It was all about mergers this week, as it has been for a few weeks now. Well, it was all about mergers and OPEC production cuts. OK, it was all about mergers and OPEC production cuts and war in Kosovo. And then there was news about Microsoft making a tentative settlement offer. And a big supply deal between IBM and EMC. And then there was the news about the four Canadian telco companies merging.
Ah, I knew we'd get back to mergers again. In any case, the spread of U.S.-style merger mania to Europe--in the form of the LVMH-Gucci battle, the UniCredito bid for BCI, the San Paolo-IMI bid for Banco di Roma, and the ongoing Olivetti-Telecom Italia struggle--really is the most interesting thing that's happened in the past month or so in business, because it seems to represent a cultural change as well as a business one. Undoubtedly, it'll turn out very differently than America's various merger waves--and we're in one now--did. But it might make sense to head to Rome now, before the Louvre acquires the Sistine Chapel. Herewith, the Chatter.
1. "End of last week and first half of this week, tech stocks fell because everyone was concerned that PC sales were slowing and that earnings were going to come up short. Second half of this week, tech stocks exploded, because ... Hell, who knows? Maybe everyone's really pumped up about the Final Four or something."
2. "OPEC announced that it would institute production cutbacks of more than 8 percent, and the price of oil soared in response. Of course, OPEC is still trying to institute a production cutback that it announced a year and a half ago. And the new production cutback will only work if non-OPEC countries go along. But somehow, even I think they mean it this time. Let's call it wishful thinking. Or perhaps wishful non-thinking. Or, since I don't really want higher oil prices, non-wishful non-thinking."
3. "Microsoft reportedly sent a four-page settlement proposal to the Justice Department Monday. Contrary to rumor, the proposal does not include the sentence 'When the Pope divided the world between Spain and Portugal in the 1500s, a little-known proviso gave us control of the global market for operating systems, and we would be loath to offend the Pontiff by giving it up.'"
4. "A truly melancholy headline, about the Yugoslav economy: 'Air Attack Unlikely to Cause More Harm.' You know things aren't going well when being bombed repeatedly isn't going to make a difference."
5. "A new survey shows that 68 percent of corporate chief financial officers believe that their companies' earnings this year will be higher than last by an average of 15 percent. Of course, last year, three-quarters of CFOs thought the same thing, only to watch average earnings actually fall. But, hey, if that ant didn't think he could move that rubber-tree plant, nothing great would ever get done, would it?"
6. "IBM announced that its PC division lost $1 billion last year. Remember, this is the company that invented the basic PC that every other company, besides Apple, now makes. People are now suggesting that Dell Computer will start building PCs for Big Blue. What's next? Burger King will start making fast food for McDonald's?"
7. "Shares in cosmetics maker Revlon have risen 62 percent since takeover speculation started a few days ago. Everyone close to the company says there's no intention to sell, and that there are no buyers nosing around. So we have two options: either there is no deal in the works, in which case the stock should collapse, since the company is floundering; or there is a deal in the works, and some rather breathtaking insider trading is going on. Which makes you wonder. With so many thousands of other companies to invest in, why does anyone own shares in Revlon?"