Greetings folks and a warm welcome to the 86TH Edition of Friday Finance Weekly. Let’s get into action right away.
Blackberry’s shares were up today on speculation that the company would be taken private. Over the course of the week its shares are up just over 10%) for the week. This isn’t a bad idea as BB is constantly in the public eye, and by trying to satisfy the whims of the market, they are not focused on innovating. BB 10 was approved for use by the Pentagon and this fact didn’t even hit the radar this week. There are rumors that Silverlake (private equity firm) may be the preferred partner. Note however, that nothing official has started. Silver Lake is caught in a bruising $25-billion battle to take Dell Inc. private. Should it succeed in the Dell buyout, one possibility could be for it to collaborate with BlackBerry in mobile computing, where the PC maker has struggled to gain traction, the source said. All things considered, BB’s market value is under $5B (from a peak of $84B) and is ‘affordable’ for most large private equity firms. Do you know what the iPhone said to the Blackberry? “iWork”. Hey I tried. (Source: Globe and Mail)
Hilton Worldwide, the global hotel chain that is currently a portfolio company of The Blackstone Group, is in the process of preparing for an IPO. Its private equity owner has selected four lead underwriters: Bank of America/Merrill Lynch, Goldman Sachs, Deutsche Bank and Morgan Stanley. Parallel to the IPO, Blackstone is also reported to be looking to refinance $13 billion of Hilton’s debt. Hilton’s 2007 leveraged buy-out (LBO) by Blackstone, valued at over $26 billion, was the largest ever in the hospitality industry. Under Blackstone and its current management, Hilton has grown its global capacity from 480,000 rooms in 2007 to 575,000 rooms in 79 countries in 2012. Since the LBO they have also acquired 1,100 new properties and operate over 10 brands. This is going to be one of the biggest hospitality success stories in history and is a prime example of private equity done right. I would make a joke about Paris Hilton but that would be too easy. (Source: PrivCo)
Amazon.com is looking to bring in more than 5,000 workers to staff its growing network of U.S. distribution centers. The No. 1 e-tailer operates more than 40 warehouses across the country, and opened eight in the last year alone as it seeks to improve order fulfillment and reduce delivery time. The jobs include picking, packing and shipping customer orders for Amazon and its expansive network of third-party sellers, and are located in nine states including Arizona, California, Delaware, Indiana, Kentucky, Pennsylvania, South Carolina, Tennessee and Texas. The company is also hiring more than 2,000 full-time, part-time and seasonal customer service posts. There are also rumors about a new Kindle Fire HD to be released and this will further increase Amazon’s competitive position. The e-Book space is heating up with Overstock.com, Apple and Amazon fighting for your dollars. This has had an impact on the share price as it is down 2.24% for the week. Honestly I prefer physical books as I can put them on the shelf and feel guilty for not reading them. When I pay for an e-Book, not reading it seems perfectly normal. (Source: Twice)
A Russian man who decided to write his own small print in a credit card contract has had his changes upheld in court. He’s now suing the country’s leading online bank for more than 24 million rubles ($727,000) in compensation. Disappointed by the terms of the unsolicited offer for a credit card from Tinkoff Credit Systems in 2008, Dmitry Agarkov decided to handwrite his own credits terms. The trick was that Agarkov simply scanned the bank’s document and ‘amended’ the small print with his own terms. He opted for a 0 percent interest rate and no fees, adding that the customer “is not obliged to pay any fees and charges imposed by bank tariffs.” The bank, however, didn’t read ‘the amendments’, as it signed and certified the document, as well as sent the man a credit card. Under the agreement, the bank OK’d to provide unlimited credit, according to Agarkov’s lawyer. “The opened credit line was unlimited. He could afford to buy an island somewhere in Malaysia, and the bank would have to pay for it by law,” the lawyer stated. Wow, that’s all I can say. My only question is why would he want to buy an island in Malaysia? Wouldn’t the South of France be better? (Source: RT)
Have a fantastic weekend and enjoy the sunshine. Please do not hesitate to forward this newsletter. Many thanks,