Sometimes it’s worth remembering that the everyday business of Wall Street, even in these bull-market days, is quite mundane. And I’m not talking just about the brokers and traders who are still out there trying to hit that bid for 50,000 shares at $60. I’m also talking about the analysts, like the Salomon Smith Barney analyst who today started coverage of General Motors with a “hold” recommendation. Think of it. Why General Motors right now? And starting it with a hold? It’s like a restaurant critic who’s forced to specialize in different gradations of bland. Or a movie reviewer spending his time explaining why Music of the Heart got two stars instead of one and a half. Or … but I prattle on.
Anyway, the big news of the week was, of course, the Microsoft decision, except that the big news was how little news the decision made on Wall Street, at least in terms of moving the market as a whole or even the company’s stock, which now stands only a point or so below where it was when Judge Jackson handed down his ruling. Actually, the decision did help Microsoft’s competitors, including especially the Linux companies. Apparently something can simultaneously be unimportant to a company and incredibly important to the companies it’s competing against. It’s the inscrutable wisdom of the market. And so, on to Cocktail Chat.
1. “In a truly phenomenal decision, the Delaware Chancery Court ordered three top executives at Computer Associates to give back 9.5 million shares of stock worth $558 million. And ‘I already spent it on Pokémon cards’ will not be an acceptable defense.”
2. “Priceline.com introduced its newest and most baffling innovation. You can now offer bids on the price of groceries. Airlines make seats available to Priceline because they’re perishable commodities–if no one uses them, they’re a total loss–and hotels do the same with empty rooms. So what items are grocery stores going to make available? Day-old-bread, batteries that are about to expire, and mystery meat? Well. This is going to be big. Really big.”
3. “The Sci-Fi Channel announced that it will begin broadcasting a weekday talk show with medium John Edward, who is ‘known for his uncanny ability to see dead people.’ (Just like the kid in The Sixth Sense.) Variety said Sci-Fi was hoping to ‘appeal to viewers who are not necessarily believers of the occult.’ Apparently only if the show featured someone who could actually raise the dead would it appeal to believers in the occult.”
4. “On its opening day of trading, Cobalt Networks saw its shares better than quintuple, rising from $22 to $128. In other words, Cobalt went from being a micro-cap stock to a mid-cap stock in the space of six hours.”
5. “In what was touted as a major vote of confidence by investors in the new direction being taken by Metro-Goldwyn-Mayer, the company raised $721 million in a successful stock rights offering that allowed current shareholders to buy additional shares at a discount. MGM said 99.3 percent of its shareholders exercised their rights. Of course, 89 percent of MGM is owned by Kirk Kerkorian, who exercised all his rights. So what really happened is that Kerkorian gave MGM another $650 million to play with. But I suppose that is a vote of confidence of sorts.”
6. “Citing attorney-client privilege, Sunbeam is refusing to turn over to the SEC a report by Skadden Arps on the company’s financial woes, despite the fact that the SEC has subpoenaed the information. Perhaps by the time it surfaces, there will be 18½ pages missing from it.”
7. “Amazon.com’s stock rose more than 15 percent after it announced Monday that it would be holding a press conference Tuesday to disclose major new initiatives. Then it fell almost the same 15 percent Tuesday after it actually held the press conference. One wonders what would have happened if at the press conference it had only announced that it would be holding another press conference the next day.”
