Thursday, April 01, 2010

Fortress Investment Group -- Deal Junkies Pawn Dividends

Fortress Investment Group (FIG) skips the latest dividend so as to conserve working capital and do more deals. FIG has consistently missed the dividend since Q2 2008.

Two years in the desert on a horse with no name.

The deal junkies who manage FIG would prefer to have cash on hand so that they can generate more deals that create transaction fees for themselves personally rather than reward shareholders.

Tut tut tut.

Disclosure: I hold no positions in Fortress Investment Group

Wednesday, March 31, 2010

RIMM & Palm Why Catch a Falling Knife?

Will Research In Motion (RIMM) take over Palm (PALM) RIMM has a very strong sense of what their market is primarily about. Business. Apple and iPhone has been around long enough and RIMM is still ruling the crackberry nation. RIMM is run by some very strong willed individuals who will want to know why they need to pay a premium for a failing enterprise.

Microsoft did not buy Yahoo because the price was too high. They did make some strategic alliances which Microsoft wanted and Yahoo needed. Look for RIMM to do the same with Palm. Palm’s current market cap is under $900 million before take over premium. Would RIMM pay cash to catch a falling knife called Palm? Why dilute your shares to catch a falling knife called Palm.

Tuesday, March 30, 2010

LDK Management Hiding from Investors

LDK Solar (LDK) announced Q4 numbers for the quarter ending Dec 31, 2009. This is three months ago. Top line for the quarter is approximately $304 million. How difficult is it to close the books? Most companies view 2009 in a distant rear view mirror at this point. LDK raised more equity. LDK also sold a 15% interest in the polysilicon plant to a state owned financial institution.

For a high tech energy solution company they ekked out a 9.9% margin and had an absolute loss on the quarter. Q1 guidance promises no significant top line growth.

They continue to be excited by the solar business and that is pretty well all the comment that they provided about their industry and market prospects. The executives have retreated and are hiding in the bunker. They do not want to speak frankly about any of their issues and prospects. This company has been most difficult to understand. Many market participants have made some very dark statements about the way management runs the joint.

LDK continues to not engage the investor. They could use a basic course in investor relations 101.

Monday, March 29, 2010

AT&T Dividends and Medical Write Off

AT&T (T) Ma Bell announced a $1 Billion write off because of the new health bill. Sounds like a hysterical number. A billion dollar write off does not come out of the wood work. Sure Ma Bell will say we could not say anything until we knew what the legislation was going to say. So therefore disclosure laws are not challenged.

Given that many companies are starting to declare write off’s the SEC is looking at massive passive aggressive behaviour. At what point did the accountant say “Hey we are going to have to write off something” That is the point where Ma Bell and other should have said something.

In the mean time Ma Bell declared her usual dividend. The dividend yield is around 6.4% which will sooth investor fears.

Amazing that both pieces of news came out more or less at the same time