Still More Mergers
at 2005-12-12 18:19:43
The merger deals continue to roll along. Today we learn the Viacom (VIA-B) beat out GE (GE) for DreamWorks. According to the New York Times, the deal was high drama up to the last minute.
Also, ConocoPhillips (COP) is going after Burlington Resources (BR) for $30 billion. Plus, Electronic Arts (ERTS) is going to buy Jamdat Mobile (JMDT).
But despite those h
Stock Options: Old Game, New Tricks
at 2005-12-12 18:19:43
Business Week looks at the game of stock options accounting. One of the variables of the Black-Scholes pricing formula is volatility. Now that companies have to account for employee stock options, their volatility assumptions are magically falling:
Time Warner's lowering of its expected volatility in 2004 cut its options expense by $72 million, a 28% drop, according to New Constructs. Wireless service provider Nextel Partners slashed estimated options expenses from $41 million to $33 million. A Time Warner spokeswoman says the new calculation accurately reflects the more stable range in which the company's stock now trades. Nextel Partners declined to comment.
Another tactic hundreds of companies have used is accelerated vesting. Options traditionally become effective over a period of years after they're granted and are canceled if the recipient leaves the company. By making op
Welcome to the Global Economy
at 2005-12-12 18:19:43
One of Brazil's fastest-growing companies is a home-grown Arabic fast-food chain.
Fed May Alter Statement
at 2005-12-12 18:19:43
Fed watchers beware. Greenspan & Co. may alter the language in tomorrow’s post-meeting statement:
Lehman Brothers Inc. and Banc of America Securities LLC are among 12 of the 22 primary dealers of U.S. government securities that say the central bank will stop saying interest rates provide “accommodation,” meaning they are low enough to spur economic growth. All 22 expect the Fed to lift its key rate to 4.25 percent from 4 percent.
Removing that one word from the Fed statement explaining policy decisions may fuel the debate between economists and investors over whether the central bank is almost finished raising rates, setting the stage for a rally.
“The message they want to convey is that they are still concerned about inflation and that they will continue to raise rates until inflation pressures subside,” said Joseph Abate, a senior economist at Lehma
S&P Lowers GM's Debt Rating...Again
at 2005-12-12 18:19:43
GM's debt was already junk-rated. Now it's even junkier.
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