Countrywide’s Stock Nearly Worthless, says FBR
Originally Published May 5, 2008 1:38 PM
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Although Bill Miller is catching some grief in the media today over his posture and position in Yahoo!, the shares of Countrywide Financial (CFC-NYSE) have done far more damage to his performance, and reputation, over the past year.
FBR is questioning Bank of America’s acquisition price, no doubt Ken Lewis would have do it differently is he had the chance:
Friedman, Billings, Ramsey & Co. analyst Paul Miller said in a research note Bank of America should walk away from its acquisition of Countrywide, or at very least reduce the purchase price, because of continued deterioration in the mortgage market. Miller pegged a new sale price at between $0 and $2 per share. He set his price target for Countrywide at $2.
In January, Bank of America agreed to acquire Countrywide for about $4 billion in an all-stock deal. The deal is supposed to close during the third quarter. Based on Bank of America’s Friday closing price of $39.79, the deal values Countrywide shares at about $7.25. AP
The deal, inked in mid-January, was the first glimmer of hope for a market that was looking for a lifeline after a nasty streak to start the year.
Lewis jumped on a hand grenade, but might not survive this deal if his critics have their way. And Bill Miller’s judgment here looks far worse than any missteps he made in Yahoo!, and his realative performance against his peers will be lousy again given the performance or Countrywide and Yahoo!’s shares today.
Countrywide shares fall as analysts question deal price
AP
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Pedal to the Metal, says Chief Yahoo
The Yahoo! (YHOO-NASDAQ) soap opera has not been too distracting for those of us who tuned it out. And although the stock will revisit the lower end of its recent trading range tomorrow, Jerry Yang does not seem to broken up about it in his most recent blog post. Which is strange, considering he will personally lose millions on paper at 9:30 AM:
So, what’s next? With Microsoft’s withdrawal, we’ll be better able to focus our energy on growing our industry leadership and maximizing value for stockholders. We’ll continue to execute on our plan — making your Internet experience as personal, relevant, open and social as possible, serving advertisers so well they insist on working with us, and opening up Yahoo! in a way that developers dream of. And, we’ll also continue to pursue strategic opportunities that position us for long-term success....Frankly, there’s a lot of nonsense and misinformation in what’s being reported. Just so we are all clear, here’s what happened. The board took its mission very seriously. We clearly indicated to Microsoft that we were open to a transaction but only if it were on terms that fully recognized the value of Yahoo! and was in the best interests of our stockholders. Jerry Yang's Yodel Anecdotal
Of course, shareholders are already up in arms over the situation, and are not waiting for trading to open before launching their offensive. Thankfully for Eric Jackson, whose grassroots activist campaign last year helped Terry Semel find his way back home to Hollywood, Round Two with Yahoo! promises to be more fun than Round One. Jackson already has an Iron in the Fire, and plans to speak loudly while carrying a big hot poker:
Pandit Raises $3 Billion to Bolster Citigroup’s Capital Ratios
Update: They upsized the deal to $4.5 billion Wednesday morning, pricing 178.1 million shares at $25.27.
A win for Meredith Whitney?
Not exactly. Vikram will not be handing her banking business any time soon. Although she was right about Citigroup having to raise more equity capital.
Citigroup Inc., the U.S. bank hit with writedowns on subprime mortgages and bonds, is selling $3 billion of stock two weeks after reporting its second straight quarterly loss.
The shares are being sold in a public offering, New York- based Citigroup said today in a statement. Citigroup already has raised more than $30 billion of capital since December. A weakening U.S. economy and rising consumer delinquencies forced Chief Executive Officer Vikram Pandit to rescind assurances earlier this year that the bank didn't need to raise more funds.
``This was extremely disappointing,'' William Fitzpatrick, an equity analyst at Optique Capital Management in Racine, Wisconsin, said in a Bloomberg Television interview. ``We were hoping they wouldn't have to go the equity markets like this.'' Bloomberg
The move will raise Citi's Tier 1 capital ratio to 8.5% from 7.7% at the end of the first quarter.
The New, New Buffett: Aditya Mittal
One year ago dealmakers could do no wrong. Private Equity kingpins and M&A bankers were on top of the world, with Andrew Ross Sorkin and others chronicling their every move. Incessant media fawning often marks an end to the cycle, and this time was no different. But the journalists have also missed the big story.
It ain't about wounded airlines engage in a mating dances, or a few old guys futzing around with candy and auto companies. A 32-year who lives on an airplane and has lorded over 50 cross border deals is the real story:
Aditya Mittal smiles. He is a billionaire’s boy with serious ambition. Charming, articulate and handsome, with round brown eyes that mask a degree of calculation, he is already seen as likely successor to his father Lakshmi at the steel giant they created two years ago by merging their family-controlled firm with European rival Arcelor.
That combined entity, Arcelor Mittal, in which the Mittal family owns a 45% stake, is now the biggest steel group in the world. And Aditya, trained at Wharton Business School and Credit Suisse First Boston in New York, sits as finance director, head of mergers and acquisitions (M&A), and management-board member responsible for flat-steel products, Americas. He is only 32. Times of London
Still, Mittal does not deliver the type of ratings Buffett is capable of. The Mars deal today involving Bershire is just the start; the media will be tripping over themselves to cover all things Buffett this week:
