

At the present they enjoy low costs. They can only function in jurisdictions where the credit bureau structure operates at a very high level of reliability. They have arranged a billion dollar line of credit through/with Citigroup. Therefore they are capital intensive.

Amazon and other retailers are probably tired of the fees they need to pay to the credit card companies and view this as a cost control exercise. Amazons Trojan horse will be the ongoing R&D needed to keep up with the security and technology needed to run this kind of beast. If you do not believe it look at Visa and MasterCard and see what they need to keep their wheels turning properly.

The new kid with a neat slingshot has picked a small sweet spot. It remains to be seen whether Bill Me Later can grow into the long pants of an adult. It also remains to be seen whether Amazon is prepared to pay for a good pair of pants.

Tuesday, December 11, 2007

LDK Needs A Big Investor Day

LDK Solar (LDK) continues with rather controversial news. They have announced a 10-year "Take or Pay" contract to supply multicrystalline wafers and polysilicon to Germany-based Q-Cells AG.

Under the terms of the agreement, LDK Solar will deliver more than 6 giga watts of multicrystalline solar wafers to Q-Cells over a ten-year period commencing in 2009 through 2018. LDK will use polysilicon from its polysilicon plant that is currently under construction, or other sources. Q-Cells shall make prepayments in the order of 10% of the silicon value to assist LDK with financing the expansion required to supply these volumes.

The press release was issued Monday at approximately 03:45 ET through PR Newswire a long established news dissemination service. On Dec 11, in a story posted at approximately 10:00 ET, Reuters reported that Chinese-based solar wafer maker LDK Solar is not planning any refinancing in the short-term. According to Chief Executive Xiaofeng Peng. "We have enough cash for our expansion in the short-term. We are very profitable, we are cash-generating." LDK Solar had earned "several hundreds of millions of dollars" in pre-payments as a result of a deal with Germany's Q-Cells AG, announced on Monday, he added.

In reading the Monday press release I cannot find any mention of financial details. Yet the stock is moving upward so someone knows something or thinks they know something. The stock has popped approximately 20% since the announcement. LDK needs to have the financial ramifications fully disclosed so as to ensure complete financial transparency.

Asensio has weighted in issuing a release in the morning of Dec 11. They point out that “LDK has no polysilicon production capacity. LDK has never produced polysilicon or any other chemical product. Polysilicon has been produced in commercial quantities since the 1950s.”

Asensio went on to state “It is also difficult to understand what Q-Cells means by "current polysilicon plant." LDK recently announced that it had finished clearing the ground for its new plant, but so far no plant has been built. This minor detail does not prevent LDK from issuing wild predictions about future production capacities.

LDK’s web site IR page has links which do not lead you to the correct page which only increases frustration and causes confusion. The link for SEC filings goes nowhere. But the picture of the American flag draped over a structure that looks like the NYSE building on Wall Street looks nice. LDK you need one big investor day where you lay out the whole story all over again from a to z. Invite analysts, investors and the media.

By the way where is the independent report that was promised regarding Mr Charley Situ allegations about improper inventory valuations. It was promised in early Dec. It is now early Dec.

Monday, December 10, 2007

Reuters on International Herald Tribune; Noise, Content or Just Market Share

Reuters Group (RTRSY) soon to be acquired by Thomson Corp (TOC) has displaced Bloomberg LP and will now be providing content to the International Herald Tribune which is also now owned by New York Times (NYT). The deal is interesting because the revenue model calls for Reuters to participate in advertising revenues that the business news section of IHP generates. Before Bloomberg just received a syndication fee and cashed their cheques.

Reuters and IHP/NYT all compete with Dow Jones/WSJ and News Corp (NWS) so there is a certain alignment of battle order as troops are moved around the competitive landscape. What is interesting is that Bloomberg has allowed itself to be replaced. Did Bloomberg not believe in IHP's ability to generate ad revenues? Is Bloomberg news that different than Reuters news, in the IHP context? We are talking headlines and the first few paragraphs of the real story.

This is a fairly nice place for NYT to experiment with the model and develop a savvy if there is one to be developed. Does NYT not have their own business news division. I know I know not all news gathering services are the same and there is a certain amount of under coverage in one area that another service may be well positioned to cover off.

I am not convinced that the Reuters contribution will have a measurable impact on IHP. There was some smoke obscured commentary about still relying on their own staff and writing the same amount of stories.

But its all about "Follow the Money" and no information was released about the money. So how does the business reader follow the story?