Thursday, May 25, 2006

Shells Nigerian Fine

Shell (NYSE:RDS.A) is involved in a confusing legal action in Nigeria. Shell Petroleum Development Company, SPDC, has been ordered to pay US$1.5 billion into the Central Bank of Nigeria, in favor of the Ijaw Aborigenes of Bayelsa State. The underlying legal action is subject to appeal. Nigerian power brokers want it paid to the central bank as a neutral entity until everything is sorted out. I suspect there are no winners here. SPDC probably did environmental wrong to the Ijaw's. Nigeria if they ever get the cash will not hand it over to the Ijaw's. Will Nigeria jeopardize valuable oil revenues to collect a measly US$ 1.5 billion? Will Shell jeopardize their Nigerian investment for a measly US$1.5 billion?

Wednesday, May 24, 2006

Molson-Coors Pours a Big One.

Molson Coors (NYSE:TAP) today issued a press release about Peter Coors receiving a lifetime achievement award. At the same time they file an 8K with plans to pay every director another $1,000 for each meeting on top of existing compensation arrangements. Also buried in the same 8K is Peter Coors generous stock option plan. The 8K is the result of a May 18 board meeting which is a week ago. But the fluffy lifetime achievement award press release also comes out today. Quite the beard Peter Coors has developed.

Royal Group Continues Losses

Royal Group (NYSE:RYG) continues to report losses despite marginal increases in revenues. They cite declining profit margins and continuing regulatory problems. Everyone seems to be investigating them and that does take up a lot of management time. Lots of chickens waiting to come home and roost. They cannot blame declining exchange rates as the major operating problem. If that is the case then they are simply no longer viable. Investigations will one day be over but will the whale be able to leave the beach? Probably not!

Tuesday, May 23, 2006

Walmart's Korean Retreat Tactical or Strategic

Walmart (NYSE:WMT)retreats from Korea because they cannot achieve the scale they feel they need. Little information provided as to why they cannot bite off a piece of the market to their liking. Most military planners accept occasional retreat as sound. Cut your losses and fight another day. Why did the Walmart model not work in Korea? Should Walmart draw strategic conclusions about the experience? The sale price was announced (US$882 million) I assume all cash as nothing else was said. Are there any other impacts to earnings and or balance sheet? Sometimes defeats teach more than a long string of victories.

Monday, May 22, 2006

Weekend Follies May 20-12, 2006

Weekend Follies attempts to identify companies that issue substantive press releases at odd-ball hours during the weekend when investors are not looking at their screens. This weeks culprits have four on NYSE; Dillards DDS, Hewlett Packard HPQ, Boston Scientific BST and Wm Wrigley WWY. Three on Nasdaq Core-Mark CORE, Supervision SUPVA, Pressure BioSciences PBIO. Hewlett Packard of course is also on Nasdaq with the same symbol.

Ohio Fires Milberg Weiss

Milberg Weiss was dismissed as lead counsel representing the Ohio Tuition Trust Authority in a class action lawsuit. Attorney General Jim Petro cited the recent criminal indictment of two senior partners. The power house law firm is faced with a major problem. Will clients and other partners want to be involved with senior partners who are facing criminal charges. Even if found innocent the time that will be wasted will be enormous. What will happen to all the other cases. Some defendants cannot believe their luck.