Professor Elam

Tuesday August 10, 2010

We are studying stock option costing in Intermed II Accounting. Now we learn that the guys at KKR have apparently offered so many option on their stock that it cut earnings 92% and KKR has cancelled another stock offering, given poor market condition, well duh, which they helped create, read on. 

KKR Drops Plans for Stock Offering
By PETER LATTMAN
AUGUST 9, 2010, 5:38 P.M. ET.

KKR & Co. said it dropped plans to raise $500 million in a stock offering, a setback for the firm as it begins life as a company publicly traded on the New York Stock Exchange.

In reporting earnings for the first time as an NYSE-listed firm, KKR said late Monday that it earned $29.9 million, compared with $365.8 million during the same period of 2009. That 92% drop, in part, reflectsthe cost of the one-time issuance of equity awards relating to its stock issuance. (The shareholders should revolt and throw out management – Jesse)

KKR's core private-equity business performed well. Holdings on its balance sheet, which include Texas utility Energy Future Holdings Inc., were marked 6% higher in the three months through June. The Standard & Poor's 500-stock index dropped 12% for the quarter.

Last month, KKR moved its listing to the NYSE from the Euronext exchange to provide its stock with more liquidity and a broader investor base. In May, it announced that as part of its U.S. listing it would raise $500 million to fund the firm's growth and potential acquisitions. KKR has since squelched the offering…