Charge!
Posted by Eddy Elfenbein on July 12th, 2007 at 7:28 pm

I defended the bull market on October 25 when the S&P 500 was at 1382. I did it again on February 22 when the S&P was at 1456.
Today, the S&P 500 closed at 1547.70.
Here’s how the entire S&P 500 did today.

Nice Turnaround
Posted by Eddy Elfenbein on July 12th, 2007 at 2:24 pm

Just 28 hours ago, the S&P 500 looked like it was going to fall below 1,500, and now we’re close to a new all-time high. The previous high was 1539.18 reached on June 4.

It’s Over: Biomet Shareholders Accept $46 Offer
Posted by Eddy Elfenbein on July 12th, 2007 at 12:50 pm

They needed 75% and they got 83%.

Biomet Inc. shareholders accepted a $11.4 billion buyout offer from a private equity consortium attempting to acquire the medical device maker.
The consortium, LVB Acquisition LLC, announced Thursday that nearly 83 percent of Biomet’s shares were tendered. The company needed at least 75 percent for the deal to go forward. The offer expired midnight Wednesday.
In June, LVB Acquisition offered $46 a share to buy the Warsaw, Ind.-based company, which closed the day prior at $45.48 per share. Biomet shares traded up 13 cents midday Wednesday to $45.92.
The private equity group includes Biomet founder and former chief executive Dane A. Miller and affiliates of the Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co. and TPG.
Biomet spokesman Greg Sasso said the deal would close by the end of the calendar year, but he declined to give a more specific time frame.

John Mackey Channels Patrick Byrne
Posted by Eddy Elfenbein on July 12th, 2007 at 11:14 am

From DealBook:

John P. Mackey, the co-founder of Whole Foods Market, has never lacked for personality. As it turns out, that was only the half of it. For seven years, Mr. Mackey had an online alter ego.
Using the pseudonym Rahodeb — a variation of Deborah, his wife’s name — Mr. Mackey typed out more than 1,100 entries on Yahoo Finance’s bulletin board over a seven-year period, championing his company’s stock and occasionally blasting a rival, Wild Oats Markets, that his company later went on to buy. The story was first disclosed on The Wall Street Journal’s Web site last night.
Responding to a posting on March 28, 2006, Rahodeb wrote: “OATS has lost their way and no longer has a sense of mission or even a well-thought-out theory of the business. They lack a viable business model that they can replicate. They are floundering around hoping to find a viable strategy that may stop their erosion. Problem is that they lack the time and the capital now.”
Mr. Mackey apparently did not fool participants on the forum, who occasionally tried to out Rahodeb. In one instance, he responded by saying that he was in fact George W. Bush.
The attacks were made on Yahoo! financial forums, under the name “Rahodeb,” and included such postings as “Would Whole Foods buy OATS? Almost surely not at current prices…What would they gain? OATS locations are too small.” Rahodeb also said Wild Oats’ management “clearly doesn’t know what it is doing.” The company, he wrote, “has no value and no future.”
In February, Whole Foods announced it would buy Wild Oats for about $565 million, or $18.50 per share.
Mr. Mackey declined an interview request from The Wall Street Journal but did post on the company Website saying that the F.T.C. was quoting Rahodeb “to embarrass both me and Whole Foods.” He also said: “I posted on Yahoo! under a pseudonym because I had fun doing it. Many people post on bulletin boards using pseudonyms…I never intended any of those postings to be identified with me.”
Mr. Mackey’s post continued: “The views articulated by rahodeb sometimes represent what I actually believed and sometimes they didn’t. Sometimes I simply played ‘devil’s advocate’ for the sheer fun of arguing. Anyone who knows me realizes that I frequently do this in person, too.”

Fox Business Network To Launch October 15
Posted by Eddy Elfenbein on July 12th, 2007 at 9:33 am

From Variety via DealBreaker:

Fox News Channel’s long-planned business net spinoff has an official name and a launch date.
New web will be called Fox Business Network, or FBN, and launch Oct. 15, announced Neil Cavuto, managing editor of business news.
News Corp. is proceeding with plans for the business network, an extension of its successful and profitable Fox News franchise, without regard to the status of chairman Rupert Murdoch’s bid for Dow Jones. Sale appears close but could drag out for a few more weeks.
The use of the Wall Street Journal brand in conjunction with the nascent business channel is one of the major synergies touted in News Corp.’s $5 billion bid for Dow Jones.
News Corp. sources indicated that if Murdoch’s bid for Dow Jones is successful, the Fox Business Network branding could change.

China’s Foreign Reserves hit $1.33 trillion
Posted by Eddy Elfenbein on July 11th, 2007 at 12:17 pm

From Reuters:

China’s foreign exchange reserves, the world’s largest, swelled to $1.33 trillion by the end of the first half on the back of massive trade flows that contributed to an acceleration in money supply growth in June.
The central bank said on Wednesday that reserves had grown by $266.3 billion to $1.3326 trillion between January and June, in excess of the $247.3 billion reserves accumulation for the whole of 2006.

Wow!
I mean it. Wow!

The iPhone Surrender
Posted by Eddy Elfenbein on July 11th, 2007 at 12:11 pm

Michelle Leder of Footnoted.org gives up on the iPhone:

Now I’ve been an Apple customer since 1998 when I bought my first Imac and I’ve been generally pretty happy with all of their products. But when a device that’s supposed to make your life easier (or at the very least cooler) starts to take up large chunks of your time, that’s when it’s time to raise the white flag. Which is what I did last night when I returned it. The woman at the Apple store looked as if I had insulted her personally when I said I had had enough with the Iphone and just wanted a full refund (read: no $59.99 restocking fee).

WallStrip on Focus Media
Posted by Eddy Elfenbein on July 11th, 2007 at 12:07 pm

The Fall of REITs
Posted by Eddy Elfenbein on July 11th, 2007 at 9:37 am

I’m not a technical analyst, but that chart isn’t not looking good. The Dow REIT Index (^DJR) is down 17% in the last five months. I don’t think it’s over yet.

“They Don’t Have Enough Skill to Make up for Two and Twenty”
Posted by Eddy Elfenbein on July 10th, 2007 at 3:14 pm

This is from last week’s New Yorker. John Cassidy looks at research done by Harry Kat on the returns of hedge funds. It turns out—shocker—they don’t look so good.

With the help of a graduate student, Helder Palaro, Kat also undertook a larger study, in which he examined more than nineteen hundred funds. The results, which Kat and Palaro posted online as a working paper last year, showed that only eighteen per cent of the funds outperformed their benchmarks, and returns even at the most successful funds tended to decline over time. “Our research has shown that in at least eighty per cent of cases the after-fee alpha for hedge funds is negative,” Kat told me. “They are charging more than they are adding. I’m not saying they don’t have skill; I’m just saying they don’t have enough skill to make up for two and twenty.”
Other economists had been scrutinizing hedge funds closely. In a widely discussed 2005 paper, Burton Malkiel, a Princeton professor, and Atanu Saha, a New York investment analyst, argued that many published estimates of hedge-fund returns are misleading. Malkiel and Saha discovered that funds tend to exaggerate how well they performed in the past, and that those which perform badly often close and disappear from databases, leaving a biased sample. After examining results of now defunct firms, Malkiel and Saha found that between 1996 and 2003 hedge funds made an average return of 9.32 per cent, significantly less than the 13.74-per-cent average return of funds included in the published databases.